Category Archives: Health Insurance Denial

The Medicare Advantage Trap: What They Don’t Tell You

Posted on by • Posted in Citizens United, Health Insurance Denial, Health Insurance Industry, Health Policy, Healthcare Reform, Lobbyist, Medicare, Medicare Advantage, Profit, Profit Motive • Leave a comment
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You have three days left, if you got suckered in by those omnipresent ads for Medicare Advantage and left regular Medicare for the siren song of cheaper coverage, “free” vision, hearing, or dental, or even “free” money to buy groceries or rides to the doc.

The open enrollment period for real Medicare closes at the end of the day Saturday, December 7th; after that, you’re locked into the Medicare Advantage plan you may have bought until next year.

If you’ve had Medicare Advantage for a year or more, however, the open enrollment period is still “open” until December 7th, but you will want to make sure you can get a “Medigap” plan that fills in the 20% that real Medicare doesn’t cover.

Companies are required to write a Medigap policy for you at a reasonable price when you turn 65, no matter how sick you are or what preexisting conditions you may have, but if you’ve been “off Medicare” by being on Medicare Advantage for more than a year, they don’t have to write you a policy, so double-check that and sign up for a Medigap policy before making the switch back to real Medicare.

So, what’s this all about and why is it so complicated?

When George W. Bush and congressional Republicans (and a handful of bought-off Democrats) created Medicare Advantage in 2003, it was the fulfillment of half of Bush’s goal of privatizing Social Security and Medicare, dating all the way back to his unsuccessful run for Congress in 1978 and a main theme of his second term in office.

Medicare Advantage is not Medicare.

These plans are private health insurance provided by private corporations, who are then reimbursed at a fixed rate by the Medicare trust fund regardless of how much their customers use their insurance. Thus, the more they can screw their customers and us taxpayers by withholding healthcare payments, the more money they make.

With real Medicare,

if your doctor says you need a test, procedure, scan, or any other medical intervention you simply get it done and real Medicare pays the bill. No muss, no fuss, no permission needed. Real Medicare always pays, and if they think something’s not kosher, they follow up after the payment’s been made so as not to slow down the delivery of your healthcare.

With Medicare Advantage,

however, you’re subject to “pre-clearance,” meaning that the insurance company inserts itself between you and your doctor: You can’t get the medical help you need until or unless the insurance company pre-clears you for payment.

These companies thus make much of their billions in profit by routinely denying claims — 1.5 million, or 18 percent of all claims, were turned down in one year alone — leaving Advantage policy holders with the horrible choice of not getting the tests or procedures they need or paying for them out-of-pocket.

Given this, you’d think that most people would stay as far away from these private Medicare Advantage plans as they could. But Congress also authorized these plans to compete unfairly with real Medicare by offering things real Medicare can’t (yet). These include free or discounted dental, hearing, eyeglasses, gym memberships, groceries, rides to the doctor, and even cash rebates.

You and I pay for those freebies, but that’s only half of the horror story.

This year, as Matthew Cunningham-Cook pointed out in Wendell Potter’s brilliant Health Care un-covered Substack newsletter, we’re ponying up an additional $64 billion to give to these private insurance companies to “reimburse” them for the freebies they relentlessly advertise on television, online, and in print.

And here’s the most obscene part of the whole thing: the companies won’t tell the government (us!) how much of that $64 billion they’ve actually spent. They just take the money and say, “Thank you very much.” And then, presumably, throw a few extra million into the pockets of each of their already obscenely-well-paid senior executives.

For example, the former CEO of the nation’s largest Medicare Advantage provider, UnitedHealth, walked away with over a billion dollars in total compensation. With a “B.” One guy. His successor made off with over a half-billion dollars in pay and stock.

Good work if you can get it: all you need do is buy off a hundred or so members of Congress, courtesy of Clarence Thomas’ billionaire-funded tie-breaking vote on Citizens United, and threaten the rest of Congress with massive advertising campaigns for their opponents if they try to stop you.

And while the companies refuse to tell us how much of the $64 billion that we’re throwing at them this year to offer “free” dental, etc. is actually used, what we do know is that most of that money is not going to pay for the freebies they advertise. As Cunningham-Cook noted, in one study only 11 percent of Advantage policyholders who’d signed up with plans offering dental care used that benefit.

Another study showed over-the-counter-drug freebies were used only a third of the time, leaving $5 billion in the insurance companies money bins just for that “reimbursable” goodie. A later study found that at least a quarter of all Advantage policyholders failed to use any of the freebies they’d been offered when they signed up.

That’s an enormous amount of what the industry calls “breakage”; benefits offered and paid for by the government but not used. Billions of dollars left over every month. And, used or not, you and I sure paid for them.

In my book The Hidden History of American Healthcare: Why Sickness Bankrupts You and Makes Others Insanely Rich, I lay out the story of this scam and how badly so many American seniors — and all American taxpayers, regardless of age — get ripped off by it.

And now it looks like things are about to get a whole lot worse.

When he was president last time, Donald Trump substantially expanded Medicare Advantage, calling real Medicare “socialism.” Project 2025 and candidate Trump both promised to end real Medicare “immediately” if Trump was re-elected; at the very least, they’ll make Medicare Advantage the “default” program people are steered into when they turn 65 and sign up for Medicare.

These giant insurance companies ripped off us taxpayers last year to the tune of an estimated $140 billion over and above what it would’ve cost us if people had simply been on real Medicare, according to a report from Physicians for a National Health Program (PNHP).

If there was no Medicare Advantage scam bleeding off all that cash to pay for executives’ private jets, real Medicare could be expanded to cover dental, vision, and hearing and even end the need for Medigap plans.

But for now, the privatization gravy train continues to roll along. The insurance giants use some of that money to buy legislators, and some of it for expensive advertising to dupe seniors into joining their programs. The company (Benefytt) that hired Joe Namath to pitch Medicare Advantage, for example, was recently hit with huge fines by the Federal Trade Commission for deceptive advertising.

The FTC news release laid it out:

“Benefytt pocketed millions selling sham insurance to seniors and other consumers looking for health coverage,” said Samuel Levine, Director of the FTC’s Bureau of Consumer Protection. “The company is being ordered to pay $100 million, and we’re holding its executives accountable for this fraud.”

And what was it that the Federal Trade Commission called “sham insurance”? Medicare Advantage. Nonetheless, the Centers for Medicare Services continues to let Benefytt and Namath market these products: welcome to the power of organized money.

And it’s huge organized money. Medicare Advantage plans are massive cash cows for the companies that run them. As Cigna prepares for a merger, for example, they’re being forced to sell off their Medicare Advantage division: it’s scheduled to go for $3.7 billion. Nobody pays that kind of money unless they expect enormous returns.

And how do they make those billions?

Most Medicare Advantage companies regularly do everything they can to intimidate you into paying yourself out-of-pocket. Often, they simply refuse payment and wait for you to file a complaint against them; for people seriously ill the cumbersome “appeals” process is often more than they can handle so they just write a check, pull out a credit card, or end up deeply in debt in their golden years.

As a result, hospitals and doctor groups across the nation are beginning to refuse to take Medicare Advantage patients. And in rural areas many hospitals are simply going out of business because Medicare advantage providers refuse to pay their bills.

California-based Scripps Health, for example, cares for around 30,000 people on Medicare Advantage and recently notified all of them that Scripps will no longer offer medical services to them unless they pay out-of-pocket or revert back to real Medicare.

They made this decision because over $75 million worth of services and procedures their physicians had recommended to their patients were turned down by Medicare Advantage insurance companies. In many cases, Scripps had already provided the care and is now stuck with the bills that the Advantage companies refuse to pay.

Scripps CEO Chris Van Gorder told MedPage Today:

“We are a patient care organization and not a patient denial organization and, in many ways, the model of managed care has always been about denying or delaying care – at least economically. That is why denials, [prior] authorizations and administrative processes have become a very big issue for physicians and hospitals…”

Similarly, the Mayo Clinic has warned its customers in Florida and Arizona that they won’t accept Medicare Advantage any more, either. Increasing numbers of physician groups and hospitals are simply over being ripped off by Advantage insurance companies.

Traditional Medicare has been serving Americans well since 1965: it’s one of the most efficient single-payer systems to fund healthcare that’s ever been devised. But nobody was making a buck off it, so nobody could share those profits with greedy politicians. Enter Medicare Advantage, courtesy of George W. Bush and the GOP.

