Cost-Sharing, Coverage Denials, Missed Care, & Medical Debt

August 6, 2024

Unforeseen Health Care Bills and Coverage Denials by Health Insurers in the U.S.
The Commonwealth Fund
August 1, 2024
By Avni Gupta et al. 

Americans are increasingly struggling to get their health insurance to work for them. High deductibles and copayments are causing nearly two of five working-age adults to delay visiting the doctor and filling prescriptions. Those who do get care can become burdened by medical or dental debt, something almost one-third of working-age adults report experiencing. Billing errors and denials of coverage by insurance companies may contribute to this problem. Media investigations have found that insurers are becoming increasingly adept in using technology to deny payment of medical claims and pressures their company physicians to deny care during prior authorization reviews. Doctors also report spending increasing amounts of time on the phone with insurance company physicians over denials of care for their patients.

In this brief, we report findings from a Commonwealth Fund survey on the extent to which working-age adults say their insurance provider charged for a health service they thought should have been free or covered or denied coverage for care recommended by their doctors. We examined whether people challenged such errors or coverage denials, the reasons why they didn’t, and the implications for their health and well-being.

From the Discussion

The complexity of the health insurance system in the United States has left many people struggling to understand what services are and aren’t covered and their financial liabilities when they get care. On top of this complexity, insurers are motivated to avoid paying for care. Many insurers appear to be utilizing increasingly aggressive tactics to do so, deploying technology and applying pressure to company physicians to scrutinize services recommended by patients’ physicians and often to deny coverage, leaving patients with unexpected bills or delays in care.

When looking at people’s billing disputes and denials of coverage, what emerges is that many realize positive outcomes when they appeal decisions they perceive to be in error. Yet only half of those who believe they were erroneously billed or denied care actually challenged the decision or had a doctor challenge it on their behalf. The survey shows considerable consumer confusion among patients and their families about their right to appeal and who to contact. The responsibility of appealing may not be clear between patients and providers, or between employers and employees, and the documentation requirements to appeal can create additional barriers. The current system with its complicated appeals processes can be detrimental to patients who are most in need of services.

Comment by: Don McCanne & Jim Kahn

Americans often do not understand why, when we have the most expensive healthcare system in the world, so many people are left without the care they need, and are saddled with excessive medical debt for services that common sense would indicate insurance should cover. The answer is, simply, the system was designed to provide increased revenue and profits for insurers and other intermediaries by increasing administrative services, which often oppose the interests of patients – thus diverting funds from medical care to executives and investors.

If you read the full report, you will find that suggested corrections to the problem are primarily in adjusting administrative functions. This misses the big picture: Protecting superfluous administrative functions by adding even more administrative functions, supervised by an industry that thrives on (and is adept at) drawing off patient care funds, hardly seems like a satisfactory solution to the problems of inadequate patient care in an environment of rising medical debt.

Of course, we know what the answer is: a single payer financing system. We need to provide comprehensive health care to everyone, and fund the system with progressive taxes that everyone can afford. Administrative functions would be drastically simplified, and directed to making health care accessible for all and paying for it without rewarding a superfluous industry that is designed primarily to create wealth rather than preserve health.