The Insurance Float: How Financial Strategy Delays Care and Costs Lives

When I first learned about the concept of the “float,” it was in personal finance, not healthcare. Back when people still wrote checks (I know, I'm old), some people would occasionally write a check for more than they had in their account, knowing it wouldn’t clear for a day or two. Maybe payday was coming, or they needed just a little extra time to make the deposit. It was risky, but it gave a brief window of breathing room.

Insurance companies do something similar but on a far larger and more calculated scale. Instead of scrambling to cover their debts, they deliberately hold onto claim payments as long as possible, leveraging the delay to earn interest on billions of dollars in collected premiums. Otherwise known as the "float." It’s a lucrative strategy that generates hundreds of millions in potential earnings each month.

But what’s a strategic financial tool for insurers is often a matter of life and death for patients. This systemic practice, intentional or not, creates delays that have devastating consequences for the people the healthcare system is supposed to serve.

The Real Cost of Delays: Patients Who Suffer

Behind every delayed claim is a patient waiting for care. In some cases, those delays cost them their lives. Take the tragic story of Nataline Sarkisyan, a 17-year-old leukemia patient. Her doctors recommended a liver transplant, but her insurance company initially denied the request, deeming it “experimental.” After intense public pressure, the insurer reversed its decision, but the approval came mere hours before Nataline passed away.

This wasn’t just a bureaucratic misstep. Any way you slice this, the system allowed financial gain to overshadow patient care. While Nataline’s story is one of the most publicized examples, it’s far from unique. Every day, patients face similar delays for approvals, especially for time-sensitive or life-saving treatments. Whether caused by inefficiency or profit-driven motives, these delays create barriers that can worsen conditions, prolong suffering, and sometimes end lives.

Patients Rationing Care: The Case of Diabetes

In my years working in the diabetes space, I saw firsthand how difficult it can be for patients to access the care and medication they need. Managing diabetes is expensive. Insulin prices in the U.S. are among the highest in the world, forcing many patients to make impossible choices: skip doses, ration their insulin, or go without entirely. These decisions aren’t made lightly—rationing insulin can lead to severe complications, including nerve damage, organ failure, and even death.

Now imagine adding insurance delays to this already dire situation. A patient who’s already stretched thin financially submits a claim for their insulin, only to face weeks-long delays in processing.

For someone already burdened by high premiums, out-of-pocket costs, and the emotional toll of managing a chronic disease, delays in insurance coverage can be crushing, both financially and physically. Insulin isn’t a luxury. It’s a life-sustaining medication, and yet the float often turns it into a game of financial endurance where patients lose every time.

The Insurer’s Perspective: Why the Float Exists

In order to be objective, we need to understand the other side of this issue. Insurers argue that delaying reimbursement serves a necessary purpose. They claim delays allow for due diligence, verifying claims, preventing fraud, and ensuring treatments are medically necessary. Given the sheer volume of claims processed daily, these are valid concerns. No one wants a system where funds are wasted or misused.

However, this defense falls short when it comes to time-sensitive or critical care. In today’s world, technology like AI and real-time data processing could significantly reduce delays in approvals. Instead, the delay allows the insurer to hold on to patients' premiums, generating more income while the patient may be in dire straights.

Patients aren’t asking for instant approvals in all cases. They need a system that balances financial oversight with timeliness, ensuring that delays don’t become barriers to care.

A Call for Change: Reimagining the System

The float isn’t inherently evil. It’s a byproduct of a system designed to balance financial sustainability with patient care. But somewhere along the way, the balance tipped too far.

Tragic stories like Nataline Sarkisyan’s and the countless others of patients rationing care should serve as a wake-up call. We have the tools to change this system. What if insurers were incentivized not by how much they could earn on the float but by how quickly they could approve claims and deliver care? What if we used advanced technologies to streamline processes, ensuring that no patient is forced to wait unnecessarily?

These aren’t impossible ideas. They’re achievable goals. And they’re goals worth pursuing because every delay in care isn’t just a financial decision. It’s a decision that impacts real lives.

Conclusion

It’s time for insurers, healthcare leaders, and policymakers to rethink their priorities and build a system that truly puts patients first. Whether caused by inefficiency or financial strategy, delays in care have real-world consequences that we can no longer ignore.

If you’ve experienced delays in care or seen the float at work, I’d love to hear your story. Together, we can start a conversation about the changes that need to happen—and the lives those changes could save.