By Consumers for Quality Care, on July 5, 2023
Health insurance is worthless if consumers don’t know what medical procedures or medications are covered, yet often consumers, through no fault of their own, are unaware of what an insurer will and will not cover until it is too late, according to ProPublica.
It’s hard to know exactly how often insurers refuse to cover certain treatments. Lawmakers and regulators have the tools to collect this data but have yet to do so in a comprehensive way that benefits consumers.
ProPublica has uncovered the steps some insurers will take to deny coverage, from scrutinizing specific costly cases to using artificial intelligence to deny multiple cases in seconds with little or no review from a medical professional. ProPublica’s attempt to uncover insurers’ denial rates proved to be more challenging than even their reporters imagined.
Although the Affordable Care Act (ACA) requires insurers to publish denial rates, ProPublica found that the federal government has collected only a fraction of the data that they are entitled to access. While ProPublica found that State Insurance Commissioners have more reliable denial rates from insurers, not one office was willing to provide this information when ProPublica made a request.
There are serious consequences for consumers when this information isn’t made available to them, according to Karen Pollitz, a Senior Fellow at KFF, who has repeatedly written about this issue. “This is life and death for people: If your insurance won’t cover the care you need, you could die. It’s all knowable. It’s known to the insurers, but it is not known to us.”
Some estimates put insurers’ denial rates anywhere between 10 to 20 percent. Wendell Potter, a former Cigna employee, argues that denials are often lucrative for insurers since consumers typically appeal less than one percent of denials. “That’s money left on the table that the insurers keep,” he said.
A recent KFF study found that most consumers (85 percent) want to have access to insurers’ denial rates. Experts agree that insurers will likely not disclose this information unless a mandate is put in place, such as the hospital price transparency rule, which was put in effect in early 2021.
The federal government can obtain denial rates from both health plans sold on the ACA marketplace and employer-based plans. Currently, the government only collects data from plans on the marketplace. Federal regulators say they will eventually extend this requirement for plans outside the marketplace, but to date have yet to do so.
Research also suggests that data reporting on denial rates vary greatly from insurer to insurer and year to year, with denial rates from companies ranging from 2 percent to as high as 50 percent, and one company reporting a denial rate of 66 percent one year, and just 7 percent the following year. Because reporting is not standardized or audited, these drastic discrepancies do not help consumers make the informed decisions when selecting health plans.
CQC urges lawmakers and regulators to hold insurers accountable and request they disclose their denial rates, something that should have been done over a decade ago, when ACA was first passed. Insurers should not be allowed to arbitrarily deny medical claims, boosting their profits while putting consumers in medical debt. Finally, CQC urges all consumers to know their rights when a health insurance claim is denied and to use the appeal process to avoid paying unwarranted medical bills.