“There are more ways people can be denied by their health insurer than they realize.”
It’s not news to any of us that the US health insurance system needs massive change. The sheer scale of administrative and financial burden on patients and providers is untenable. I spoke with Miranda Yaver about her research on one underdiscussed aspect of the insurance maze: coverage denials.
Miranda is a health policy professor at the University of Pittsburgh and was the Roosevelt Institute’s 2025 author-in-residence. Her book Coverage Denied is out today, April 23, from Cambridge University Press.
Health insurance coverage denials and how they affect patients
Stephen Nuñez: In my own recent research on health-care policy, I detailed the consequences of our broken system for patients: medical debt, bankruptcy, and delayed or forgone treatments that often lead to worse health outcomes down the road. I focused on some of the better-known aspects of American health care, like underinsurance through high premiums, high deductibles, co-pays, and gaps in coverage (such as being between jobs).
In your new book, you focus on another aspect of the health-care system: denial of coverage among people who think they are insured against injury and illness. Could you explain the different ways this plays out?
Miranda Yaver: When we talk about problems like underinsurance in America, we’re typically referring to high out-of-pocket medical costs within the plan terms (such as high deductibles or high cost sharing). What I work to do in Coverage Denied is show that there’s this additional, less-discussed dimension of underinsurance: inadequate protection by health benefits in which one is enrolled, not due to plan terms, but rather due to insurer decision-making about what is actually medically necessary. Strikingly, there are more ways people can be denied by their health insurer than they realize.
Prior authorization, or required health insurer preapproval for prescribed care (typically costlier care, though it has certainly extended to lower and even low-cost care in recent years), is the realm of denials with which Americans are likely the most familiar. This is when your health-care provider wants you to get a CT scan, but you can’t proceed with scheduling until it gets cleared by your health insurer—and it might get denied. When people are denied prior authorization for health-care services, they face delays or denials of medical tests or treatments, potentially risking worsening health, unless they can afford to pay out of pocket (but health care in the United States is notably expensive, so that is rarely an option).
There are appeal processes in place that a patient denied prior authorization and their physician can pursue, though it can take time to submit additional information and receive a redetermination, and physicians might only be given hours to respond to a request to avoid a patient being denied again. This might mean that the patient cannot proceed with scheduling a diagnostic test. In the case of, say, a prescription medication, the patient may go unmedicated—potentially leading to worsening of symptoms —or be on a second-choice regimen to avoid an entire gap in care, pending the insurer processes that will take an unknown period of time to resolve. And if the patient’s conditions worsen, they may eventually require higher-level (and consequently, more expensive) medical care.
The irony here is that prior authorization is partly a measure aimed at cost containment, but if denials are ultimately delays that necessitate more pronounced medical intervention (whether receipt of medication in the emergency department, or even getting admitted), then this practice can undercut insurers’ underlying profit objectives.
People can also receive concurrent denials, which occur when the insurer decides during the course of a medical treatment that it will decline coverage for further care. The result of this mid-treatment decision can be treatment disruption, if not altogether discontinuation, that can undercut optimal health outcomes for the patient.
Retrospective denials occur when the insurer denies payment for health care that was already provided to the patient. While this does not leave the patient vulnerable to declining health with respect to that condition, it does raise the prospect that they will have to take on medical debt and potentially forgo other care so as to avoid risking accruing additional medical expenses. Additionally, though infrequently, one may be vulnerable to a retroactive denial, which occurs when an insurer retracts payment for a service that they already approved, leaving the patient themselves responsible for the payment (e.g., because the insurer determined that they should not have approved it previously). This can also render the patient vulnerable to assuming new medical debt that can be financially destabilizing and foregoing further health-care expenses. While this may be an appropriate error correction on the part of the health insurer, it can drive significant uncertainty and destabilization for the patient, who might not have continued to pursue the care if they had better information at the outset.
These types of claim denials (i.e., denials post-treatment) operate quite differently from prior authorization denials. The good news is that they shouldn’t result in a patient’s worsening condition per se (though anxiety about a denial of coverage for test A may lead to reluctance to pursue test B). The bad news is that this can contribute to the patient’s financial destabilization, potentially leading to medical debt that hurts their credit and thus broader economic opportunity. And of course, we know that medical debt is unevenly distributed across racial and socioeconomic groups, and health insurance barriers constitute another driver of those inequities.
