What to Do When Your Health Insurer Says 'No'
One in three people get hit with a denial of coverage, but there are smart and effective ways to appeal.
Miranda Yaver is an assistant professor of health policy and management at the University of Pittsburgh and author of Coverage Denied. Here, she speaks with Kiplinger Personal Finance Magazine about why coverage gets denied and what you can do about it.
Kiplinger: Your new book, Coverage Denied, shines a light on health insurance claims denials. How common is this issue, and what led you to tackle it?
Yaver: When I was starting out with new health insurance as a research fellow after getting my doctorate, many of my routine claims for diagnostic tests and prescription drugs were denied. I was overwhelmed navigating the problem, getting rerouted from person to person with my insurer. I thought, I'm a PhD with the job flexibility to be on hold at two o'clock on a Tuesday. If I'm struggling, what about everyone else?
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I started researching and found there were few academic studies on denials. So in 2022, I conducted my own survey of 1,340 Americans with different types of healthcare coverage. Overall, 36% had encountered at least one coverage denial, and nearly 60% of those respondents reported multiple denials.
What are typical reasons coverage is denied?
Reasons often include lack of medical necessity, prescribed care being experimental and billing code errors. Not having the required prior authorization is also being used more widely. These denials put a huge burden on patients and healthcare providers, who then have to advocate to get treatment covered. The result is a rationing of care by administrative inconvenience because the process can be overwhelming, and many people just give up.
Why has prior authorization become so frequent?
Health insurers design prior-authorization policies to contain costs and limit unnecessary treatment. Yet it's far from clear that requiring preapproval helps lower costs or improve care. Meanwhile, many patients have necessary care delayed or denied. Sometimes the reviewing physicians lack the specialty expertise to make correct assessments. One patient I interviewed who was seeking approval for a procedure to improve a rare hearing issue was denied by a gynecologist.
There has been a backlash against prior authorization. Any chance insurers will scale it back?
The backlash is coming from both physicians and patients. After all, physicians have to spend time and hire staff to get approvals and fight denials. It has had an impact. UnitedHealthcare announced in May that it will drop prior authorization for 30% of procedures by the end of 2026. Other insurers will likely feel pressure to follow suit.
Insurers are increasingly using artificial intelligence to process claims. What impact will that have?
There may be some efficiency gains. But AI can create errors and fail to understand the full context of a patient's needs, and when it's your healthcare at stake, mistakes can be devastating. Also, there's little regulatory oversight. In January, the federal government launched a pilot project that uses AI to review some claims in traditional Medicare plans. We'll see how it plays out, but the technology is not there yet, in my opinion.
What advice can you give to help people fight a claims denial?
Surveys show as few as 1% appeal. But there's a decent success rate for those who do. In my survey, 52% of respondents who appealed a claims denial won. Another survey, from 2024, found that 80.7% of people in Medicare Advantage plans who appealed a prior-authorization denial were fully or partially successful.
The first step is for your doctor to appeal the decision directly with the insurer. If that's rejected, you need to start a formal appeal. Review the denial letter, looking for the specific grounds for the rejection, the appeal instructions and the deadlines. Detail the reasons why the denial was incorrect, such as changes to your health or new medical studies. As a last-ditch effort, you may be able to appeal to an external reviewer.
You can also contact your state health insurance department for help. The Washington State Department of Insurance, for example, offers tips on appeals, and letter templates; go to insurance.wa.gov and search “health insurance appeal.” An appeal takes work, but it may help you get the coverage you need.
Note: This item first appeared in Kiplinger Personal Finance Magazine, a monthly, trustworthy source of advice and guidance. Subscribe to help you make more money and keep more of the money you make here.
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