The jig here is that even though profit is a reasonably slim 4%, the water bottle is being sold at an outrageously high price.
IOW, medical insurance is both expensive and not very profitable because hospitals are charging tremendous sums (and implied that they are overcharging).
That doesn't explain the denials though. My point was that they're apparently doing mass denials and still barely breaking a profit. It suggests the consumer wouldn't be able to afford the insurance that doesn't, if it's not a small piece of the puzzle, otherwise they'd pay more for that.
IOW, medical insurance is both expensive and not very profitable because hospitals are charging tremendous sums (and implied that they are overcharging).