KFF Highlights the Harms of Insurance Complexity

November 4, 2023

Complexity in the US Health Care System Is the Enemy of Access and Affordability
JAMA Forum
October 26, 2023
By Larry Levitt and Drew Altman

[bolding by HJM]

A recent survey by KFF [discussed in HJM] … provides some hints at the scope of the problem for US consumers with various types of health coverage …

Almost 6 in 10 people with insurance reported a problem with using their health insurance during the past year. The share increases to two-thirds for people in fair or poor health, three-fourths for those who need mental health services, and almost 8 in 10 for people who use the health system the most. The result is that many delay or skip care or accumulate bills they cannot afford. …

The idea of making the health care system simpler and more transparent certainly sounds good, at least in concept. Who could disagree with the principle that everyone should be able to learn which physicians and hospitals are in their network and taking patients, or that patients should get easily understandable explanations of benefits, statements, and medical bills? And does anyone want an artificial intelligence algorithm to deny claims without any review by real medical professionals?

Yet, any push for health care simplification inevitably clashes with commercial interests. The health insurance system is structured to simultaneously maximize profits, control costs, and serve consumers, which are competing goals that add to the challenge of simplifying it. For instance, limiting denials of claims or prior authorization requests will make the system more consumer friendly, but could also raise costs and might lead to care that is less grounded in evidence.

Although mechanisms already exist to protect patients and consumers, oversight and enforcement has been uneven. A federal law passed in 2021 requires private insurers to keep clinician directories up to date even though regulations implementing that requirement have not yet been issued.

Comment by: Jim Kahn

Let’s review the key (bolded) points:

Each year, 60% of insured individuals have a problem with their insurance. Even higher for those with greater need. As we discussed recently, unaffordability of care is now pervasive. With single payer, insurance is simple and care is affordable.

Everyone should be able to learn which providers they can use, and understand their benefits and bills. Indisputable, and essential given how the current system uses networks, along with highly varied benefits and coverage rules. Single payer makes this moot — with free choice of providers, standard comprehensive benefits, and full coverage.

Any push for health care simplification inevitably clashes with commercial interests. Correct – complexity and confusion reduce costs and thus raise profits for insurers, hence their resistance to simplicity. Single payer removes commercial interests from insurance. Costs are controlled through administrative efficiencies, lower prices, and global budgets.

A federal law requires private insurers to keep clinician directories up to date and the corresponding regulations are pending. Why should a law be required to keep provider directories current?? And why are the regulations still pending three years later?? Single payer would remove private insurers and the games that they inevitably play to avoid compliance with rules to protect patients.

The blog and associated survey also discuss denied claims and how consumers don’t know how to appeal them.

Our fragmented, profit-motivated health insurance system contradicts every reasonable and real world-proven principle of health insurance design. Single payer is sane, humane, and efficient. Let’s get on with it!