Amid the recent incident in which the CEO of UnitedHealthcare was recently gunned down in broad daylight, the motive behind this brutal assassination is believed to be linked to the company’s practices of denying insurance claims.
Similar issues have surfaced in South Korea, where insurance claim denials for certain conditions, such as cataracts and developmental delays, have led to growing consumer distrust in the insurance industry.
According to reports, UnitedHealth Group has responded to the controversy by stating that it approves 90% of medical insurance claims and has only a 10% denial rate. This clarification comes amid rumors that the denial rate could be as high as 30%.
Unlike in South Korea, U.S. insurance companies employ a prior authorization process. Patients must inform their insurance companies about their conditions and planned treatments before undergoing procedures. In contrast, South Korean patients typically file claims after treatment, resulting in a significantly lower denial rate of 0-2% among most Korean insurance companies.
However, some South Korean insurance companies report higher denial rates. BNP Paribas Cardif Life Insurance and Hana Life Insurance stand out with 17.8% and 5.2% denial rates, respectively. In the first half of this year, Hana Life Insurance’s denial rate for whole life insurance reached 22%. BNP Paribas Cardif Life Insurance reported a 50% denial rate for savings insurance, though it’s not health insurance.
Insurance coverage disputes have intensified recently, particularly regarding cataracts and treatments for children with developmental delays.
The cataract incident stemmed from excessive medical care, but it’s the patients who are paying for it. Since 2021, some ophthalmologists and brokers have been accused of recommending unnecessary and expensive procedures, such as multifocal lens implants, to patients who didn’t even need them, claiming health insurance would cover the costs.
This led to numerous disputes, in which insurance companies refused to pay insurance payments to patients who underwent surgery based on precedents regarding excessive treatment and inpatient care. As of last year, 1,800 consumers participated in joint lawsuits for cataract insurance claims through the Civil Union for Finding Consumer Rights in Insurance Claims.
The issue of denied claims for children with developmental delays remains unresolved and was discussed in this year’s National Assembly audit of South Korea. The amounts of denied claims have steadily risen from approximately $15,483 in 2021 to $47,284 in 2022 and $58,430 in 2023.
Reports suggest that several former heads of the Financial Supervisory Service have received threats related to insurance disputes, including intimidating package deliveries. An insurance company representative noted, “While denial rates in South Korea are relatively low compared to other countries, it’s very common for CEOs’ personal information and photos to be made public.”
Meanwhile, at the scene where the CEO of the U.S. insurance company was murdered, shell casings were found inscribed with words like “depose,” “deny,” and “delay” – terms associated with insurance claim rejections. These words are used as an anti-insurance phrase in online forums, reflecting the public’s growing frustration with the insurance industry.
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