While several bills have been offered in Congress to do something about this — including Mark Pocan’s and Ro Khanna’s Save Medicare Act that would end these companies’ ability to use the word “Medicare” in their policy names and advertising — the amounts of money sloshing around DC in the healthcare space now are almost unfathomable.

So far this year, according to opensecrets.org, the insurance industry has spent $117,305,895 showering gifts and persuasion on our federal lawmakers to keep their obscene profits flowing.

It’s all one more example of how five corrupt Republicans on the US Supreme Court legalizing political bribery with Citizens United have screwed average Americans and made a handful of industry executives and investors fabulously rich.

They get away with it because when people choose to sign up for Medicare Advantage at 65 (or convert to these plans in their 60s or early 70s) they’re typically not sick — and thus cost the insurance companies little.

Tragically, the people signing up for these plans have no idea all the hassles, hoops, and troubles they might have to jump through when they do get sick, have an accident, or otherwise need medical assistance.

And since the last three years of life are typically the most expensive years for healthcare, the insurance denials are more likely to happen then — long after the person’s signed up with the Advantage company and it’s too late to go back to real Medicare.

This is why it typically takes a few years for people to figure out how badly they got screwed by not going with regular Medicare but instead putting themselves in the hands of private insurance companies.

The New York Times did an exposé of the problem in an article titled “Medicare Advantage Plans Often Deny Needed Care, Federal Report Finds.” It tells the story of “Kurt Pauker, an 87-year-old Holocaust survivor in Indianapolis” who’d bought an Advantage policy from Humana:

“In spite of recommendations from Mr. Pauker’s doctors, his family said, Humana has repeatedly denied authorization for inpatient rehabilitation after hospitalization, saying at times he was too healthy and at times too ill to benefit.”

This is not at all uncommon, the Times notes:

“Tens of millions of denials are issued each year for both authorization and reimbursements, and audits of the private insurers show evidence of ‘widespread and persistent problems related to inappropriate denials of services and payment,’ the investigators found.”

If you have “real” Medicare with a heavily regulated Medigap policy to cover the 20% Medicare doesn’t, you never have to worry.

Your bills get paid, you can use any doctor or hospital in the country who takes Medicare, and neither Medicare nor your Medigap provider will ever try to collect from you or force you to pay for what you thought was covered.

Neither you or your doctor will ever have to do the “pre-authorization” dance with real Medicare: those terrible experiences dealing with for-profit insurance companies are part of the past.

But if you have Medicare Advantage — which is not Medicare, but private health insurance — you’re on your own.

As the Times laid out:

“About 18 percent of [Advantage] payments were denied despite meeting Medicare coverage rules, an estimated 1.5 million payments for all of 2019. In some cases, plans ignored prior authorizations or other documentation necessary to support the payment. These denials may delay or even prevent a Medicare Advantage beneficiary from getting needed care…”

Buying a Medicare Advantage policy is a leap in the dark, and the federal government is not there to catch you. And it’s all perfectly legal, thanks to Bush’s 2003 law, so your state insurance commissioner usually can’t or won’t help.

Thus, here we are, handing billions of dollars a month to insurance industry executives so they can buy new Swiss chalets, private jets, and luxury yachts. And so they can compete — unfairly — with Medicare itself, driving LBJ’s most proud achievement into debt and crisis.

Enough is enough. Let your members of Congress know it’s beyond time to fix the Court and Medicare, so scams like Medicare Advantage can no longer rip off America’s seniors while making industry executives richer than Midas.

And if you got hooked into switching out of real Medicare and now find yourself in a Medicare Advantage plan, you have three days to back out and return to real Medicare. For more information, you can also contact the nonprofit and real-Medicare-supporting Medicare Rights Center at 800-333-4114.

The Two Events that Changed U.S. Healthcare for Everyone

Posted on by • Posted in ACA, Affordability, Board, Health Insurance Coverage Adequacy, Health Insurance Denial, Health Insurance Industry, Health Policy, Health System, Healthcare Reform, Hospital, Hospital Industry, Medicaid, Medicare, Price Transparency, Private Equity, Profit, Profit Motive, Skinny Health Plans, Underinsured, Uninsured • Leave a comment
The Two Events that Changed U.S. Healthcare for Everyone

In late 2025, two events reset the U.S. health system’s future at least through 2026 and possibly beyond:

  • November 5, 2024: The Election: Its post-mortem by pollsters and pundits reflects a country divided and unsettled: 22 Red States, 7 Swing States and 21 Blue States. But a solid majority who thought the country was heading in the wrong direction and their financial insecurity driving voters to return the 45th President to the White House. With slim majorities in the House and Senate, and a short-leash before mid-term elections November 3, 2026, the Trump team has thrown out ‘convention’ in their setting policies and priorities for their second term. That includes healthcare.
  • December 4, 2024: The Murder of a Health Executive : The murder of Brian Thompson, United Healthcare CEO, sparked hostility toward health insurers and a widespread backlash against the corporatization of the U.S. health system. While UHG took the most direct hit for its aggressiveness in managing access and coverage disputes, social media and mainstream journalists exposed what pollsters affirmed—the majority of American’s distrust the health system, believing it puts its profits above their needs. And their polls indicate animosity is highest among young adults, in lower income households and among members of its own workforce.

These events provide the backdrop for what to expect this year and next. Four directional shifts seem to underly actions to date and announced plans:

  • From elitism to populism: Key personnel and policy changes will draw less from Ivy League credentials, DC connections and recycled federal health agency notables and more from private sector experience, known disruptors and unconventional thought leaders. Notably, the new Chairs of the 7 Congressional Committees that control healthcare regulation, funding and policy changes in the 119th Congress represent LA, AL, WV, ID, VA, MO & KY constituents—hardly Ivy League territory.
  • From workforce disparities to workforce modernization: The Departments of Health & Human Services, Labor, Commerce and Treasury will attempt to suspend/modify regulatory mandates and entities they deem derived from woke ideology. The Trump team will replace them with policies that enable workforce de-regulation and modernization in the private sector. Hiring quotas, non-compete contracts, DEI et al will get a fresh look in the context of technology-enabled workplaces and supply-demand constraints. The HR function in every organization will become ground zero for Trump Healthcare 2.0 system transformation.
  • From western medicine to whole person wellbeing: HHS Secretary Nominee Robert F. Kennedy Jr. (RFK) Jr.’s “Make America Healthy Again” pledges war on ultra-processed foods. CMS’ designee Mehmet Oz advocates for vitamins, supplements and managed care. FDA nominee Marty Makary, a Hopkins surgeon, is a RFKJ ally in the “Health Freedom” movement promoting suspicion about ‘mainstream medicine’ and raising doubts about vaccination efficacy for children and low-risk adults. NIH nominee Jay Bhattacharya, director of Stanford’s Center for Demography and Economics of Health and Aging, opposed Covid-19 lockdowns and is critical of vaccine policies. Collectively, this four-some will challenge conventional western (allopathic) medicine and add wide-range of non-traditional interventions that are a safe and cost-effective to the treatment arsenal for providers and consumers. The food supply will be a major focus: HHS will work closely with the USDA (nominee Brooke Rollins, currently CEO of the America First Policy Institute, to reduce the food chain’s dependence on ultra-processed foods in public health.
  • From DC dominated health policies to states: The 2022 Supreme Court’ Dobbs decision opened the door for states to play the lead role in setting policies for access to abortion for their female citizens. It follows federalism’s Constitutional preference that Washington DC’s powers over states be enumerated and limited. Thus, state provisions about healthcare services for its citizens will expand beyond their already formidable scope. Likely actions in some states will include revised terms and conditions that facilitate consolidation, allowance for physician owned hospitals and site-neutral payments, approval of “skinny” individual insurance policies that do not conform to the Affordable Care Act’s qualified health plan spec’s, expanded scope of practice for nurse practitioners, drug price controls and many others. At least for the immediate future, state legislatures will be the epicenters for major policy changes impacting healthcare organizations; federal changes outside appropriations activity are unlikely.

