Why do so many Americans get their health care claims denied?

Many Americans are struggling to pay medical bills This is due to inadequate medical insurance coverage or claim denial by private insurance companies.

after that United Healthcare CEO Brian Thompson shooting death Earlier this month, many people took to social media to express anger at a country’s health care system We shared stories about how insurance companies are working Denied coverage for life-saving medication and Emergency surgery.

insurance company Deny 10% to 20% of medical insurance claims ProPublica reported in 2023 that while government data is limited, they are receiving information.

Approximately 1 in 5 adults They said their insurance company has denied claims in the past year, According to a separate 2023 report from KFF, a nonprofit health research organization. Among adults who use health care the most, more than one in four had their claims denied.

“Health insurance companies are at the center of the system, controlling how health care is delivered, what is covered and what is not,” said Christy Ford Chapin, associate professor of history at the University of Maryland, Baltimore County. “We are determining what a standardized blueprint treatment will look like.” and the author of the book “Ensuring America’s Health.”

People are frustrated that important medical decisions are being made by insurance companies rather than by patients or doctors, Chapin said.

Reasons why a medical insurance claim is denied

One way insurers control costs is by denying claims, said Timothy McBride, co-director of the Center for Health Care Advancement Policy and Economics at Washington University in St. Louis.

There are many reasons why your claim may not have been approved. It may not have been covered by insurance in the first place, it wasn’t deemed medically necessary, prior authorization was required, or the doctor wasn’t in your insurance company’s network, McBride said.

Beatrix Hoffman, a history professor at Northern Illinois University and author of the book, says that private commercial insurance companies are now paying less claims to make a profit in the wake of the passage of the Affordable Care Act (Obamacare). He said he is focusing on rejection. “Healthcare for some people”

Hoffman said that before the ACA, health insurance companies could simply deny coverage if you had a pre-existing condition. ACA We cannot deny coverage or charge additional fees If you have a health problem.

Plaintiffs filed separate lawsuits for United Health and humana Last year, he was indicted for allegedly using a flawed AI tool to deny insurance to elderly patients.

McBride said the “unfortunate incident” with the United Healthcare CEO has sparked “a lot of pent-up anger” at our nation’s increasingly privatized health care system.

more Half of Medicare beneficiaries You are enrolled in a Medicare Advantage plan, which is a government-funded private health insurance plan.

“Even if you’re currently in a public program, you probably have private insurance,” McBride says.

Insurance companies have codes associated with specific drugs or procedures that are used to determine whether to grant prior authorization, but these codes Not standardized across insurance companies.

“Having each insurance company have their own 5,000 sets of codes is not serving them well,” said David Cutler, a health economist at Harvard University. “Each insurance company is allowed to have a different prior authorization system, for example for prescription drugs and prescription antihypertensive drugs.”

Cutler said all insurance companies are required to provide answers within a certain amount of time so patients and doctors don’t have to wait. Standardizing codes also prevents patient fraud by insurance companies, Cutler said. They would not be able to deny covered patient procedures or medications.

According to , if your claim is denied, you have the right to appeal. healthcare government you can File a dispute with your insurance company or together Independent Third Party.

How we got here

After World War II, President Harry Truman supported universal health care, but it provoked opposition from the American Medical Association, which called it “universal health care.” “Socialized medicine””It never got off the ground.

In the early 20th century, a variety of health care models existed in the United States, Chapin said, run by consumer groups, labor unions and African-American mutual aid societies.

Prepaid physician groups, supported by progressives and customers, were one popular model. Instead of going to your general practitioner, then your heart surgeon, then your orthopedic surgeon, imagine having access to all of these doctors in one place, Chapin says.

“They were also an insurance company. You paid a monthly or quarterly fee to that group, not to the insurance company,” Chapin said.

But doctors who participated in this model could have their licenses revoked by the American Medical Association, which had more authority at the time, Chapin said.

The AMA was concerned that physician associations and insurance “would inevitably lead to corporate control of health care, followed by government control,” Chapin wrote in his book “Ensuring America’s Health.”

Chapin explained that the rise of large corporations from the end of the 19th century to the 20th century threatened the independence of doctors. “Physicians didn’t want to work within a corporate hierarchy dominated by non-physicians,” she says.

But the AMA compromised during the Great Depression, agreeing to insurance that was only available to low-income households. In 1938, it invented the private insurance company model that is still used today. One key feature of this model is that it requires insurance companies to pay physicians for each service they provide.

“They came up with this model because they were under tremendous political pressure during the Great Depression, when health care reform was clearly the low-hanging fruit as the New Deal reforms were being passed. There was a lot of talk about health care reform,” Chapin said.

The health care paradox: Millions of Americans are struggling, but spending is high.

Physicians get paid when they go to an exam room, they get paid to give an injection, and they get paid to run a lab, Chapin said. that’s understandable Patients may think they are only providing the same “superlative care” they provide to their families, which ultimately drives up their bills, Chapin said. he said.

Or, she added, if you have a Medicaid patient, for example, you may feel under-covered. Medicaid payment rate Premiums tend to be lower than other types of insurance.

“They’re acting rationally because of the incentives they’ve been given. They’re acting in a way that everyone would act in their position,” Chapin said.

However, this model encourages overspending. Having a prepaid physician group will ensure that your bills don’t inflate because you have to pay for tests and procedures out of pocket. However, since doctors earn a fixed salary and a share of the group’s profits under this model, they will not want to ration their care either.

“They’re in the room with the patient. You want them to make decisions there. You don’t want it manufactured by a company that’s headquartered many states away,” Chapin said.

Our health care system excludes people, but it also most expensive healthcare system Mr. Hoffman pointed out:

Medical spending in 2022 will be It reached 16.6% of US GDP. But other wealthy countries spend an average of 11.2% of their GDP, according to the Peterson Center on Healthcare and Kentucky’s Health Systems Tracker.

“People always say, ‘Well, we can’t afford to cover everyone,’ but the reality is we can’t afford not to cover everyone,” Hoffman said.

Hoffman said universal health care, which provides medical care for everyone, would actually be cheaper because everyone would be paying into the system. Governments can also negotiate drug prices with health care providers. (Medicare currently can negotiate prices directly with drug companies for only 10 drugs.)

“Countries with universal systems can negotiate with drug companies and get more reasonable prices for their citizens,” Hoffman said.

A universal health care system funded by one entity, known as a single-payer system, could lead to savings of 13%. Over $450 billion annually; According to a paper published in the medical journal Lancet.

“We need to take the profit motive out of health care. It should never have been in there in the first place,” Hoffman said.