Given that patients are often making these decisions with informational disadvantages—we don’t have a good sense of what care is in fact medically necessary, let alone the criteria with which our insurers are evaluating this—this multitude of ways that patients can be left both medically and financially vulnerable lays bare just why accessing health care in the US can be so anxiety-provoking (not to mention inequitable). And while analyses have shown that some providers do prescribe medical care that is of low or questionable value (in turn, running up quite a tab), all too often, the burden falls on patients, who get caught in between their prescribers and their insurers.
Stephen: What remedies are there for patients when denials happen, and do people even know about them or how to obtain them?
Miranda: As I mentioned, there are appeal processes in place, which insurers are legally required to provide patients with information about when they are issuing a notice of a denial. Some insurers are especially transparent about their process—UnitedHealthcare, for example, publishes online its detailed description of the three-layered standard appeal process and three-layered expedited appeal process. But there are a few things that can and often do get in the way of patients understanding and acting on this right, so that fewer than 1 percent of denied marketplace claims and less than 12 percent of Medicare Advantage (the privatized version of Medicare) prior authorization denials are appealed.
For starters, appeal explanations are already complicated processes that are often written in a way that is difficult for the average reader to understand. That means many people don’t even know what their rights even are. Additionally, people may underestimate the value of appealing. “I’m just one person going about their day. How could I possibly stand a chance going up against a health insurance giant?” And in fact, when I asked 1,340 people to guess how often health insurance appeals are won, most survey respondents thought patients win less than 20 percent of the time. In truth, it’s closer to a coin flip, with various estimates lying in the 40–60 percent range, and 52 percent of my survey respondents winning their appeals if they appealed. But if you think that this endeavor of appealing is likely to be fruitless, it makes sense that one wouldn’t exert the time and energy—the burden—of appealing.
I asked all of my survey respondents who were denied by their insurer but did not appeal why they chose not to do so. The two most common reasons were that (a) they didn’t realize they could appeal (often because the information was in fine print or not conveyed in plain language, or they saw the denial and got so discouraged that they didn’t read further) and (b) they didn’t think they stood a chance at winning (though many said that if they had known it was a coin flip, they’d have been more likely to appeal their own denial). Respondents also cited confusion about how to navigate the red tape of this insurance process. So, on the one hand, there’s a lot of evidence that coverage denials are not only destabilizing to health and finances, but that administrative burden gets in the way of patients pursuing appeals to reverse these adverse decisions. On the other hand, my findings point to the possibility of some simple information interventions to improve patient knowledge and, in turn, improve access to health benefits, even if we can’t tackle (yet) the complexity of the appeal processes themselves.
But the underlying reality is that insurers expect that patients are unlikely to go through the appeal process, which is difficult enough on a good day (and we’re rarely having our best day when we need to appeal to insurers). In fact, one person I interviewed, who reviews claims for a major health insurer, said they were told that denying is perfectly fine because there is an appeal process—even though they have the data to confirm that most patients don’t go through with them. This is why I characterize these processes not as rationing care through denial, but rather rationing by inconvenience, or accumulations of inconveniences.
Stephen: This sort of thing seems even crueler than high premiums and deductibles, where at least you know what you’re (not) getting. The uncertainty and arbitrary and almost Kafkaesque conditions experienced by patients who suddenly find themselves without the safety net they thought they had purchased is really striking.
You did a lot of interviews for this book. Are there any cases that stand out to you, that really illustrate the absurdity of it all?
Miranda: It is absolutely the case that this uncertainty and apparent arbitrariness—the “song and dance”—is overwhelming and heart-wrenching for patients (as well as for their providers) in a way that goes beyond the broader but more predictable frustrations about care being unattainable due to, for example, a high-deductible health plan. One physician interviewee told me about his experience with prior authorization burdens:
“It feels like there are people sitting around a room conspiring to figure out how to delay care further. And every day that they can delay your care is money kept in their pocket longer.”