Transforming the U.S. health system is a bodacious ambition for the incoming Trump team. Early wins will be key—like expanding price transparency in every healthcare sector, softening restrictions on private equity investments, targeted cuts in Medicaid and Medicare funding and annulment of the Inflation Reduction Act. In tandem, it has promised to cut Federal government spending by $2 trillion and lower prices on everything including housing and healthcare—the two spending categories of highest concern to the working class. Healthcare will figure prominently in Team Trump’s agenda for 2025 and posturing for its 2026 mid-term campaign. And equally important, healthcare costs also figure prominently in quarterly earnings reports for companies that provide employee health benefits forecast to be 8% higher this year following a 7% spike the year prior. Last year’s 23% S&P growth is not expected to repeat this year raising shareholder anxiety and the economy’s long-term resilience and the large roles housing and healthcare play in its performance.

My take:

The 2024 election has been called a change election. That’s unwelcome news to most organizations in healthcare, especially the hospitals, physicians, post-acute providers and others who provide care to patients and operate at the bottom of the healthcare pyramid.

Equipping a healthcare organization to thoughtfully prepare for changes amidst growing uncertainty requires extraordinary time and attention by management teams and their Boards. There are no shortcuts. Before handicapping future state scenario possibilities, contingencies and resource requirements, a helpful starting point is this: On the four most pressing issues facing every U.S. healthcare company/organization today, Boards and Management should discuss…

  • Trust: On what basis can statements about our performance be verified? Is the data upon which our trust is based readily accessible? Does the organization’s workforce have more or less trust than outside stakeholders? What actions are necessary to strengthen/restore trust?
  • Purpose: Which stakeholder group is our organization’s highest priority? What values & behaviors define exceptional leadership in our organization? How are they reflected in their compensation?
  • Affordability: How do we measure and monitor the affordability of our services to the consumers and households we ultimately depend? How directly is our organization’s alignment of reducing cost reduction and pass-through savings to consumers? Is affordability a serious concern in our organization (or just a slogan)?
  • Scale: How large must we be to operate at the highest efficiency? How big must we become to achieve our long-term business goals?

This week, thousands of healthcare’s operators will be in San Francisco (JPM Healthcare Conference), Naples (TGI Leadership Conference) and in Las Vegas (Consumer Electronics Show) as healthcare begins a new year. No one knows for sure what’s ahead or who the winners and losers will be.  What’s for sure is that healthcare will be in the spotlight and its future will not be a cut and paste of its past.

PS: The parallels between radical changes facing the health system and other industries is uncanny. College athletics is no exception. As you enjoy the College Football Final Four this weekend, consider its immediate past—since 2021, the impact of Name, Image and Likeness (NIL) monies on college athletics, and its immediate future–pending regulation that will codify permanent revenue sharing arrangements (to be implemented 2026-2030) between college athletes, their institutions and sponsors. What happened to the notion of student athlete and value of higher education? Has the notion of “not-for-profit” healthcare met a similar fate? Or is it all just business?

The Two Events that Changed U.S. Healthcare for Everyone

Posted on by • Posted in ACA, Affordability, Board, Health Insurance Coverage Adequacy, Health Insurance Denial, Health Insurance Industry, Health Policy, Healthcare Reform, Medicaid, Medicare, Price Transparency, Private Equity, Profit, Profit Motive • Leave a comment
The Two Events that Changed U.S. Healthcare for Everyone

In late 2025, two events reset the U.S. health system’s future at least through 2026 and possibly beyond:

  • November 5, 2024: The Election: Its post-mortem by pollsters and pundits reflects a country divided and unsettled: 22 Red States, 7 Swing States and 21 Blue States. But a solid majority who thought the country was heading in the wrong direction and their financial insecurity driving voters to return the 45th President to the White House. With slim majorities in the House and Senate, and a short-leash before mid-term elections November 3, 2026, the Trump team has thrown out ‘convention’ in their setting policies and priorities for their second term. That includes healthcare.
  • December 4, 2024: The Murder of a Health Executive : The murder of Brian Thompson, United Healthcare CEO, sparked hostility toward health insurers and a widespread backlash against the corporatization of the U.S. health system. While UHG took the most direct hit for its aggressiveness in managing access and coverage disputes, social media and mainstream journalists exposed what pollsters affirmed—the majority of American’s distrust the health system, believing it puts its profits above their needs. And their polls indicate animosity is highest among young adults, in lower income households and among members of its own workforce.

These events provide the backdrop for what to expect this year and next. Four directional shifts seem to underly actions to date and announced plans:

  • From elitism to populism: Key personnel and policy changes will draw less from Ivy League credentials, DC connections and recycled federal health agency notables and more from private sector experience, known disruptors and unconventional thought leaders. Notably, the new Chairs of the 7 Congressional Committees that control healthcare regulation, funding and policy changes in the 119th Congress represent LA, AL, WV, ID, VA, MO & KY constituents—hardly Ivy League territory.
  • From workforce disparities to workforce modernization: The Departments of Health & Human Services, Labor, Commerce and Treasury will attempt to suspend/modify regulatory mandates and entities they deem derived from woke ideology. The Trump team will replace them with policies that enable workforce de-regulation and modernization in the private sector. Hiring quotas, non-compete contracts, DEI et al will get a fresh look in the context of technology-enabled workplaces and supply-demand constraints. The HR function in every organization will become ground zero for Trump Healthcare 2.0 system transformation.
  • From western medicine to whole person wellbeing: HHS Secretary Nominee Robert F. Kennedy Jr. (RFK) Jr.’s “Make America Healthy Again” pledges war on ultra-processed foods. CMS’ designee Mehmet Oz advocates for vitamins, supplements and managed care. FDA nominee Marty Makary, a Hopkins surgeon, is a RFKJ ally in the “Health Freedom” movement promoting suspicion about ‘mainstream medicine’ and raising doubts about vaccination efficacy for children and low-risk adults. NIH nominee Jay Bhattacharya, director of Stanford’s Center for Demography and Economics of Health and Aging, opposed Covid-19 lockdowns and is critical of vaccine policies. Collectively, this four-some will challenge conventional western (allopathic) medicine and add wide-range of non-traditional interventions that are a safe and cost-effective to the treatment arsenal for providers and consumers. The food supply will be a major focus: HHS will work closely with the USDA (nominee Brooke Rollins, currently CEO of the America First Policy Institute, to reduce the food chain’s dependence on ultra-processed foods in public health.
  • From DC dominated health policies to states: The 2022 Supreme Court’ Dobbs decision opened the door for states to play the lead role in setting policies for access to abortion for their female citizens. It follows federalism’s Constitutional preference that Washington DC’s powers over states be enumerated and limited. Thus, state provisions about healthcare services for its citizens will expand beyond their already formidable scope. Likely actions in some states will include revised terms and conditions that facilitate consolidation, allowance for physician owned hospitals and site-neutral payments, approval of “skinny” individual insurance policies that do not conform to the Affordable Care Act’s qualified health plan spec’s, expanded scope of practice for nurse practitioners, drug price controls and many others. At least for the immediate future, state legislatures will be the epicenters for major policy changes impacting healthcare organizations; federal changes outside appropriations activity are unlikely.

Transforming the U.S. health system is a bodacious ambition for the incoming Trump team. Early wins will be key—like expanding price transparency in every healthcare sector, softening restrictions on private equity investments, targeted cuts in Medicaid and Medicare funding and annulment of the Inflation Reduction Act. In tandem, it has promised to cut Federal government spending by $2 trillion and lower prices on everything including housing and healthcare—the two spending categories of highest concern to the working class. Healthcare will figure prominently in Team Trump’s agenda for 2025 and posturing for its 2026 mid-term campaign. And equally important, healthcare costs also figure prominently in quarterly earnings reports for companies that provide employee health benefits forecast to be 8% higher this year following a 7% spike the year prior. Last year’s 23% S&P growth is not expected to repeat this year raising shareholder anxiety and the economy’s long-term resilience and the large roles housing and healthcare play in its performance.

My take:

The 2024 election has been called a change election. That’s unwelcome news to most organizations in healthcare, especially the hospitals, physicians, post-acute providers and others who provide care to patients and operate at the bottom of the healthcare pyramid.

