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THE PROBLEM

Regardless of who we are or how much money we make, we all have the right to the high-quality health care we need, when we need it. But our healthcare system is not set up to deliver that care — instead it often prioritizes profit for executives and investors at the top. In the richest country in the world, you can lose everything if you – or a loved one – gets sick or injured, even with insurance. Private insurers deny over 248 million claims per year — each of those is a test, treatment, or medication that an individual and their health care provider have agreed they need.

Greedy executives at private health insurance corporations pad their profits by systematically refusing to pay for care when we need it most through claim denials, prior authorization denials and inadequate provider networks. Insurance companies deny more than $260 billion in claims annually – refusing our care to increase their profits. The more they refuse, the bigger their profits. In 2021, at the height of the pandemic, seven health insurance CEO’s raked in $283 million. The result is that people in need of health care, sometimes life saving care, are left suffering and many others go into medical debt. 

STRUCTURAL SOLUTIONS

At the core of the epidemic of care denials in this country is the role health insurers have come to play as the final deciders of medical necessity, overriding the combined judgment of medical professionals and the individuals seeking care. At the end of the day, private insurers have a profit incentive to deny care, and those profits come at the expense of our care and health outcomes. In order to address the problem of care denials, this relationship must change. Long-term, Congress must pass Medicare for All. In the immediate term, state and federal legislators must pass legislation to ban the use of prior authorization and claim denials. Additionally, truly public insurance programs without profit incentives like traditional Medicare and Medicaid must be protected and expanded. Protecting these public programs includes deprivatization and elimination of private insurer intermediaries from the programs.

STEPPING STONE REFORMS

Short of the above structural policy solutions, there are smaller scale actions that elected officials and health insurance companies can take today to reduce denials and delays and ensure more people can get the care they need:

Policy Recommendations for Elected Officials

  • Data collection & transparency: Require collection and public release of information on the scale of care denials and their breakdown by market, plan, geography, race, gender, age, income, and (dis)ability status. This information is not currently publicly accessible and would be beneficial in determining and addressing systemic inequities.
  • Ban step therapy and non medical switching: Private insurance companies often require people to try a cheaper alternative drug rather than the one their provider prescribed, sometimes requiring patients to switch from drugs that are already working for them to something new, or worse, something they have already tried in the past that they know does not work for them.
  • Limit the use of prior authorization: Insurance companies argue that prior authorization protects patients from getting unnecessary care. In reality, the scale of prior authorization denials shows that the real harm to patients is the inability to access care, not that they’re receiving too much.
  • Ban AI and auto-denials: Insurance companies have been found to use AI and algorithms to make claim decisions. This practice overrides the expertise of prescribing physicians and leaves patients stuck navigating a black hole of bureaucracy when they need care, sometimes urgently.
  • Ban ghost networks: If insurance companies are going to require that their policyholders only see in network providers, they must have in-network providers that patients can actually access in a timely manner and within a reasonable distance. However, many insurance plans have network directories full of providers who are not accepting new patients, are no longer in network, or are no longer practicing in the area.
  • Take the claim denial appeals process out of private insurance companies’ hands: Ultimately, insurance companies should not be making decisions about the medical necessity of a treatment that a medical provider has prescribed — that decision should be between patients and their providers. Insurance companies that decide whether a denied claim was valid have a clear interest in upholding their previous decision because it makes them money. We need to remove this profit incentive by putting the appeals process in public hands that are accountable to us.
  • Increase funding to protect patients by fining bad actors: Increase funding for enforcement of existing laws governing prior authorization and claim denials, and for case workers to support people being denied care, funded by fines of insurers for high rates of denials overturned on external appeal.
  • Stop Medicare Advantage plans and state Medicaid managed care plans from overbilling and extracting tax dollars for profits

Policy Recommendations for Health Insurers:

  • Proactively publicize rates of denied claims/prior-authorizations by market, plan, state, geography, gender, disability and race;
  • Stop denying care, and overturn any existing denials, for treatments recommended by medical professionals
  • Expedite payment of claims
  • Immediately cease the practice of using artificial intelligence and algorithms to initiate care denials in bulk
  • Ensure premiums and public funds are only used for legitimate purposes related to paying for care:
    • Execute a publicly shared audit and reimburse federal and state governments for the public money diverted by claim and prior-authorization denials within Medicaid (managed care), and Medicare (Medicare Advantage)
    • Stop the overbilling of Medicare through Medicare Advantage plans & the overbilling of state Medicaid plans through managed care plans
    • Disclose monetary value of total denied claims/prior-authorizations broken down by internal and external appeals processes and total percentage of profits taken by denying care
    • Cease using policyholder premiums to override the will of people who need health care by lobbying and donating money to politicians’ campaigns, PACs and any other entities that can advocate for or against the defeat of elected officials
    • Cease using public funds and policyholder premiums for stock buybacks

PRESS CONTACT: Unai Montes, u.montes@peoplesaction.org, 202-660-0605 (bilingual) 

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