One patient story that stuck out was surely an administrative error, but nevertheless burdensome for both patient and physician to correct. This patient was getting a wrist MRI with contrast: First, the patient had radioactive dye injected, and then the scan was to be performed. Her insurer approved the radioactive injection but not the scan that made that exposure necessary. Now, at face value, that sounds silly—and it is. But what it took to correct it was a recognition that this was absurd (when a lot of patients don’t read itemized medical bills, let alone understand them), and a degree of health insurance literacy and administrative capital that enabled her to successfully navigate the complexity of the health insurance appeal process.
But there were some really heart-wrenching stories. One was from a low-income woman in the South who had taken time away from a years-long nursing career due to medical complications following the birth of her daughter. Amid prolonged severe lower abdominal pain and vaginal bleeding, she was ordered a CT scan and spent months navigating insurance complexity to get prior authorization, to no avail. When the insurer asked for additional documentation of medical necessity, she brought to bear all of her skills as a nurse, using not only technical medical terminology to document her symptoms but indicating numeric pain ratings based on exacerbating factors, ameliorating factors, and the like—things that the average individual can’t do, because most people have limited medical knowledge. “I’m a nurse. I know how to document stuff. I’ve been doing it for 15 years,” she recounted. But it was to no avail that she described her condition as clinically and as elaborately as possible when seeking insurer approval. “I got specific, they denied it, and they picked a different reason.”
Then, the hospital erroneously said that the prior authorization was approved, but this patient ended up stuck with such a big bill that not only did she have to put off necessary home repairs amid a failing roof, but she even contemplated divorcing her husband and the father of her daughter in order to have an income that would qualify for Medicaid. This level of financial and family devastation wasn’t anomalous. The average American can’t accommodate an emergency $1,000 expense without going into debt, and as most people can attest to, it’s not hard to accrue a $1,000 medical expense.
And alongside all of this was a real loss of trust in the system and feeling of inadequacy amid the navigation of red tape. One diabetic lawyer said of his battle to get a continuous glucose monitor,
“Is there something wrong with me? Do I not deserve this? Do I think my need is more important than it really is? The process makes you feel so small.”
Diabetes treatment was an area in which coverage barriers were very common. After one interviewee battled her insurer to get on a more sustainable insulin regimen, she said,
“It colored the way I interacted with insurance for the rest of my life.”
Relatedly, it was striking to see the prevalence of prior authorization requirements in corners of health-care delivery where there is not evidence of overutilization and abuse, the mitigation of which is ostensibly a central goal underlying the administration of prior authorization. PrEP is one such medication, which is critical in preventing HIV transmission and thus an important aspect of LGBTQ health. This isn’t a medication that people just take “for fun,” nor is it a medication that is abused or overprescribed—but there can be prior authorization attached to it nevertheless. Another example is insulin, which is literally lifesaving for millions of Americans, but can still have onerous prior authorization and formulary restrictions attached to it. As I spoke with these patients who felt like they were constantly playing the role of Sisyphus pushing the boulder up the hill, it is little wonder why they lost trust in, and felt betrayed by, the insurers to whom they had been paying monthly premiums for years.
How we got here: Why US health insurance is the way it is
Stephen: It seems that there’s a fundamental issue in health care around constraining costs and preventing overtreatment in the form of unnecessary/low-value/wasteful care. Doctors want to be thorough (and don’t want to be sued for malpractice), patients don’t know how to distinguish between necessary and unnecessary care, and insurers don’t want to pay, for example, to run an endless battery of useless tests. But while this might be a fundamental problem in health care, the ways in which it plays out in the United States are unique and tied to our for-profit insurance system.
Can you describe some of the features of our system that have contributed to “managed care” (plans that cut costs via pre-authorizations, drug tiers, step therapy, etc.)?