Equipping a healthcare organization to thoughtfully prepare for changes amidst growing uncertainty requires extraordinary time and attention by management teams and their Boards. There are no shortcuts. Before handicapping future state scenario possibilities, contingencies and resource requirements, a helpful starting point is this: On the four most pressing issues facing every U.S. healthcare company/organization today, Boards and Management should discuss…

  • Trust: On what basis can statements about our performance be verified? Is the data upon which our trust is based readily accessible? Does the organization’s workforce have more or less trust than outside stakeholders? What actions are necessary to strengthen/restore trust?
  • Purpose: Which stakeholder group is our organization’s highest priority? What values & behaviors define exceptional leadership in our organization? How are they reflected in their compensation?
  • Affordability: How do we measure and monitor the affordability of our services to the consumers and households we ultimately depend? How directly is our organization’s alignment of reducing cost reduction and pass-through savings to consumers? Is affordability a serious concern in our organization (or just a slogan)?
  • Scale: How large must we be to operate at the highest efficiency? How big must we become to achieve our long-term business goals?

This week, thousands of healthcare’s operators will be in San Francisco (JPM Healthcare Conference), Naples (TGI Leadership Conference) and in Las Vegas (Consumer Electronics Show) as healthcare begins a new year. No one knows for sure what’s ahead or who the winners and losers will be.  What’s for sure is that healthcare will be in the spotlight and its future will not be a cut and paste of its past.

PS: The parallels between radical changes facing the health system and other industries is uncanny. College athletics is no exception. As you enjoy the College Football Final Four this weekend, consider its immediate past—since 2021, the impact of Name, Image and Likeness (NIL) monies on college athletics, and its immediate future–pending regulation that will codify permanent revenue sharing arrangements (to be implemented 2026-2030) between college athletes, their institutions and sponsors. What happened to the notion of student athlete and value of higher education? Has the notion of “not-for-profit” healthcare met a similar fate? Or is it all just business?

BIG INSURANCE 2022: Revenues reached $1.25 trillion thanks to sucking billions out of the pharmacy supply chain – and taxpayers’ pockets

Posted on by • Posted in ACA, Affordability, Antitrust, Competition, Health Insurance Coverage Adequacy, Health Insurance Denial, Health Insurance Industry, Health Policy, Healthcare Reform, Medicaid, Medicare, Medicare Advantage, Monopoly, Monopoly Behavior, Out of Pocket Expenses, Out-of-Network, Pharmaceutical Costs, Pharmaceutical Industry, Pharmacy Benefits Management, Prior Authorization, Privatization, Profit, Profit Motive • Leave a comment
https://healthcareuncovered.substack.com/p/big-insurance-2022-revenues-reached?utm_source=substack&utm_campaign=post_embed&utm_medium=web

HIGHLIGHTS

  • Big Insurance revenues and profits have increased by 300% and 287% respectively since 2012 due to explosive growth in the companies’ pharmacy benefit management (PBM) businesses and the Medicare replacement plans they call Medicare Advantage.
  • The for-profits now control more than 80% of the national PBM market and more than 70% of the Medicare Advantage market. 

In 2022, Big Insurance revenues reached $1.25 trillion and profits soared to $69.3 billion.

That’s a 300% increase in revenue and a 287% increase in profits from 2012, when revenue was $412.9 billion and profits were $24 billion.

Big insurers’ revenues have grown dramatically over the past decade, the result of consolidation in the PBM business and taxpayer-supported Medicare and Medicaid programs. 

Sucking billions out of the pharmacy supply chain – and taxpayers’ pockets

What has changed dramatically over the decade is that the big insurers are now getting far more of their revenues from the pharmaceutical supply chain and from taxpayers as they have moved aggressively into government programs. This is especially true of Humana, Centene, and Molina, which now get, respectively, 85%, 88%, and 94% of their health-plan revenues from government programs. 

The two biggest drivers are their fast-growing pharmacy benefit managers (PBMs), the relatively new and little-known middleman between patients and pharmaceutical drug manufacturers, and the privately owned and operated Medicare replacement plans they market as Medicare Advantage.

With the exception of Humana, Centene, and Molina, most of the companies that constitute Big Insurance continue to make substantial amounts of money selling policies and services in what they refer to as their commercial businesses – to individuals, families, and employers – but the seven companies’ commercial revenue grew just 260%, or $176 billion, over 10 years (from $110.4 billion to $287.1 billion). While that’s significant, profitable growth in the commercial sector has become a major challenge for big insurers – so much so that Humana just last week announced it is exiting the employer-sponsored health-insurance marketplace entirely. 

The insurers’ commercial businesses have stagnated because small businesses – which employ nearly half of the nation’s workers – are increasingly being priced out of the health insurance market. Most small businesses can no longer afford the premiums. The average premium for an employer-sponsored family plan – not including out-of-pocket requirements – was $22,463 in 2022, up 43% since 2012, which has contributed to the decades-long decline in the percentage of U.S. employers offering coverage to their workers.

The percentage of U.S. employers providing some level of health benefits to their workers dropped from 69% to 51% between 1999 and 2022 – including a dramatic 8% decrease last year alone. Growth in this category is largely the result of insurers “stealing market share” from each other or from smaller competitors.

As a consequence of this segment’s relative stagnation, PBMs and government programs have become the new cash cows for Big Insurance.

Spectacular PBM Growth

PBM HIGHLIGHTS

  • Cigna now gets far more revenue from its PBM than from its health plans. CVS gets more revenue from its PBM than from either Aetna’s health plans or its nearly 10,000 retail stores. 
  • UnitedHealth has the biggest share of both the PBM and Medicare markets and, through numerous acquisitions of physician practices, is now the largest U.S. employer of doctors.

PBMs are middlemen companies that manage prescription drug benefits for health insurers, Medicare Part D drug plans, employers, and, in some cases, unions. As the Commonwealth Fund has noted: 

PBMs have a significant behind-the-scenes impact in determining total drug costs for insurers, shaping patients’ access to medications, and determining how much pharmacies are paid. 

The Commonwealth Fund went on to say that PBMs have faced growing scrutiny about their role in rising prescription drug costs and spending. A big reason for the scrutiny – by Congress, state lawmakers and now also by the FTC – is that the biggest PBMs are now owned by Big Insurance.

Through mergers and acquisitions in recent years, three of the seven for-profit insurers – Cigna, CVS/Aetna, and UnitedHealth – now control 80% of the U.S. pharmacy benefits market.

They determine which drugs will be listed in each of their formularies (lists of drugs they will “cover” based on secret deals they negotiate with pharmaceutical companies) and how much patients will have to pay out of their own pockets at the pharmacy counter – in many cases hundreds or thousands of dollars – before their coverage kicks in. The PBMs also “steer” health-plan enrollees to their preferred or owned pharmacies (and, increasingly, away from independent pharmacists), thereby capturing even more of what we spend on our prescription medications.

Cigna, CVS/Aetna, and UnitedHealth now control 80% of the U.S. PBM market. Correction: this graph was initially published with inaccurate numbers. The source for this information can be found here.

Ten years ago, PBMs contributed relatively little to the three companies’ revenues and profits. But since then, the rapid growth of PBMs has transformed all of the companies. The combined revenues from their PBM business units increased 250% between 2012 and 2022, from $196.7 billion to $492.4 billion.

Changes in PBM revenues between 2012 and 2022 for UnitedHealth Group, Cigna, and CVS/Aetna (Editor’s note: Cigna acquired PBM Express Scripts in 2018. To reflect revenue growth, Express Scripts’ pre-acquisition 2012 revenues are included in the Cigna total for that year.)

PBM Profit Generation

The PBM profit growth at the three companies over the past decade was even more dramatic than revenue growth. Collectively, their PBM profits increased 438%, from $6.3 billion in 2012 to $27.6 billion in 2022.

As a result of this fast growth, more than half (52%) of three companies’ profits in 2022 came from their PBM business units: Cigna’s Evernorth, CVS/Aetna’s Caremark, and UnitedHealth’s Optum. Cigna now gets far more revenue and profits from its PBM than from its health plans. And CVS gets more revenue from its PBM than from either Aetna’s health plans or its nearly 10,000 retail stores. (The companies’ business units that include their PBMs have also moved aggressively in recent years into health-care delivery through acquisitions of physician practices, clinics, dialysis centers, and other facilities. Notably, UnitedHealth Group is now the largest U.S. employer of physicians.)

