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| Gil Bashe |
Six months ago, the murder of Brian Thompson, CEO of the nation’s largest health insurer, sent shockwaves through society. Not simply a senseless tragedy, it became a flashpoint. Many among the public even viewed the crime with bizarre satisfaction, revealing a chilling undercurrent of rage toward insurers.
That reaction, however disturbing, should have forced this industry to confront a painful truth: more and more insurance companies are no longer seen as protectors. They’re too often viewed as profiteers.
We can’t ignore what this reaction says about the lack of public trust in the health system. This didn’t happen overnight. Anger this deep was built over years of denials, delays, surprise bills and bureaucratic runarounds. Nearly half of Americans carry medical debt, and a 2024 Gallup poll found that only 28 percent rate their coverage as good or excellent; just 19 percent are satisfied with health costs. In this climate, every misstep by insurers feels personal.
The Illusion of Cost Savings
One such misstep is happening right now—quietly but broadly. Insurance companies increasingly tout "cost containment" efforts for out-of-network care, suggesting they negotiate with providers on the patient’s behalf. But in many cases, the savings claimed are nothing more than accounting illusions, which seem designed to baffle customers.
Here’s how the game works: A provider charges $275. The insurer “reduces” it to $45, not because that’s what the provider agreed to, but because that’s what the insurer says it should cost. They present the $230 difference as a “savings,” then pay their portion on that reduced amount.
Who pays the rest? That falls on the patient. Who ends up holding the bag? Again, the patient.
These aren’t negotiated discounts. They’re entirely hypothetical projected savings, often unaccepted by providers. While providers must comply with legal mandates to give or receive good-faith cost estimates, insurers are not obligated to verify or disclose the shaky ground on which these so-called “reductions” stand. The result is bad faith billing in a system that demands good faith from patients to cover the balance.
This practice exploits a critical information imbalance between patients and insurers. Most patients assume that if their insurer lists an amount as “allowed,” it's because the provider agreed to it, but that’s not always true. The “reduction” is a unilateral calculation made by the insurer, untethered to any real agreement and used to justify smaller payouts. It’s akin to a department store marking an item down from a made-up price to create the illusion of a sale.
Consider a patient receiving out-of-network surgery costing $5,000. The insurer labels the "reasonable" charge as $1,800 based on its internal metrics and offers to pay 70 percent of that—or $1,260. The provider never agreed to this amount. The patient is left responsible for $3,740, despite receiving no warning about the insurer’s arbitrary calculation or lack of pre-negotiation. Ouch!
A System Designed to Shift the Burden
Patients are left in the lurch when these cost estimates fall apart, as they often do. Providers have no obligation to accept insurer-set rates if they’re out of network and many don’t; they’re stuck unless patients contest the bill, seek arbitration under the No Surprises Act, or beg for a reduction. The insurer, meanwhile, records a phantom “savings” and shifts responsibility. Profit mission accomplished.
Even worse, recent lawsuits allege that some insurers and repricing firms may be manipulating these processes to minimize payouts while maximizing the appearance of value. If proven, this would confirm what many patients already feel: that the system is designed to confuse and extract, not support and serve.
Though the No Surprises Act was designed to shield patients from unexpected bills, its protections are limited. The law covers emergency services and certain scheduled care, but insurers may still find workarounds—claiming procedures fall outside the law’s purview or referring disputes to internal arbitration processes that favor insurer data and pricing models. Without clear enforcement, these safeguards lose their power, and consumers remain vulnerable to post-care sticker shock.
Meanwhile, insurers often emphasize that these strategies reduce premiums and maintain affordability. But those gains come at the price of their subscribers' financial trauma. What’s marketed as fiscal responsibility too often amounts to quiet denial of coverage through the backdoor.
Litigation is now probing how some insurers coordinate with third-party repricing firms to suppress out-of-network reimbursement rates. These firms analyze bills and suggest lower benchmarks, but critics argue they act as de facto gatekeepers, introducing opacity and favoring the payer’s financial interests. If these relationships are found to sidestep fair reimbursement practices or violate fiduciary obligations, regulators may be compelled to act.
The Beltway is watching. As public frustration grows, so does the likelihood of congressional hearings, state attorneys general probes and class-action lawsuits. Patients’ frustrations—public outcry—may prove to be the seeds of laws that guide corporate actions. That is how the system works—public outcry is the tipping point for policy and law.
Insurers’ Trust on Life Support
This practice—billing based on wishful thinking—is not an isolated flaw. It is a pattern driving a broader credibility collapse. Patients are bombarded with administrative mazes: step therapy, prior authorization, shifting formularies, ever-narrower networks. Add opaque billing practices to the mix, and it’s no wonder consumer confidence is imploding.
When people lose faith in their insurers, they don’t just turn to another plan—they begin to beat the drums for a new system. The same Gallup data that showed dissatisfaction also revealed growing support for government-backed coverage. This isn’t just a policy debate—it’s the genesis of a movement. That may not be to anyone’s best long-term interest.
Rebuilding the Contract
The insurance industry must recognize what the tragic murder of Brian Thompson symbolized to their many frustrated customers: the demise of trust. The act itself was totally unjustifiable, but the underlying resentment it revealed cannot be ignored. The tragedy raised hard questions about the depth of patient frustration with a system they increasingly see as indifferent to their needs.
Communicators within these organizations must rise as the conscience of their companies—guiding leadership to see that credibility and compassion are not at odds with profitability. Serving both corporate and consumer customers requires aligning profit with purpose. This is how trust is earned—and how it’s kept.
Transparency can no longer be optional. Insurers must stop presenting imaginary discounts and must now match the standards imposed on providers. If an insurer expects patients to trust the process, it must act with the integrity it demands of others.
Patients aren’t columns in a spreadsheet. They’re not liabilities. They are people, and many of them are in pain as they fumble through the maze of reimbursement. When insurers try to mollify them with savings that don’t exist, this erodes their moral credibility and undermines their customers’ financial stability.
Insurers are at a crossroads. They can continue with clever accounting and hopeful messaging—or they can lead with accountability, rebuild trust and put patients at the center of their business models. Because if they don’t, the next chapter in this crisis won’t be written by actuaries. It will be written by a public that has had enough and pressures Congress to engage.
There’s still time for the health insurance industry to step forward as a partner in change. Regaining trust will require more than glossy brochures or obfuscatory explanations of benefits letters. It demands operational transparency, humility and a commitment to fairness, marked by clearer billing practices, real-time provider agreement data, and consumer-accessible cost calculators. Health plans must stop over-relying on algorithms and accounting gymnastics—and start listening to their paying customers.
In a moment when affordability and access are top national concerns, the industry's next moves matter. Either health insurers will lead a new era of accountability, or they will be summoned to answer for their silence before the court of public opinion and in the halls of Congress.
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Gil Bashe is Managing Partner and Chair, Global Health and Purpose, at FINN Partners.
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