Unforeseen Health Care Bills and Coverage Denials by Health Insurers in the U.S.

By Avni Gupta, Sara R. Collins, Shreya Roy, Relebohile Masitha
August 1, 2024
 
Americans are increasingly struggling to get their health insurance to work for them. High deductibles and copayments are causing nearly two of five working-age adults to delay visiting the doctor and filling prescriptions.1 Those who do get care can become burdened by medical or dental debt, something almost one-third of working-age adults report experiencing. Billing errors and denials of coverage by insurance companies may contribute to this problem. Media investigations have found that insurers are becoming increasingly adept in using technology to deny payment of medical claims and pressure their company physicians to deny care during prior authorization reviews. Doctors also report spending increasing amounts of time on the phone with insurance company physicians over denials of care for their patients.
 
In this brief, we report findings from a Commonwealth Fund survey on the extent to which working-age adults say their insurance provider charged for a health service they thought should have been free or covered or denied coverage for care recommended by their doctors. We examined whether people challenged such errors or coverage denials, the reasons why they didn’t, and the implications for their health and well-being. People were grouped by the coverage source they reported at the time of the survey, such as employer or individual market or marketplace, though it should be noted that some may have switched insurance plans during the year.
 
The survey was conducted by SSRS with a nationally representative sample of 7,873 adults age 19 and older from April 18 through July 31, 2023. Our analysis focuses on the 5,602 working-age respondents — under age 65 — who were insured at the time of the survey. Analysis of billing issues was further limited to the 4,803 individuals who were insured for the entire year (see “How We Conducted This Survey” for more information).
 

Highlights
 

1. Forty-five percent of insured, working-age adults reported receiving a medical bill or being charged a copayment in the past year for a service they thought should have been free or covered by their insurance.
    
2. Less than half of those reporting billing errors said they challenged them. Lack of awareness about their right to challenge a bill was the most common reason, particularly among younger people and those with low income.
    
3. Nearly two of five respondents who challenged their bill said that it was ultimately reduced or eliminated by their insurer.
4. Seventeen percent of respondents said that their insurer denied coverage for care that was recommended by their doctor; more than half said that neither they nor their doctor challenged the denial.
5. Nearly six of 10 adults who experienced a coverage denial said their care was delayed as a result.

Findings
 
More than two of five respondents reported either they or a family member received a bill or were charged a copayment in the past 12 months for a health service they thought was free or covered by their insurance.
 
Plan complexity and the heterogeneity of benefits across plans may leave people unable to identify what is and is not covered, and when a bill is incorrect.5 While the Affordable Care Act (ACA) requires all insurers to cover preventive services like colon cancer screening free of charge, some states and the federal government also require certain plans, such as marketplace plans, to cover additional services either free of charge, like annual checkups, or prior to meeting deductibles. Many employer plans exclude some services and prescription drugs from deductibles.
 
People across all insurance types reported such billing problems, but those covered by employer plans, marketplace or individual market plans, and Medicare reported them at higher rates.
 
Of the respondents who thought they had received a bill in error, fewer than half attempted to challenge the bill. People with marketplace or individual market plans challenged these bills at a rate lower than those covered by Medicaid or Medicare (the difference was not statistically significant). This is despite the ACA’s requirement for insurers to have systems in place for consumers to appeal and challenge their bills. There were no significant differences by…
 
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