Huge strides in privatizing both Medicare and Medicaid

GOVERNMENT PROGRAMS HIGHLIGHTS

  • More than 90% of health-plan revenues at three of the companies come from government programs as they continue to privatize both Medicare and Medicaid, through Medicare Advantage in particular.
  • Enrollment in government-funded programs increased by 261% in 10 years; by contrast commercial enrollment increased by just 10% over the past decade.
  • Commercial enrollment actually declined at both UnitedHealth and Humana.
  • 85% of Humana’s health-plan members are in government-funded programs; at Centene, it is 88%, and at Molina, it is 94%. 

The big insurers now manage most states’ Medicaid programs – and make billions of dollars for shareholders doing so – but most of the insurers have found that selling their privately operated Medicare replacement plans is even more financially rewarding for their shareholders.

Revenue growth from government programs has been dramatic over the past 10 years. (Note the numbers do not include revenue from the Medicare Part D program, federal subsidy payments for many ACA marketplace plan enrollees, or Medicare supplement policies.)

This is especially apparent when you see that the Big Seven’s combined revenues from taxpayer-supported programs grew 500%, from $116.3 billion in 2012 to $577 billion in 2022.

These numbers should be of interest to the Biden administration and members of Congress, many of whom are calling for much greater scrutiny of the Medicare Advantage program. Numerous media and government reports have shown that the federal government is overpaying private insurers billions of dollars a year, largely because of loopholes in laws and regulations that enable them to get more taxpayer dollars by claiming their enrollees are sicker than they really are. The companies also make aggressive use of prior authorization, largely unknown in traditional Medicare, to avoid paying for doctor-ordered care and medications.

In addition to their focus on Medicare and Medicaid, the companies also profit from the generous subsidies the government pays insurers to reduce the premiums they charge individuals and families who do not qualify for either Medicare or Medicaid or who work for an employer that does not offer subsidized coverage. But many people enrolled in those types of plans – primarily through the health insurance “marketplaces” established by the Affordable Care Act – cannot afford the deductibles and other out-of-pocket requirements they must pay before their insurers will begin paying their medical claims. 

Dramatic Enrollment Shifts

Changes in health-plan enrollment over the past decade show how dramatic this shift has been. Between 2012 and 2022, enrollment in the companies’ private commercial plans increased by 10%, from 85.1 million in 2012 to 93.8 million in 2022. 

By comparison, growth in enrollment in taxpayer-supported government programs increased 261%, from 27 million in 2012 to 70.4 million in 2022. 

For-profit insurers dominate the Medicare Advantage market. Note that Anthem mentioned above is now known as Elevance. It owns 14 of the country’s Blue Cross Blue Shield plans. 

Within that category, Medicare Advantage enrollment among the Big Seven increased 252%, from 7.8 million in 2012 to 19.7 million in 2022. 

Nationwide, enrollment in Medicare Advantage plans increased to 28.4 million in 2022 (and to 30 million this year). That means that the Big Seven for-profit companies control more than 70% of the Medicare Advantage market. 

UnitedHealth, Humana, Elevance, and CVS/Aetna have captured most of the Medicare Advantage market since the Affordable Care Act was passed in 2010. 

The remaining growth in the government segment occurred in the Medicaid programs that a subset of the Big Seven (UnitedHealth, Elevance, Centene, and Molina in particular) manages for several states.

A few other facts and figures to keep in mind as Big Insurance thrives:

  • In 2023, U.S. families can be on the hook for up to $18,200 in out-of-pocket requirements before their coverage kicks in, up 43% since 2014 when it was $12,700.The Affordable Care Act allows the out-of-pocket maximum to increase annually – 43% since the maximum limit went into effect in 2014.
  • 44% of people in the United States who purchased coverage through the individual market and (ACA) marketplaces were underinsured or functionally uninsured.
  • 46% of those surveyed said they had skipped or delayed care because of the cost.
  • 42% said they had problems paying medical bills or were paying off medical debt.
  • Half (49%) said they would be unable to pay an unexpected medical bill within 30 days, including 68% of adults with low income, 69% of Black adults, and 63% of Latino/Hispanic adults. 
  • In 2021, about $650 million, or about one-third of all funds raised by GoFundMe, went to medical campaigns. That’s not surprising when you realize that in the United States, even people with insurance all too often feel they have no choice but to beg for money from strangers to get the care they or a loved one needs. 
  • 62% of bankruptcies are related to medical costs. 
  • Even as we spend about $4.5 trillion on health care a year, Americans are now dying younger than people in other wealthy countries. Life expectancy in the United States actually decreased by 2.8 years between 2014 and 2021, erasing all gains since 1996, according to the Centers for Disease Control and Prevention. 

BOTTOM LINE: 

The companies that comprise Big Insurance are vastly different from what they were just 10 years ago, but policymakers, regulators, employers, and the media have so far shown scant interest in putting their business practices under the microscope.

Changes in federal law, including the Medicare Modernization Act of 2003, which created the lucrative Medicare Advantage market, and the Affordable Care Act of 2010, which gave insurers the green light to increase out-of-pocket requirements annually and restrict access to care in other ways, opened the Treasury and Medicare Trust Fund to Big Insurance. In addition, regulators have allowed almost all of their proposed acquisitions to go forward, which has created the behemoths they are today.

CVS/Health is now the 4th largest company on the Fortune 500 list of American companies. UnitedHealth Group is now No. 5 – and all the others are climbing toward the top 10. 

When Profits Kill: The Deadly Costs of Treating Healthcare as a Business

Posted on by • Posted in Affordability, Excessive Executive Compensation, Executive Compensation, Health Insurance Coverage Adequacy, Health Insurance Denial, Health Insurance Industry, Health Policy, Healthcare Reform, Medicare, Medicare Advantage, Medicare Denials, Medicare for All, Private Equity, Privatization, Profit, Profit Motive, Public Interest, Public Trust, Single Payer Health System • Leave a comment
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The recent assassination of the CEO of UnitedHealthcare — the health insurance company with, reportedly, the highest rate of claims rejections (and thus dead, wounded, and furious customers and their relations) — gives us a perfect window to understand the stupidity and danger of the Musk/Trump/Ramaswamy strategy of “cutting government” to “make it more efficient, run it like a corporation.”

Consider health care, which in almost every other developed country in the world is legally part of the commons — the infrastructure of the nation, like our roads, public schools, parks, police, military, libraries, and fire departments — owned by the people collectively and run for the sole purpose of meeting a basic human need.

The entire idea of government — dating all the way back to Gilgamesh and before — is to fulfill that singular purpose of meeting citizens’ needs and keeping the nation strong and healthy. That’s a very different mandate from that of a corporation, which is solely directed (some argue by law) to generate profits.

The Veterans’ Administration healthcare system, for example, is essentially socialist rather than capitalist. The VA owns the land and buildings, pays the salaries of everybody from the surgeons to the janitors, and makes most all decisions about care. Its primary purpose — just like that of the healthcare systems of every other democracy in the world — is to keep and make veterans healthy. Its operation is nearly identical to that of Britain’s beloved socialist National Health Service.

UnitedHealthcare similarly owns its own land and buildings, and its officers and employees behave in a way that’s aligned with the company’s primary purpose, but that purpose is to make a profit. Sure, it writes checks for healthcare that’s then delivered to people, but that’s just the way UnitedHealthcare makes money; writing checks and, most importantly, refusing to write checks.

Think about it. If UnitedHealthcare’s main goal was to keep people healthy, they wouldn’t be rejecting 32 percent of claims presented to them. Like the VA, when people needed help they’d make sure they got it.

Instead, they make damn sure their executives get millions of dollars every year (and investors get billions) because making a massive profit ($23 billion last year, and nearly every penny arguably came from saying “no” to somebody’s healthcare needs) is their real business.

On the other hand, if the VA’s goal was to make or save money by “being run efficiently like a company,” they’d be refusing service to a lot more veterans (which it appears is on the horizon).

This is the essential difference between government and business, between meeting human needs (social) and reaching capitalism’s goal (profit).

It’s why its deeply idiotic to say, as Republicans have been doing since the Reagan Revolution, that “government should be run like a business.” That’s nearly as crackbrained a suggestion as saying that fire departments should make a profit (a doltish notion promoted by some Libertarians). Government should be run like a government, and companies should be run like companies.