Miranda: During the New Deal, there was some hope that amid this expansion of national power to lift the US out of the Great Depression, there might be sufficient support to carry national health insurance across the finish line. But even Franklin D. Roosevelt’s immense popularity wasn’t enough to get this done, and it became clear pretty quickly that trying to tie health insurance to Social Security was going to compromise both, and Social Security was an absolute must-have. Harry Truman then spent his presidency fighting tirelessly, albeit unsuccessfully, for national health insurance, but faced immense opposition campaigns from organizations like the American Medical Association (AMA), which used the slogan “The Voluntary Way is the American Way” in an effort to curb movement toward a compulsory insurance program that they likened to “socialized medicine.” In the background of all of this, employer-sponsored insurance had just gained prominence during World War II and further advanced through the labor movement: The Stabilization Act of 1942 precluded raising wages to attract much-needed workers, so health insurance became the perk of choice.
Eisenhower didn’t unravel the New Deal, but he did favor privatization over national insurance. When the 1960s rolled around, the previous ambitions of national health insurance were scaled down to prioritize targeting two vulnerable populations, the indigent (who would get Medicaid) and the elderly (who would get Medicare). Amendments to the Social Security Act in 1965 ultimately secured this new coverage. And in fact, LBJ signed these into law at the Harry S. Truman Presidential Library in Independence, Missouri, as a nod to his long-fought efforts toward this expansion.
But of course, these programs cost money, in part thanks to the fee-for-service arrangements according to which they were designed, such that there was little oversight over billing and the physicians could earn more by ordering more tests and treatments. So, it’s around this time that we see the introduction of some very narrowly circumscribed utilization management, such as certifying hospital lengths of stay. Of course, having a physician tell an insurer, “Yes, this patient does still need to be in the hospital to treat X” is a far cry from its current sweep. But the rising health-care costs also fueled the enactment of the Health Maintenance Organization (HMO) Act of 1973, which encouraged the development of HMOs, which are private insurance plans. What would later follow was the more flexible preferred provider organizations (PPOs). Ironically, with this latter, more flexible mechanism of health insurance delivery came the loss of a key cost-control mechanism, giving rise to the set of concerns that led to the proliferation of prior authorization.
The Balanced Budget Act of 1997 further cemented the United States’ reliance on privatization, bringing Medicare Advantage onto the scene and escalating the privatization of Medicaid. It’s in this moment that we see at a large scale the privatization of traditionally public health insurance programs whose enrollees would now come to experience managed care plans’ cost-containment tools like prior authorization. And as health-care innovation—from new drugs to new technologies—flourished in the US, both quality and cost increased, spreading prior authorization into new corners of health-care delivery. Today, if you’re being prescribed a higher-cost drug, high-tech imaging, a surgery, a major procedure, and even some less costly drugs, you can bet on prior authorization or some form of step therapy (in which a patient must try lower-cost drugs before “stepping up” to what was initially prescribed).
At the end of the day, it’s a tough issue of politics, economics, medicine, and law all wrapped up in one. We don’t have unlimited amounts of money to spend on health care without making very hard (and likely politically unpalatable) choices in other areas of policy delivery, so we need to find ways to contain costs, hopefully without compromising quality of care. We often misperceive more care as equating to better care (sometimes it is, but it certainly isn’t a guarantee), which then places demands on physicians who need to be mindful of patient satisfaction ratings as well as malpractice liability. That can in turn drive some degree of defensive medicine (or ordering unnecessary tests and procedures) that comes with a price tag.
And in the background of all of this is the reality that health insurers don’t have a ton of incentive to make up-front investments in our health—even those that have a good return on investment—because people change health insurers so frequently. This means that while it may seem like poor financial planning for Cigna to deny a patient Drug A, by the time a costly complication manifests for the patient, they may no longer be on Cigna, but rather UnitedHealthcare, or they may have aged onto Medicare. So, in addition to concerns about privatization, cost containment (as well as profit maximization given the need to report quarterly growth), and overutilization (which can undercut those cost-containment objectives), there’s also some passing of the buck that may not yield great patient outcomes and may even drive up costs in the system writ large, but not for the insurer that issued the initial denial.
So, then we get to the question of whether there are better alternatives to contain costs. One way to make up the deficit is that insurers could raise premiums, but we know that’s untenable for most people and would drive problems of adverse selection. Negotiating down the cost of health-care delivery by providers would certainly be a nonstarter with the AMA as well as with the broader physician community, especially given the high cost of medical training and recent politics around loan forgiveness. Improving drug price negotiation with the pharmaceutical industry is important, and we’ve moved in that direction narrowly, but that still won’t touch a lot of the problems here.
