Opinions

Federal Support Enables Health Insurers to Conceal Growing Denial Rates



The health insurance sector’s troubling reality is that it’s no longer providing true insurance; instead, it’s offering a gamble.

The likelihood of having your health insurance claim rejected today is about ten times higher than it was ten years ago.

In the past, insurance companies rarely denied claims.

According to the American Medical Association, in 2013, UnitedHealthcare rejected 1.1% of claims, Humana 1.9%, and Aetna 1.5%.

Fast forward to 2022, when major insurers were refusing to pay, on average, 15% of claims, based on a national survey of hospitals and health-care providers conducted by Premier, an insurance consultant.

This pattern continues to escalate; some insurers now deny nearly half of all claims, according to research from the Kaiser Family Foundation.

However, there’s no way to know which companies are the worst offenders, turning the process of selecting a plan into a risky venture.

If you find yourself seriously ill and require expensive treatment, a claim denial could plunge you into financial ruin.

The Affordable Care Act of 2010 mandates that the Department of Health and Human Services track claims denials and share that data with the public.

Yet, government officials, influenced by the insurance industry, fail to follow through.

Consumers are left in the lurch.

The government is facilitating an environment where claim denials turn into substantial profits for insurers.

The recent assassination of UnitedHealthcare CEO Brian Thompson has sparked significant backlash against insurers.

Alleged murderer Luigi Mangione expressed his contempt for the “corruption and greed” plaguing the industry in his manifesto.

There is absolutely no justification for murder, regardless of industry misconduct.

It’s high time the denial rates of these companies are disclosed.

You cannot claim to be insured if your insurer can dismiss valid claims without consequence.

This reality is reflected in information obtained by Kaiser researchers about plans available on the Affordable Care Act exchanges.

On average, ACA plans deny 17% of claims.

However, some insurers, including Meridian Health Plan of Michigan, United Healthcare of Arizona, and Optimum Choice in Virginia, reject 30% or more.

Celtic Insurance Company in Florida denied 42% of claims in 2021.

This hardly qualifies as true insurance.

This issue isn’t limited to ACA plans.

According to a March 2024 survey by Premier, insurers overall rejected 15.7% of Medicare Advantage claims, 15.1% of Medicaid managed care claims, and 13.9% of claims from non-government plans.

This shocking denial rate should be the first piece of information any consumer receives when selecting a plan, and plan ratings ought to incorporate denial rates.

The fact that this information is hidden is scandalous.

Insurers attribute less than 2% of denials to a lack of medical necessity, 8% to missing prior authorization, and about 13.5% to a service not being covered under the plan.

However, the most significant category for denials — “other,” which constitutes 76% of denials — remains vague and unexplained. It’s a complete mystery.

Patients seldom appeal their denials — only 0.2% of the time, according to Kaiser.

Appealing requires persuading your doctor and their staff to dedicate hours to complete forms and make countless phone calls to negotiate with an insurance representative.

Few doctors are willing to undertake this burden.

Nevertheless, appealing can yield results. In the ACA plans, Kaiser reports that 41% of denied claims are overturned — indicating that a substantial amount of necessary care covered by these plans is being unjustly denied.

Employers and employees alike should have access to information regarding how often insurers deny claims, as should Medicare Advantage plan enrollees.

Unfortunately, federal regulators have given in to industry pressure and refuse to gather this data.

State regulators are equally unhelpful.

While state insurance commissioners collect denial information, they rarely disclose it, with Connecticut and Vermont being the notable exceptions, according to a ProPublica investigation.

New York does make public the number of complaints against insurers but does not release the actual denial rates — information that would be far more revealing.

This year, health coverage for a family of four exceeded $25,000 — an astonishing amount. Young families will likely never reach their annual deductible.

What they truly receive for their premium is a false sense of security — the assumption that if a serious illness or accident occurs, they are covered.

However, they may not be covered at all.

They may be insured by a company that denies a third or more of all claims.

And they won’t discover this until it’s too late.

Transparency is the sole means to establish fairness in the insurance market.

President-elect Trump’s health nominees have stated that there is too much collusion between the industry and federal authorities, with the public bearing the consequences.

They are correct — and this is a prime example of the issue.

Federal regulators must adhere to the law’s requirements: expose companies that take our money and then refuse legitimate claims.

No new legislation is necessary.

All it requires is a directive from the top.

Mr. Trump, are you paying attention?

Betsy McCaughey is a former lieutenant governor of New York and co-founder of the Committee to Save Our City.



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