Given how obvious this is with even a little bit of thought, where did this imbecilic idea that government should run like a business come from?

Turns out, it’s been driven for most of the past century by morbidly rich businessmen (almost entirely men) who don’t want to pay their taxes. As Jeff Tiedrich notes:

“The scariest sentence in the English language is: ‘I’m a billionaire, and I’m here to help.’”

Rightwing billionaires who don’t want to pay their fair share of the costs of society set up think tanks, policy centers, and built media operations to promote their idea that the commons are really there for them to plunder under the rubric of privatization and efficiency.

They’ve had considerable success. Slightly more than half of Medicare is now privatized, multiple Republican-controlled states are in the process of privatizing their public school systems, and the billionaire-funded Project 2025 and the incoming Trump administration have big plans for privatizing other essential government services.

The area where their success is most visible, though, is the American healthcare system. Because the desire of rightwing billionaires not to pay taxes have prevailed ever since Harry Truman first proposed single-payer healthcare like most of the rest of the world has, Americans spend significantly more on healthcare than other developed countries.

In 2022, citizens of the United States spent an estimated $12,742 per person on healthcare, the highest among wealthy nations. This is nearly twice the average of $6,850 per person for other wealthy OECD countries.

Over the next decade, it is estimated that America will spend between $55 and $60 trillion on healthcare if nothing changes and we continue to cut giant corporations in for a large slice of our healthcare money.

On the other hand, Senator Bernie Sanders’ single-payer Medicare For All plan would only cost $32 trillion over the next 10 years. And it would cover everybody in America, every man woman and child, in every medical aspect including vision, dental, psychological, and hearing.

Currently 25 million Americans have no health insurance whatsoever.

If we keep our current system, the difference between it and the savings from a single-payer system will end up in the pockets, in large part, of massive insurance giants and their executives and investors. And as campaign contributions for bought off Republicans. This isn’t rocket science.

And you’d think that giving all those extra billions to companies like UnitedHealthcare would result in America having great health outcomes. But, no.

Despite insanely higher spending, the U.S. has a lower life expectancy at birth, higher rates of chronic diseases, higher rates of avoidable or treatable deaths, and higher maternal and infant mortality rates than any of our peer nations.

Compared to single-payer nations like Canada, the U.S. also has a higher incidence of chronic health conditions, Americans see doctors less often and have fewer hospital stays, and the U.S. has fewer hospital beds and physicians per person.

No other country in the world allows a predatory for-profit industry like this to exist as a primary way of providing healthcare. Every other advanced democracy considers healthcare a right of citizenship, rather than an opportunity for a handful of industry executives to hoard a fortune, buy Swiss chalets, and fly around on private jets.

This is one of the most widely shared graphics on social media over the past few days in posts having to do with Thompson’s murder…

Sure, there are lots of health insurance companies in other developed countries, but instead of offering basic healthcare (which is provided by the government) mostly wealthy people subscribe to them to pay for premium services like private hospital rooms, international air ambulance services, and cosmetic surgery.

Essentially, UnitedHealthcare’s CEO Brian Thompson made decisions that killed Americans for a living, in exchange for $10 million a year. He and his peers in the industry are probably paid as much as they are because there is an actual shortage of people with business training who are willing to oversee decisions that cause or allow others to die in exchange for millions in annual compensation.

That Americans are well aware of this obscenity explains the gleeful response to his murder that’s spread across social media, including the refusal of online sleuths to participate in finding his killer.

It shouldn’t need be said that vigilantism is no way to respond to toxic individuals and companies that cause Americans to die unnecessarily. Hopefully, Thompson’s murder will spark a conversation about the role of government and the commons — and the very real need to end the corrupt privatization of our healthcare system (including the Medicare Advantage scam) that has harmed so many of us and killed or injured so many of the people we love.

https://www.youtube-nocookie.com/embed/DzaxEt4L9II?rel=0&autoplay=0&showinfo=0&enablejsapi=0

In Healthcare, Most think We’re Shrewd and They’re Screwed

Posted on by • Posted in Artificial Intelligence, Excessive Executive Compensation, Executive Compensation, Health Insurance Coverage Adequacy, Health Insurance Denial, Health Insurance Industry, Health Policy, Health System, Healthcare Reform, Hospital, Hospital Industry, Misinformation, Out of Pocket Expenses, Out-of-Network, Price Transparency, Profit, Profit Motive, Public Health Crisis, Public Opinion, Public Oversight, Public Perception, Public Trust, State of the Union, Underinsured • Leave a comment
In Healthcare, Most think We’re Shrewd and They’re Screwed

I never met Brian Thompson. His senseless death is first and foremost a human tragedy.

Second, it’s a business story that continues to unfold. Speculation about the shooter’s motive and whereabouts runs rampant.

But media attention has seized on a larger theme: the business of health insurance and its role in U.S. healthcare. 

Headlines like these illustrate the storyline that has evolved in response to the killing: health insurance is part of a complicated industry where business practices are often geared to corporate profit.

In this coverage and social media postings, health insurer denials are the focal point: journalists and commentators have seized on the use of Artificial intelligence-based tools used by plans like United, Cigna, Aetna and most others to approve/deny claims and Thompson’s role as CEO of UHG’s profitable insurance division.

The bullet-casing etchings “Deny. Defend. Depose” is now a T-shirt whistle to convey a wearer’s contempt for corporate insurers and the profit-seeking apparatus in U.S. healthcare. 

Laid bare in the coverage of Brian’s death is this core belief: the majority of Americans think the U.S. health system is big business and fundamentally flawed.

As noted in last week’s Gallup Poll, and in previous polling by Pew, Harris, Kaiser Family Foundation and Keckley, only one in three Americans believe the health system performs well. Accessibility, costs, price transparency and affordability are dominant complaints. They believe the majority of health insurers, hospitals and prescription drug companies put their financial interests above the public’s health and wellbeing. They accept that the health system is complex and expensive but feel helpless to fix it.

This belief is widely held: its pervasiveness and intensity lend to misinformation and disinformation about the system and its business practices. 

Data about underlying costs and their relationship to prices are opaque and hard to get. Clinical innovation and quality of care are understood in the abstract: self-funded campaigns touting Top 100 recognition, Net Promoter Scores are easier. The business of healthcare financing and delivery is not taught: personal experiences with insurers, hospitals, physicians and drugs are the basis for assessing the system’s effectiveness…and those experiences vary widely based on individual/household income, education, ethnicity and health status.  

The majority accept that operators in every sector of healthcare apply business practices intended to optimize their organization’s finances. Best practices for every insurer, hospital, drug/device manufacturer and medical practice include processes and procedures to maximize revenues, minimize costs and secure capital for growth/innovation. 

But in healthcare, the notion of profit remains problematic: how much is too much? and how an organization compensates its leaders for results beyond short-term revenue/margin improvement are questions of growing concern to a large and growing majority of consumers.

In every sector, key functions like these are especially prone to misinformation, disinformation and public criticism:

  • Among insurers, provider credentialing, coverage allowance and denial management, complaint management and member services, premium pricing and out-of-pocket risks for enrollees, provider reimbursement, prior authorization, provider directory accuracy, the use of AI in plan administration and others.
  • Among hospitals, price setting, employed physician compensation, 340B compliance, price and cost transparency, revenue-cycle management and patient debt collection, workforce performance composition, evaluation and compensation, integration of AI in clinical and administrative decision-making, participation in gainsharing/alternative payment programs, clinical portfolio and others.
  • And across every sector, executive compensation and CEO pay, Board effectiveness, and long-term strategies that balance shareholder interests with broader concern for the greater good.

The bottom line:

The public is paying attention to business practices in healthcare. The death of Brian Thompson opened the floodgate for criticism of health insurers and the U.S. healthcare industry overall. It cannot be ignored. The public thinks industry folks are shrewd operators and they’re inclined to conclude they’re screwed as a result.

Anthem’s reversal

Posted on by • Posted in Health Insurance Coverage Adequacy, Health Insurance Denial, Health Insurance Industry, Health Policy, Healthcare Reform, Medical Loss Ratio (MLR), Out of Pocket Expenses, Profit, Profit Motive, Underinsured • Leave a comment
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A major health insurance company is backing off of a controversial plan to limit coverage of anesthesia, according to public officials.