Another very underdiscussed aspect of this problem is the reality that while overutilization is a commonly cited concern driving the implementation of prior authorization, physician burdens associated with prior authorization and the appeals it can necessitate can actually drive issues of underprescribing to avoid these challenges.
Stephen: A big theme of the book is path dependence, the idea that each legal or regulatory decision sets us down a path and makes it harder to reach other outcomes. For example, I was struck by the fact that the backlash against narrow networks implemented by HMO plans probably made pre-authorization more common.
Maybe a bigger surprise was the ways that the Affordable Care Act (ACA) may have inadvertently contributed to the current situation. Could you explain more?
Miranda: I’ll preface this by saying that I’m a huge fan of the ACA, but a few aspects of it are relevant to the story I’m telling here. First, it directly built on the private health insurance framework (the setting in which delays and denials of coverage are the most common) and left prior authorization largely undisturbed, with the exemption of emergency department care and in-network OB-GYN care. So, overall, there’s increased patient participation in private health insurance plans, which come with more prior authorization except in some narrowly circumscribed areas. But there’s also the possibility that when Congress told these private health insurers to cover all these people they’d done a very good job of finding ways to avoid covering—those with what had been declinable preexisting medical conditions (around 27 percent of non-elderly US adults, according to a 2019 KFF estimate)—the insurers look for other ways to curb costs. They can’t deny patients anymore, so it’s possible that denial of payment for prescribed care became the attractive alternative.
Stephen: When doing research on medical debt, I found that the debt problem was a lot worse for people on employer-sponsored insurance plans or ACA marketplace plans than for folks on Medicaid and Medicare (though a substantial portion of Medicare recipients are still carrying debt from their time uninsured and underinsured prior to aging into Medicare.)
You quote health-care expert Jacob Hacker in the book, who said, “Medicare should be the model for health security.” But a large part of the book details how both Medicaid and Medicare are also increasingly becoming managed-care systems. Can you explain what is happening and why?
Miranda: The US health insurance system is definitely made far more complex through its fragmentation, as well as its entwining of public and private programs, which can culminate in contradictory popular sentiment like “keep your government hands off my Medicare” and what Suzanne Mettler has characterized as the “submerged state.” And of course, Medicare is not the only government insurance program that has become heavily privatized. Not only are about 54 percent of seniors in Medicare Advantage, but about three-quarters of Medicaid is privatized.
Privatization of these two critical health insurance programs, which combine to cover roughly 4 in 10 Americans, is problematic for many reasons, but in the context of this book, it means adding a lot of prior authorization—and the delays and denials that come with it—for a population that has generally lower health-insurance literacy and is consequently less well-equipped to navigate the burdensome repercussions of these processes. Unlike Medicare Advantage, where 99 percent of enrollees have prior authorization, traditional Medicare has historically used prior authorization sparingly and denies care infrequently, though Centers for Medicare and Medicaid administrator Mehmet Oz’s introduction of the WISeR model that experts agree may lead to more denials. Medicare has been a game changer in enabling seniors to have quality coverage at a time in their lives when they generally have greater health needs but limited disposable income—and it provides this coverage with low administrative spending relative to private insurance and outside the confines of means-testing that can be stigmatizing and thus dampen policy take-up. But its privatization over the last three decades has produced outcomes that look a lot more like the broader private health insurance landscape (whether employer-sponsored insurance or the ACA marketplace) in terms of prior authorization, delays and denials of coverage, and burdensome and inequitable processes to appeal those adverse decisions.
On the managed Medicaid side, we also see frequent reliance on prior authorization and high incidence of delays and denials. Not only is this a population that has generally low health insurance literacy (raising the burdens of appealing barriers to coverage), but it is also generally less healthy (raising the stakes of these barriers to coverage). Moreover, due to their low income, they’re especially unlikely to be able to front the cost of medical treatment in order to avoid a gap in care pending an insurance appeal.
HENRY KOTULA 