A nurse walks down a hallway during a night shift at a field hospital. In addition to their hard work, nurses are fighting insurance companies that deny claims form their patients. | David Goldman/AP
SACRAMENTO—How many times has this sequence happened to you or someone you know: You get sick. You go to the doctor. She prescribes treatment for you…antibiotics, medications, 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 non-profit Kaiser Family Foundation, which conducts health research and publishes its findings. In some states—Alabama is the worst—it’s much higher than that. And insurers deny three of every eight claims out-of-network doctors submit.
And while many insurers honor most claims, there’s one in California—the state won’t say who—which bounces seven out of every eight. Reasons for denials vary wildly by state: No referrals from primary care MDs produces a 9% rejection rate in California, and a 97% rate in next-door Arizona.
Now California State Rep. Liz Ortega, D-Hayward, plans to break consumers in that state out of that trap, and the California Nurses Association, the largest affiliate of National Nurses United, enthusiastically backs her measure, AB682.
“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, AB682 would shine a bright spotlight on the venality, viciousness and downright hazard—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 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.”
Such insurer denials of health care claims have also led to unionization drives by both MDs, with the Committee on Interns and Residents, a Service Employees sector, and RNs, with National Nurses United, the AFT’s Federation of Nurses and Health Professionals, and the Steelworkers’ nurses sector, among others.
The denials are also a key reason, though Gutierrez Vo did not say so, why NNU has been pounding the pavement for more than a decade for government-run single-payer national health insurance.
Such a system, the union says, would be cheaper for patients. The higher taxes single-payer would require would be far less than a typical patient’s costs in co-pays and premiums, not to mention costs of denials of care. And it would put the insurers who put profits before patients, and use denial of care to jack up those profits, out of business.
“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,” State Rep. 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 bill orders 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. “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 Rep. Ortega’s bill is that it’s confined to California, home to 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 passed several calculated that 35,000-44,000 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 planned to gloat about record profits. His murder led to investigation of United’s record. The national denial rate for health care claims was 19%. United’s was almost double that (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 denial rate of 37%.”
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