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The health insurance industry’s dirty secret is that it’s no longer selling insurance: It’s selling a crapshoot.
The risk of having your health insurance claim denied is roughly 10 times what it was a decade ago.
Back then, insurers seldom rejected claims.
UnitedHealthcare nixed 1.1%, Humana 1.9%, Aetna 1.5% in 2013, per the American Medical Association.
By 2022, major insurers were refusing to pay, on average, 15% of claims, according to a national survey of hospitals and health-care providers by Premier, an insurance consultant.
The figure continues to shoot upward, with some companies today denying almost half of all claims, according to researchers at the Kaiser Family Foundation.
But you can’t find out which companies, and that makes choosing a plan a high-stakes gamble.
If you’re seriously ill and need costly care, a denied claim could push you into bankruptcy.
The Affordable Care Act of 2010 requires the Department of Health and Human Services to monitor claims denials and provide the information to the public.
But government officials — coopted by the industry — simply don’t do it.
Consumers be damned.
Uncle Sam is allowing claims denial to become a major profit center for insurers.
The assassination of UnitedHealthcare CEO Brian Thompson is igniting an outpouring of vitriol against insurers.
Alleged killer Luigi Mangione railed in a manifesto against the “corruption and greed” of the industry.
No industry malfeasance could ever excuse murder.
Period.
Even so, it’s past time for companies’ denial rates to be made public.
You aren’t really insured if your insurer can deny valid claims with impunity.
That is what’s happening, based on information that Kaiser researchers were able get about plans sold on the Affordable Care Act exchanges.
ACA plans on average refuse to pay 17% of claims.
But the researchers found that numerous insurers nix 30% or more, including Meridian Health Plan of Michigan, United Healthcare of Arizona, and Optimum Choice in Virginia.
Celtic Insurance Company in Florida refused 42% of claims in 2021.
You can’t really call that insurance.
The problem is not unique to ACA plans.
Premier’s March 2024 survey found that insurers overall denied 15.7% of Medicare Advantage claims, 15.1% of Medicaid managed care claims and 13.9% of claims from non-government plans.
That staggering denial rate should be the first fact any consumer sees when choosing a plan, and plan ratings should include denial rates.
Hiding them is an outrage.
Insurers cite lack of medical necessity for under 2% of denials, lack of prior authorization for 8%, and about 13.5% for the service not being covered under the plan.
But the major reason for denials — “other,” accounting for 76% of them — is a big black hole. Anybody’s guess.
Patients rarely appeal — only 0.2% of the time, per Kaiser.
An appeal means coaxing your doctor and staff to spend hours filling out forms and making repeated phone calls to joust with an insurance company employee.
Few doctors are eager to take on this ordeal.
But appeals pay off. In the ACA plans, Kaiser reports that 41% of turn-downs get reversed — an indication that plenty of necessary care covered by plans is being denied.
Employers and their workers should be able to get information on how often insurers deny claims, and so should Medicare Advantage plan users.
But federal regulators have capitulated to pushback from the industry, and refuse to collect the information.
State regulators aren’t any better.
State insurance commissioners collect denial data, but with the exception of Connecticut and Vermont, they don’t disclose that information, a ProPublica investigation found.
New York state publicizes the number of complaints against insurers, but not actual denial rates — which would be more telling.
Nationwide, health coverage for a family of four topped $25,000 this year — a staggering amount. Young families will likely never meet their annual deductible.
All they’re getting for their premium is peace of mind — the knowledge that if a terrible illness or accident happens, they’re covered.
Truth is, they may not be covered.
They may be insured by a company that denies a third or more of all claims.
And they won’t know it until it’s too late.
Transparency is the only way to make the insurance market fair.
President-elect Trump’s health nominees have argued that there’s too much coziness between industry and the federal bureaucracy, with the public paying the price.
They’re right — and this is an odious example.
Federal regulators need to do what the law requires: Expose companies that take our money and then deny legitimate claims.
No new law is needed.
Just an order from the top.
President Trump, are you listening?
Betsy McCaughey is a former lieutenant governor of New York and co-founder of the Committee to Save Our City.