Why it matters: 

Anthem Blue Cross Blue Shield recently decided to “no longer pay for anesthesia care if the surgery or procedure goes beyond an arbitrary time limit, regardless of how long the surgical procedure takes,” according to the American Society of Anesthesiologists, which opposed the decision.

  • The decision was based on surgery time metrics from federal health data, NPR reported.
  • The policy applied to plans in Connecticut, New York and Missouri.

The latest: 

“After hearing from people across the state about this concerning policy, my office reached out to Anthem, and I’m pleased to share this policy will no longer be going into effect here in Connecticut,” Connecticut Comptroller Sean Scanlon said Thursday on X.

  • Shortly afterward, New York Gov. Kathy Hochul issued a statement saying, “We pushed Anthem to reverse course and today they will be announcing a full reversal of this misguided policy.”

What they’re saying: 

The initial coverage decision was very unusual for a major health insurer, said Marianne Udow-Phillips, who teaches insurance classes at the University of Michigan School of Public Health and formerly made coverage decisions at Blue Cross Blue Shield of Michigan.

The big picture: 

Anthem’s initial decision was controversial at the time — but outrage erupted this week after the murder of UnitedHealthcare CEO Brian Thompson in New York City cast a spotlight on divisive insurance decisions.

  • On social media, critics of health insurers drew a direct line from controversial coverage decisions to the death of Thompson.

The spotlight is on health insurance companies. Patients are telling their stories of denied claims, bankruptcy and delayed care.

Posted on by • Posted in Bankruptcy, Delayed Care, Denial, Denial Management, Health Insurance Denial, Health Insurance Industry, Health Policy, Healthcare Reform, Medical Debt, Out of Pocket Expenses, Out-of-Network, Profit, Profit Motive, Underinsured, UnitedHealth Group, UnitedHealthcare • Leave a comment

https://www.yahoo.com/lifestyle/spotlight-health-insurance-companies-patients-014648180.html

After UnitedHealthcare CEO Brian Thompson, left, was killed and Anthem released a controversial anesthesia policy, people shared their stories of insurance woes. (UnitedHealth Group via AP, Getty)

After UnitedHealthcare CEO Brian Thompson, left, was killed and Anthem released a controversial anesthesia policy, people shared their stories of insurance woes. (UnitedHealth Group via AP, Getty)

On Wednesday, Brian Thompson, the chief executive of UnitedHealthcare, was fatally shot in midtown Manhattan in what police are calling a “pre-meditated, preplanned, targeted attack.” Days before, Anthem Blue Cross Blue Shield said in a note to providers that it would limit anesthesia coverage in some states if a surgery or procedure exceeded a set time limit (the policy, set to go into effect in February, was swiftly reversed following an uproar).

The U.S. health care insurance system relies on private insurance, which covers 200 million Americans, and government-run programs.

Americans receive coverage through their employers, government programs like Medicaid or Medicare or by purchasing it themselves — often at a high cost. Even when an individual is covered by insurance, medical coverage can be expensive, with co-pays, deductibles and premiums adding up. Going to an out-of-network provider for care (which can be done unintentionally, for example if you are taken by ambulance to a hospital) can lead to exorbitant bills.

And then there’s the fact that, according to data from state and federal regulators, insurers reject about one in seven claims for treatment.

And most people don’t push back — a study found that only 0.1% of denied claims under the Affordable Care Act, a law designed to make health insurance more affordable and prevent coverage denials for pre-existing conditions, are formally appealed. This leaves many people paying out of pocket for care they thought was covered — or skipping treatment altogether.

For many, the cost of life-saving care is too high, and medical debt is the No. 1 cause of bankruptcy in America.

That is to say nothing of the emotional labor of navigating the complex system. With Thompson’s killing and the Anthem policy, there’s been widespread response with a similar through line: a pervasive contempt for the state of health insurance in the United States. The most illustrative reactions, though are the personal ones, the tales of denied claims, battles with insurance agents, delayed care, filing for bankruptcy and more.

‘We sat in the hospital for three days’

Jessica Alfano, a content creator who goes by @monetizationmom, shared her story on TikTok about battling an insurance company while her one-year-old child was in the hospital with a brain tumor. When her daughter needed to have emergency surgery at a different hospital was outside their home state, UnitedHealthcare allegedly refused to approve the transfer via ambulance to New York City. She also couldn’t drive her daughter to the hospital as the insurance company told them they would not cover her at the next hospital if they left the hospital by their own will and did not arrive by ambulance. “I vividly remember being on the phone with UnitedHealthcare for days and days — nine months pregnant about to give birth alone — while my other baby was sitting in a hospital room,” she said.

https://www.tiktok.com/embed/v2/7444723783765740830?lang=en-US&referrer=https%3A%2F%2Fwww.yahoo.com%2Flifestyle%2Fspotlight-health-insurance-companies-patients-014648180.html&embedFrom=oembed

‘Excruciating pain’

While pregnant, Allie, who posts on TikTok as @theseaowl44, went to the hospital in “excruciating pain,” she said in a video. After initially being sent home by a doctor who said she was having pain from a urinary tract infection and the baby sitting on her bladder, she returned to the hospital to learn she was suffering from appendicitis. She was sent to a bigger hospital in St. Louis, where she had emergency surgery. Her son survived the surgery but died the next day after she delivered him.

https://3489f1614246e47166ad8768064e31d6.safeframe.googlesyndication.com/safeframe/1-0-40/html/container.html

About 45 minutes later, Allie suffered a pulmonary embolism and had to have an emergency dilation and curettage (D&C) to remove the placenta, nearly dying in the process. It was after all of this that she learned she had been sent to a hospital that was out of network. “We ended up with a bill from the hospital that was more than what we paid for the home that we live in, and it was going to take probably, I don’t know, 20 to 30 years to pay off this hospital bill,” Allie said. “We opted to have to file bankruptcy, but not before I exhausted every appeal with [insurance company] Cigna — I wrote letters, I spilled my heart out, I talked on the phone, I explained our situation and our story, thinking surely someone would understand this was not my fault.

On the third and final appeal, because they only allow you three, Cigna’s appeal physician told me, point blank, it was my fault that when I was dying from a ruptured appendix in the ER, that I didn’t check and make sure that the hospital I was being sent to by ambulance was in my insurance network.”

https://www.tiktok.com/embed/v2/7445019152714173726?lang=en-US&referrer=https%3A%2F%2Fwww.yahoo.com%2Flifestyle%2Fspotlight-health-insurance-companies-patients-014648180.html&embedFrom=oembed

Hundreds of similar stories are being told, but the comments section on these videos paints a picture in itself. “I wear leg braces and walk with crutches as a paraplegic and they tried to deny my new leg braces and only approve me a wheelchair. They wanted to take my ability to WALK away,” commented TikToker @ChickWithSticks.

“Perfectly healthy pregnancy, until it wasn’t,” TikToker Meagan Pitts shared. “NICU stay was covered by my insurance, the neonatologist group contracted by the NICU: Denied. I’m sorry, what?”

Another wrote that her son was born with a congenital heart defect and needed open heart surgery. “My husband changed jobs & we switched to UHC,” she wrote. “They DENIED my son’s cath lab intervention!”

‘The most stressful time of my life’

One Redditor, @Sweet_Nature_7015, wrote that they struggled with UnitedHealthcare when they and their husband were in a “terrible car accident” that was the other driver’s fault. Since United Healthcare only covered two days in the hospital, the Redditor wrote that the case manager tried to find a way to “kick him out of the hospital” — but since their husband was in a coma, he was unable to be discharged safely. “The stress of being told — your health insurance isn’t covering this anymore, we have to discharge your husband — while he’s in a freaking coma and on a ventilator, etc, rediculous [sic],” they wrote. “I have to sign some papers to give up all of my husband’s benefits via his job – which included his life insurance that he had paid into, so we lost that. This allowed him to be covered by Medicaid. I can’t even put into words how much stress UHC caused on top of my husband (and my) health issues in the most stressful time of my life.”

The kicker, they wrote, was that years later the couple was awarded a court settlement from the other driver in the accident — and “UHC rolled up to the court and took the entire settlement money as their payment for those two days in the hospital they had paid for.”

