How many times has this sequence happened to you or someone you know?
You get sick. You go to the doctor. She or he prescribes treatment for you…antibiotics, medicines, surgery, physical therapy, whatever. Her office submits the payment claim to your insurance company. The company turns thumbs down, and you get stuck with the bill—a bill that can run into thousands of dollars or even land you in bankruptcy court.
The answer is “too often.” Insurers turn down one in every five claims nationwide, according to the nonprofit Kaiser Family Foundation, which conducts health research and publishes its findings.
Now California State Rep. Liz Ortega, D-Hayward, plans to break consumers out of that trap, and the California Nurses Association, the largest affiliate of National Nurses United (NNU)—a sister union of AFSA in the AFL-CIO—enthusiastically backs the measure.
“The new bill would mandate public reporting on the denials of insurance claims for California’s patients, something nurses believe can expose the broken trust between insurers and patients at the root of our broken health care system,” the union says in introducing its support.
In short, this legislation would shine a bright spotlight on the venality, viciousness and downright hazards—including avoidable deaths—from the for-profit health insurance system.
“Insurance companies see our patients as numbers on a spreadsheet, but they’re real people to us as nurses at their bedsides,” said California Nurses Association President Michelle Gutierrez Vo, RN. “Having publicly available information on why insurers deny claims is a major move to expose how health care is systematically denied to our patients. Nursing is about building trust with our patients. This bill will reveal how that trust is often broken by our healthcare system.”
“Millions of Californians are paying high monthly premiums for their health insurance, only to find that when they get sick and need it, their claims are denied,” Ortega told NNU. “Statistics on health insurance denials are not made public.
“But the numbers we have from Healthcare.gov paint an alarming picture: One in five claims are denied even if you remain in-network. If you’re forced to seek care out-of-network, you have nearly a 50/50 chance of having your claim denied.”
Ortega’s legislation would order all insurers doing business in California to report claims denial figures, both in network and out of network, to the state’s departments of Insurance and of managed health care. Those claims denials would be broken down by in-network versus out-of-network claims denied, the specific reasons for the denials and how many consumers—typically less than 1%, the Kaiser Family Foundation says—exercise their rights of appeal.
“This information will be especially relevant for denied claims for timely, life-saving care,” NNU said.
“Taken together, these measures will publicly document why insurance claims are denied, exposing the tactics companies use to delay or deny coverage….As nurses see every day, the current system leaves patients with little to no information from health insurers who have tried to keep denial processes secret.
“While California prides itself on a low uninsured rate, CNA nurses support AB682 to expose how health care plans are deliberately underinsuring customers, leaving nurses’ patients without essential health care and with no explanation why care has been denied.”
The only problem for workers with Ortega’s bill is that it’s confined to California, even though the Golden State houses one of every eight U.S. residents. As the Kaiser Family Foundation reported, the problem of insurer denials for coverage is nationwide.
Indeed, a Harvard Medical School study just before the Affordable Care Act (ACA) passed calculated 35,000 to 44,000 people a year died because they lacked health insurance.
And for all the improvements in health insurance coverage the Obama-era ACA produced, lack of insurance claims information—including denials—in a timely manner and a form consumers can understand is still a big loophole in the law, the foundation reports.
The loophole was further exposed when the CEO of one of the largest health insurers, United Health Care, was gunned down on a Manhattan street several months ago while on his way to a board meeting—a meeting where he was planning to gloat about ever-higher profits. The murder in turn led to investigation of United’s record. The national denial rate for health care claims was 19%. United’s was almost double that, at 32%. Only Blue Cross Blue Shield of Alabama was worse (35%).
“Insurers reported receiving 425 million claims in 2023, with 92% (392 million claims) filed for in-network services,” Kaiser reported. “Of these in-network claims, 73 million were ultimately denied, resulting in an average in-network denial rate of 19%. Out-of-network claims totaled 33 million, with an overall higher denial rate of 37%.”
