Overview:
Black insurance customres face higher coverage-denial rates and are more likely to face charges for services that should be free. Despite calls for action, the government hasn’t done much to address the inequalitiy.
The brazen murder of UnitedHealthCare CEO Brian Thompson, shot early in the morning on a Manhattan sidewalk, unleashed pent-up outrage at the healthcare industry. Fueling the anger is a decade-long trend: a rising number of healthcare claims health insurers are refusing to pay.
While that trend has affected nearly everyone with health insurance, Black people have borne the brunt of the increase in claim denials. Studies show they are far more likely than whites to have their insurance claims rejected — and more likely to pay out of pocket for preventive care and screenings that, by law, should be free.
This summer, a group of civil rights and healthcare advocates called on Department of Health and Human Services Secretary Xavier Becerra to investigate the problem.
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In a letter to Becerra, the Healthcare Equality Network “express[ed] our deep concern” regarding the widespread practice of unjustified claims denial “for millions of American patients.” The situation is becoming chronic, they say, and is causing real harm to a lot of people.
“Claims are often denied without cause and lead to financial and emotional distress for individuals already burdened with the stress of healthcare issues, especially in our most vulnerable communities,” the group said in its letter.
A recently published study of more than 1.5 million patients with employer-sponsored insurance or ACA Marketplace plans between 2017 and 2020 found that low-income patients, those without a college degree, and from racial and ethnic minority groups — were more likely to have their insurance claims denied for free preventative tests than college-educated patients with higher incomes.
At the same time, it can be a struggle for Black people to get health insurance in the first place. Data shows they are less likely than their white counterparts to have employer-sponsored health insurance, due in part to the disproportionate number of Black people working in jobs that don’t provide comprehensive coverage.
In 2022, just over 56% of Black Americans have private health insurance, compared to three-quarters of whites. Some 46% of Black people are covered by Medicaid or other public health insurance, while around 8% were uninsured, compared to about 5% of whites.
When they are able to get health insurance, Black people are more likely to have high-deductible health plans or limited coverage options — so-called “junk plans” that increase out-of-pocket expenses as well as the odds that legitimate claims will be denied.
The issues are happening despite White House attempts at reforms, including the Affordable Care Act of 2010.
Within 12 years, the ACA helped slash the rate of uninsured Black people in half, in part by offering affordable plans on a public health insurance marketplace. But a KFF analysis found that marketplace insurers denied nearly 17% of qualified claims in 2021.
One insurer — Cigna Healthcare — rejected 8 of every 10 claims filed, an astonishing number given it has 20 million subscribers and brought in revenue of $195 billion in 2023. The company was found to have denied claims without even opening the patient’s file.
Insurance companies usually refuse to cover medical services or procedures they find “not medically necessary,” or if the member’s documentation is “incomplete.”
Perhaps most concerning is insurers’ decisions to reject claims for services that should be free due to the ACA – and that race, income and education appear to be factors.
Screenings for diabetes, depression, cholesterol, and prescriptions for contraceptives were the claims denied most often. Black patients had a claim denial rate roughly 50% higher than white patients.
Slightly more than 4 in 10 low-income patients were more likely than high-income patients to have their claims denied. Non-white and low-income patients more frequently argued with insurance companies and caregivers over incorrect bills.
Many individuals paid for the tests out-of-pocket when insurance companies incorrectly told them the tests weren’t covered.
It’s unclear how many patients decided not to have the tests even when trying to manage chronic conditions. And 77% of healthcare providers say they are “moderately to extremely concerned” that if insurance companies don’t cover the medical bill, patients won’t pay it, either.
In the past, health plans weren’t required to record data on race or ethnicity. But this is beginning to change in some states. New York will soon require health insurance plans to collect demographic information for new or renewing members, although the members can opt-out if they choose.
“Say you have a large, enrolled population of African American women of childbearing age in a section of Brooklyn, right? Then the carrier could do a better job of figuring out if they have adequate labor and delivery services available,” said Elisabeth Benjamin, vice president of health initiatives at the Community Service Society of New York.
Consumers can appeal a health insurer’s denial of coverage to pay a claim or ends your coverage in several ways. Consumers also can contact their local consumer health assistance program or their Department of Insurance to complain about a health insurer’s actions.
