Fixing Health Insurance’s Inappropriate Denails
In the wake of the UnitedHealth CEO killing allegedly by Luigi Mangione, we commoners have displayed our rage, frustration, and schadenfreude at the way we have been mistreated—Democrats and Republicans alike—in the interest of corporate profits. We pay big dues for years, and when the time comes, we’re told the investor’s yachts are more important than our loved ones' lives.
Medicare for all? Alas, no…
This system sucks, and if I had my druthers, I’d take it out behind the barn and put it down. Capitalism is fine for consumer goods and services, but the lack of conscience and awareness created through investment portfolios turns corporations into psychopaths. I don’t know my little nest egg of a 401k is invested partially in UH, Aetna, and others through mutual funds—but I’ll bet a little bit is. But like most people lucky enough to even have a nest egg, I don’t have time or know-how to do better, and all I really see or understand is the quarterly report. When I see my nest egg grow, I am comforted I might have enough some day; when it shrinks, I worry.
So given half the country jumps in fear every time some televised boogeyman says “socialism,” I think we’re stuck with private insurers for the foreseeable future.
So how can we fix it? The frustration our antihero awoke surrounds inappropriate denials, and I have a solution that I think would work by exploiting capitalism’s unbridled desire to maximize profits.
A problem of incentives
The root of the problem is that there is no incentive for health insurance companies to correctly assess valid claims. There is, however, financial benefit in denying a valid claim, as sometimes the insured pays the claim themselves, allowing more profit for the company.
This is akin to a one-sided bet: the insurance company has nothing to lose by declining claims. Any burden falls on the insured, who must make the time and trouble to challenge the denial.
A solution of incentives
The solution I propose is a “statutory time and trouble reimbursement” fee—but that’s a mouthful, so let’s just call it “T&T”. T&T would apply when a denied claim is overturned—a small fee payable to the insured to cover costs imposed on them by that inappropriate denial.
Insurers will, of course, immediately go into hysterics that T&T will hurt profits and drive up health insurance costs. This is nonsense, as there is a very simple and straightforward way to avoid paying T&T: correctly assess claim legitimacy in the first place. Only if they continue the greedy, corrupt practice of overzealous denials would T&T hurt their profits.
Objections and why they’re invalid
Insurers can still reject truly flawed claims with no penalty. Trying to get payment for having your carpets homeostatically tuned to reduce your allergies? There is no evidence for that, so they can safely reject it.
But when they blindly reject a bunch of claims because claim processing got backed up, or they’re hoping to make 13% instead of 12%—that’s no longer a free bet. Overturned claim denials will sting 'em where it matters: right in the wallet. If that cost is sufficient, then those “unfixable” problems with claims departments that have been getting worse for years will suddenly get fixed in a hurry, ensuring they keep T&T payouts to a minimum.
What will it cost them? It won’t hurt a legitimate penny they make. Sure, they may have to train their claims adjustors better or hire more of them—but they should have been doing that all along. And they’ll have to pay out on all those legitimate claims that we subscribers were saddled with, or acquiesced to pay because it was easier than fighting—but likewise, they should have been paying those all along. The only loss they will see are gains that were ill-gotten in the first place.
Possible T&T Fee Structures
So what would the payment/fee structure for T&T be? This is open for debate, but a few ideas:
- A fixed rate of $100 would solve low-value rejections, but the higher the claim, the more it warrants a gamble to challenge a claim: expensive claims suggest the insured is literally sick and tired, a good time for exploitation.
- A percentage of a claim, say, 20% would provide variable risk that scales with claim value, but small-dollar rejections might continue: a few bucks here and there, not worth the hassle to challenge them. We might continue getting nickled and dimed.
- A hybrid, then, such as $40 + 10% of claim amount to balance risks on high and low value claims; or a progressive structure: $20 + 20% up to $100, 10% up to $1000, 5% above that.
- In a completely different tack, T&T fees could be based on effort required to overcome the rejection. When you need to send an e-mail, $20. A real letter: $50. Phone call: flat-rate $50. Or, if their phone system can keep track of how long we’re on the line, $10/call + $1/minute over 5. That would certainly discourage understaffing and long hold times.
I imagine different states will take different tacks. It could be superbly interesting to see how different T&T would affect accuracy of claim processing, and the degree to which some states implementing T&T would fix problems in non-T&T states. In hopes of avoiding T&T laws in other states, they might just go straight. Or, depending on their level of hypocrisy and evil, they might only fix common, low-value claims (making it “good enough”) just so they could still get away with rejecting big, expensive claims.
Side-effects and alternate uses
Depending on the T&T fees set, the fees might even create a small industry of private claims adjustors who will work on the insured’s behalf to handle rejected claims on a contingency basis, for those that struggle with insurance hassles on their own. Small businesses—good for the economy.
I think a similar system might be developed for preapprovals. Health insurers would need to state in the first volley everything required to attain preapproval. Added or modified requirements would be disallowed or subject T&T fees, to prevent later requirement creep (the endless “one more thing”: Oh, no, we need this other thing too—Oh, and now that other department wants something else…)
Assign responsibility
Similarly but separately, insurance companies sometimes reject coverage of a doctor’s prescribed medications or course of treatment, insisting on a cheaper alternatives, at least for a trial period to see if they work. I’m not very keen on this, but if they want to do it, prescribing is practicing medicine. An insurance company overriding a doctor’s medication or treatement choices should be liable for the results. If these actuarial companies want to reap the benefits of their choices, they should also be subject to the risk—in this case, medical malpractice if their substitutions provide a negative outcome for the patient.
Once again, add risk to balance the rewards, and I think our quality of care won’t be in the back seat anymore.
Summary
Pursuing a reward often comes with risks. Somehow, insurers have weaseled their way into rewards with no risks (ironic, given risk is their business). Given the animosity that’s come out after the UH CEO shooting, it’s clear there’s a problem here. The solutions here do not require a radical change, like a single-payer, Medicare-for-all solution; they are tweaks to the existing system to ensure rewards are not unchecked, but instead balanced by appropriate risks.
What should you do now?
Insurance regulations are on a state-by-state basis, so write your state representatives to demand these and other changes to address the abuses and usurpations that have become commonplace in our healthcare insurance system.
Also, share this idea with friends, family, on social media, talk about it with your coworkers. The brokenness of our health insurance system is one of the few things we all agree on. We can fix this, if we work together.
Beware of Division
Beware of the propaganda that’s going to come: the insurance companies are going to try to split us left and right, and sic us on each other so we devolve into fighting with eachother. They and their greed are the problem. They can use their ill-gotten gains to hire a forked-tongued, sweet-sounding marketing propagandist to set us at each other’s t hroats. Don’t let them con us into taking our eyes off the prize and distract us into squabbling with each other instead of fighting united.
Look, some of y’all might not approve of the way I live my life. I don’t understand the way a lot of people live their lives, left and right alike. And you know what? That’s ok. I might scratch my head, but I’m happy to live and let live—I think that’s the essence of freedom in America—and I hope you believe that too.
Being enemy of my enemy, you may not be my friend—but we can be allies. If we want to have a chance at winning this, we damn well need to ally, because our shared enemy is loaded with money and the political power it buys to “lobby” our representatives toward doing what they want. By setting aside our differences and working together for our common good, we will both stop getting screwed all the sooner.
Let’s make it happen.