‘I’m one of the lucky ones’

On the same thread, Redditor @sebastorio wrote that they went to the emergency room for an eye injury, which their doctor said could have resulted in a loss of sight. “UHC denied my claim, and I paid $1,400 out of pocket,” they said. “I’m one of the lucky ones. Can’t imagine how people would feel if that happened for critical or life-saving care.”

‘Constant stream of hostile collection calls’

Redditor @colonelcatsup opened up about their experience with insurance while having a baby, writing that they went into premature labor while insured under one company but that at midnight, their insurance switched to United Healthcare. “I gave birth in the morning. My daughter was two months early and was in the NICU for weeks so the bill was over $80,000 and United refused to pay it, saying it wasn’t their responsibility,” they wrote. “In addition to dealing with a premature baby, I had a constant stream of hostile collection calls and mail from the hospital for 18 months. My credit took a hit.”

Eventually, their employer hired an attorney to fight UHC, and the insurance company eventually paid. “I will never forgive them for the added stress hanging over me for the first year and a half of my child’s life,” they wrote.

‘Debt or death’

On Substack, on which she posted an excerpt from her Instagram, author Bess Kalb also recounted her experience with health insurance coverage when she was bleeding during her pregnancy and was asked by an EMT what insurance she had before deciding whether they would go to the nearest hospital. When her husband said to take Kalb to the hospital, despite not knowing the insurance implications, their bill was more than $10,000.https://www.instagram.com/p/DDNphXCp3Qu/embed/captioned/?cr=1&v=12

“The private insurance industry forces millions of Americans to choose between debt or death,” Kalb wrote. “Often, ghoulishly, the outcome is both. If I were worried about an ambulance out of coverage, I would have waited at home or waited in traffic for an hour to cross Los Angeles to get to my doctor’s office and sat in the waiting room bleeding out and perhaps would not be here to write this, and neither would my son.”

New Senate Report on Prior Authorization in Medicare Advantage Begs a Question: Can Big Insurance Ever Be Regulated Adequately to Ensure Patient Care?

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https://healthcareuncovered.substack.com/p/new-senate-report-on-prior-authorization?utm_source=post-email-title&publication_id=255152&post_id=150665002&utm_campaign=email-post-title&isFreemail=true&r=59t65&triedRedirect=true

Last week, the Senate Permanent Subcommittee on Investigations, led by Sen. Richard Blumenthal (D-Connecticut), released a Majority Staff Report on rampant prior authorization (PA) abuses in Medicare Advantage (MA).

The report offers unique insight into recent trends in the use of prior authorization by Medicare Advantage plans and the strategy and motives behind insurance corporations’ use of it. 

While the findings won’t surprise those who’ve been following health policy trends, it is immensely concerning that between 2019 and 2022, the prior authorization denial rate for post-acute care in UnitedHealth’s Medicare Advantage plans doubled.

The denial rate for long-term acute care hospitals in Humana’s Medicare Advantage plans increased by 54% from 2020 to 2022. During this time, UnitedHealth, CVS/Aetna, and Humana increased their use of artificial intelligence (AI) for prior authorization reviews, often resulting in increasing denial numbers and decreasing (or absent) review time by human beings.

The report recommends that the Centers for Medicare and Medicaid Services (CMS) collect additional data, conduct audits of prior authorization processes, and expand regulations on the use of technology in PA reviews. While these recommendations would be positive steps, the report’s findings call into question whether Big Insurance can ever be trusted or regulated enough to prevent abuse of patients through prior authorization and other mechanisms. 

This report provides an in-depth look at insurers’ motivations. Sadly, those motivations are not to “make sure a service or prescription is a clinically appropriate option,” as UnitedHealth claims, but to decrease the amount spent on medical care to increase the corporations’ profits.

The report noted that CVS, which owns Aetna, saved $660 million in 2018 by denying Medicare Advantage patients’ claims for treatment at inpatient facilities. Around the same time, CVS found in its testing of a model to “maximize approvals,” which would be a good thing for patients, that the model jeopardized profits because it would lead to more care being covered. In 2022, CVS “deprioritized” a plan to increase auto-approvals because of the lost “savings” from denying patient care. 

The report found that the motivation to increase profits, without regard for patient care, was not unique to CVS/Aetna.

UnitedHealth’s naviHealth subsidiary provided this directive to its employees: “IMPORTANT: Do NOT guide providers or give providers answers to the questions” when speaking to a patient’s doctor about a prior authorization request. Instead of working collaboratively with doctors to get patients the care they need, UnitedHealth told its workers not to bother. In a training session offered to Humana employees involved in prior authorization reviews, the company explained that reviewers should deny a request for post-acute care even if a patient needed more intensive treatment. Humana told reviewers that the lack of an in-network lower-level care facility for patients to go to was not a reason to approve post-acute care and that usually the situations can be “sorted out,” presumably by the patient with no help from the insurer.

All three companies (UnitedHealth, Humana and CVS/Aetna), which dominate the Medicare Advantage program,  demonstrated a striking lack of motivation to protect and enhance patient care, instead showing a primary motivation to increase profits and margins. 

The subcommittee’s report also noted that UnitedHealth, CVS/Aerna, and Humana are increasingly using AI to make care decisions and cutting humans, especially doctors, out of the process. The researchers found that in 2022, UnitedHealth looked into how using AI and machine learning could aid in predicting which denials of post-acute care requests were most likely to be overturned.  One would hope this effort would be to decrease the number of wrongfully denied prior authorization requests and increase patient access to care.

However, the report includes a quote from a recap of a meeting on the project asking “what we could do in the clinical review process to change the outcome of the appeal,” meaning that UnitedHealth was interested in preventing the overturning of denials, not getting the decision right in the first place. The report also found evidence that naviHealth used artificial intelligence to help determine the coverage decisions for a patient’s post-acute care claim before any human post-acute care providers evaluated a case. The report’s authors found that denials for post-acute care facilities rose rapidly once naviHealth began managing these requests for UnitedHealth’s MA plans. 

These are just some of the findings in the 54-page report on Big Insurance’s use of prior authorization to deny Medicare Advantage patient requests for post-acute care.

The report’s findings demonstrate the abuse of prior authorization by the insurers, the motivation to increase profit and decrease patient care, and the use of AI to increase denials. Further, the findings underscore that prior authorization is a tool used by Big Insurance primarily to maximize profits. The report puts forward recommendations to cut down on abusive denials, which would have some positive impact.

More importantly, I believe the report provides more evidence that it is becoming exceedingly less likely that private and for-profit insurance companies can be regulated and act in a way that promotes patient health over profits.

Private Health Insurance Spends Big on Political Contributions and Lobbying

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https://healthcareuncovered.substack.com/p/private-health-insurance-spends-big?utm_source=post-email-title&publication_id=255152&post_id=151215610&utm_campaign=email-post-title&isFreemail=true&r=59t65&triedRedirect=true&utm_medium=email

With the election looming and the beginning of annual open enrollment periods for health insurance plans, it is vital to pull back the curtain on the influx of money from Big Insurance corporations to political campaigns and lobbying. 

Data available from OpenSecrets.com thus far in 2024 shows that 93% of Congressional incumbents running in 2024 received contributions from Big Insurance, including 100% of Senate incumbents. These insurance corporations run the ten largest Medicare Advantage plans in the country and are known to deny needed health care and defraud the government, but face little to no consequences.

Insurance corporations included in this analysis are UnitedHealth Group, Humana, CVS/Aetna, Kaiser Permanente, Elevance Health, Centene Corp, Cigna, Blue Cross Blue Shield Association (which represents many MA plans, including two of the largest: BCBSMichigan and Highmark), and SCAN.

Additionally, as bipartisan scrutiny of pharmacy benefit managers (PBMs) and Medicare Advantage plans has intensified, spending by Big Insurance on lobbying has increased.

Total lobbying spending by America’s Health Insurance Plans; Pharmaceutical Care Management Association; UnitedHealth; CVS/Aetna; and Cigna for the years 2021, 2022 and 2023.

This open enrollment season, people struggling to choose a health insurance plan that they can afford and that provides the care they need may ask themselves, “Why is our health care system like this?” The immense amounts of money Big Insurance spends to blanket members of Congress with contributions and lobbying hold the answer. 

Additional analysis following the election will allow evaluation of just how much Big Insurance spends on politics to help protect industry profits and will give health reform advocates an idea of how to overcome this influence to pass policies for patients, not profits.