Survey findings show how health insurance denials affect Americans

Patients who have their claims turned down by private insurers often incur debt they need months to pay off, according to an analysis of 4,589 survey responses.  

The Commonwealth Fund, which commissioned the nationally representative survey and held related focus groups, says more than half the field reported such debt topped $1,000 in their household. 

Almost one-third indicated the denial had led to a delay in their healthcare, and one in five said their health problem worsened as a result.

These findings and others laid out in a report posted June 4 prompted Commonwealth Fund leaders to call for greater transparency—along with expansion of appeal rights and standardization of utilization review processes—among all private payers. 

Industry-wide adoption of such measures is needed to “help patients have confidence in their insurance, [knowing] it will enable them to stay healthy and avoid medical debt,” says Commonwealth Fund senior scholar Sara Collins, PhD, a co-author of the survey report. 

Other key findings in the report include:

One in five privately insured adults report that they or a family member were denied coverage for doctor-recommended care in the past year. 13% experienced a prior authorization denial before care was received, while 8% experienced a claim denial after care had already been provided and 1% experienced both types of denials, the Commonwealth Fund reports. 

Prior authorization denials often delay medical care, worsen health problems and cause worry and anxiety. 41% of people who experienced a prior authorization denial said it delayed their care, and more than a quarter (28%) said their health problem worsened as a result. More than 60% reported that the denial caused worry and anxiety. “Some focus group participants said the experience of a coverage denial had led them to avoid seeking care afterwards,” the report authors note. 

Only about half of people who experience a coverage denial choose to appeal. “Many are unsure they have the right to challenge the decision or doubt it would make a difference,” the authors remark. Among those who did appeal a prior authorization denial, more than half ultimately received some form of coverage—either for the recommended care (30%) or an alternative (25%). One-third (33%) of those who challenged a claim denial had their bills reduced or eliminated. Many patients reported waiting two weeks or longer for a decision.

Analyst opinion: Government needs to step in and step up 

The Commonwealth Fund calls for a number of policy prescriptions to address the problem of claims denials by private insurers. 

Along with the measures named above, these include  

• Restoring federal funding for consumer assistance programs that help patients understand their coverage and appeal insurers’ decisions; 
   
• Expanding public reporting requirements on claim denials and appeals to improve transparency and accountability; and  
   
• Requiring clear, plain-language explanations of coverage decisions and appeal rights, and making the appeals process easier for patients and caregivers to navigate. 

A sticky situation that ‘demands a policy response’ 

Commonwealth Fund president Joseph Betancourt, MD, a primary care physician, suggests that altogether too many patients experience undue discouragement trying to navigate prior authorization processes. 

The hassle is “difficult, time-consuming and frustrating for all involved,” Betancourt says. “In many cases, it leads to delayed care or no care at all; in the worst cases, it puts patients’ lives at risk. When oversight overrides clinical judgment without good reason, quality of care and patient safety suffer, and that demands a policy response.”

The Commonwealth Fund is rated high for factual reporting despite evidencing some left-of-center partiality, according to a credibility watchdog. 

Read the full report here.