Many Americans are struggle to pay their medical bills due to inadequate health insurance coverage or denial of claims by private insurers.
After the Fatal shooting of UnitedHealthcare CEO Brian Thompson Earlier this month, many people took to social media to express their anger at the country’s health system and shared stories of how insurers have denial of coverage for life-saving medications And emergency surgeries.
Insurers refuse between 10% and 20% of health care requests they receive, although government data is limited, ProPublica reported in 2023.
About 1 in 5 adults said his insurer had denied a claim in the past year, according to a separate 2023 report from KFF, a nonprofit health research organization. Among the adults who use health care the most, more than one in four have had a request for reimbursement refused.
“Health insurers are at the center of the system, deciding how medicine is practiced, what is covered, what is not covered, what standardized treatment looks like,” said Christy Ford Chapin, associate professor of history at the University of Maryland, Baltimore County. and author of the book “Keeping America Healthy.”
People are frustrated that insurers make key health care decisions, not patients or doctors, Chapin said.
Why health care requests are denied
Insurers manage costs by denying claims, said Timothy McBride, co-director of the Center for Advancing Health Services, Policy & Economics Research at Washington University in St. Louis.
There are a variety of reasons why your claim was not approved: it may not be covered by your insurance in the first place, it is not considered medically necessary, you had to obtain prior authorization or your doctor was not part of the insurer’s network, McBride. said.
Private, for-profit insurers are now focused on denying claims to make a profit following the passage of the Affordable Care Act, or Obamacare, said Beatrix Hoffman, a history professor at Northern Illinois University and author of the book. “Health care for some. »
Indeed, before the ACA, health insurance companies could simply refuse to cover you if you had a pre-existing condition, Hoffman said. The ACA cannot deny coverage or charge you more if you have health problems.
Plaintiffs filed separate lawsuits against UnitedHealth And Human last year for allegedly using faulty AI tools to deny coverage to elderly patients.
The “unfortunate incident” with UnitedHealthcare’s CEO has sparked “a lot of pent-up anger” toward our increasingly privatized health insurance system, McBride said.
More than half of Medicare beneficiaries are enrolled in Medicare Advantage plans, which are private health insurance plans funded by the government.
“Even if you’re currently in a public program, you probably have private insurance,” McBride said.
Insurance companies have codes associated with a specific drug or procedure, which they use to determine whether they will grant prior authorization, but these codes are not standardized between insurers.
“We are not well served if each individual insurer has its own set of 5,000 codes,” said David Cutler, a health economist at Harvard University. “Each insurer is allowed to have a different prior authorization system for, say, routine medications, routine antihypertensives or something like that.”
All insurers should be required to provide a response within a certain time frame so patients and doctors aren’t left waiting, Cutler said. Having standardized codes could also prevent insurers from misleading their patients, Cutler said. They would not be able to deny patients procedures and medications they should cover.
If you are ever denied a claim, you have the right to appeal, depending on Health.gov. You can appeal to your insurance company or with an independent third party.
How we got here
After World War II, President Harry Truman endorsed a universal health care system, but it received backlash from the American Medical Association, which called it “socialized medicine.” It never took off.
In the early 20th century, various models of health care existed in the United States. They were run by consumer groups, unions and African-American mutual aid societies, Chapin said.
The prepaid doctor group, supported by progressives and customers, was a popular model. Instead of going to a general practitioner, then the cardiologist, then the orthopedist, imagine being able to access all of those doctors in one place, Chapin said.
“They were also the insurers. You paid your monthly or quarterly fee, not to an insurance company, but to this group,” Chapin said.
But doctors who participated in that model could have their licenses revoked by the American Medical Association, which then had much more power, Chapin said.
The AMA feared that physician groups and insurance companies would “invariably usher in corporate domination of health care, followed by government control,” Chapin wrote in his book “Ensuring America’s Health.”
Large corporations grew in the late 19th and 20th centuries, threatening doctors’ independence, Chapin said. “Doctors didn’t want to get stuck in a corporate hierarchy, with non-doctors taking the lead,” she said.
But the AMA compromised during the Great Depression and agreed to insurance that would only be available to low-income families. In 1938, she invented the private insurance company model that we still use today. One of the key features of this model is that it requires insurers to pay doctors for each service they provide.
“They came up with this model because they were under a lot of political pressure during the Great Depression. There was so much talk about health care reform because it was an obvious measure at hand as the New Deal reforms were being enacted,” Chapin said.
A health care paradox: Millions of Americans are struggling, but costs are high
Doctors get a fee if you go to the doctor, an additional fee for giving you an injection and an additional fee for running your labs, Chapin said. It’s understandable that they end up driving up patients’ bills because they might think they are simply providing “gold standard treatment” to patients like they would any family member, Chapin said.
Or they may feel like they’re being shortchanged in compensation if they have, say, Medicaid patients, she added. Medicaid payment rates tend to be lower than other forms of insurance.
“They act rationally given the incentives given to them. They act like anyone would act in their place,” Chapin said.
But this model encourages excessive spending. Having a group of prepaid doctors prevents them from running up the bill because they would have to pay out of pocket for labs or procedures. But since doctors in this model earn a fixed salary and a portion of the group’s profits, they will not want to ration care either.
“They are there, in the room with the patient. This is where you want decisions to be made. You don’t want them to be made in a company that’s headquartered in many states,” Chapin said.
Our healthcare system excludes people, but at the same time we have the most expensive health system around the world, Hoffman noted.
In 2022, health spending amounted to 16.6% of US GDP. But other wealthy countries spent an average of 11.2% of their GDP, according to a health system tracker from the Peterson Center on Healthcare and KFF.
“People always say, ‘Well, we can’t afford to cover everyone.’ “But in reality, we can’t afford not to cover everyone,” Hoffman said.
Universal health care, which would provide health care to everyone, would actually be cheaper because everyone would pay into the system, Hoffman said. The government could also negotiate drug prices with providers. (Medicare can currently only negotiate prices directly with drug manufacturers. for 10 medications.)
“Countries with universal systems have the power to negotiate with pharmaceutical companies and obtain more reasonable prices for their populations,” Hoffman said.
A universal health care system financed by a single entity, in what is called a single-payer system, could generate 13% savings, or more than 450 billion dollars per year, according to an article published in the medical journal The Lancet.
“We must eliminate the profit motive in health care. He shouldn’t have gone in there in the first place,” Hoffman said.
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