> But it has nothing to do with the claim that "denying claims increases profits", which is simply not true.
Well, it's kind of transparently true. If the worst-case scenario is that you need to return some premiums, then you should always deny enough claims that you're always returning some amount money, as you should always hit your profit cap. The second reason issue is that an approved claim has Opex costs. The platonic ideal of an insurance company in the current system is one that collects (# of patients * annual premium), and approves 0 claims. If you don't approve any claims, you'll have the lowest possible Opex costs, because there's no processing to do, no fraud to check for, no follow up visits that might take you below the profit cap, etc.
But it has nothing to do with the claim that "denying claims increases profits", which is simply not true.