The Great Insurance Swindle: From Noble Idea to Global Fraud

 

The Great Insurance Swindle: From Noble Idea to Global Fraud

Abstract

Insurance was once meant to protect societies from financial ruin. Today, it has become a legalized racket. From inflated healthcare bills to disaster claims padded for profit, insurers exploit loopholes they wrote themselves with politicians cheering them on. Unless policymakers address this conflict of interest, the industry will continue to exploit citizens under the guise of protection.

Insurance was supposed to be one of society’s noblest ideas. A simple principle: pool resources so that no individual is ruined by illness, disaster, or misfortune. A collective cushion against life’s blows.

But what began as a social good has been hijacked by corporations and corrupted by politicians. Today, the insurance industry is no longer about protection; it is about profit. And it has become one of the world’s biggest legalized frauds.

How Healthcare Was Captured

Healthcare insurance exposes the rot most clearly. Over decades, insurers bought political influence to twist laws, dismantle consumer protections, and even write their own privacy rules. With the help of creative billing and coding, they inflated costs while slashing services.

The most outrageous conflict of interest? Insurers don’t just cover services anymore; they sell them. When profits dip, they simply raise prices at their own clinics. What was meant to be a non-profit model now funnels shareholder dividends and executive bonuses, while patients face ballooning bills.

If you dare challenge them, insurers hide behind laws they helped pass. Occasionally, they allow a token case to succeed, paying out settlements to maintain the illusion of accountability. But most people don’t stand a chance, law firms are expensive, and many have been co-opted by the very industry they should be fighting.

The Hidden Math of Coverage

Take kidney stone removal as an example:

• At an insurer-owned clinic: $40,000 bill. Insurance covers 80% ($32,000), and the patient owes $8,000.
• At an independent clinic: The same procedure might cost $15,000. The patient’s out-of-pocket? $6,000.

If the service can be done for $15,000, why does the insurer-owned clinic charge $40,000? The ugly truth is that your $8,000 already covers the actual cost. The insurer still makes money on top because politicians allowed them to sit on both sides of the table.

The Fraud Spreads

The same playbook is being used in home insurance. After natural disasters, insurers push inflated contractor costs. Research shows 70–80% of payouts go to middlemen, not to actual repairs. Why? Because the higher the bill, the higher the profit margin.

Insurance is no longer a safety net. It is a racket.

A Case in Point

Fifteen years ago, my dental insurance capped braces coverage at $2,400. At the insurer’s own clinic, braces cost $5,400 leaving me to pay $3,000 out of pocket. By going to an independent clinic charging $3,800, I reduced my cost to $1,200 and got better service.

Multiply this example across millions of people, and you see the scope of the fraud.

Time to Wake Up

Has the situation improved? Not at all. It has worsened. Politicians funded by insurers themselves keep building red tape to stop communities from creating alternatives like self-insurance pools.

The result is clear: insurance no longer protects. It exploits. What began as a noble shield against misfortune has mutated into an industrialized scam that thrives on secrecy, fear, and political complicity.

Policymakers now face a choice: keep serving the corporations who bankroll them, or finally serve the people who elected them. Until they confront the conflict of interest at the heart of the industry, every new law will be nothing more than another layer of legalized theft.