This story was originally published by ProPublica.
States have passed hundreds of laws to protect people from wrongful insurance denials. Yet from emergency services to fertility preservation, insurers still say no.
In North Carolina, lawmakers outraged that breast cancer patients were being denied reconstructive surgeries passed a measure forcing health insurers to pay for them. In Arizona, legislators intervened to protect patients with diabetes, requiring health plans to cover their supplies. Elected officials in more than a dozen states, from Oklahoma to California, wrote laws demanding that insurance companies pay for emergency services.
Over the last four decades,
states have enacted hundreds of laws dictating precisely what insurers must cover so that consumers aren’t driven into debt or forced to go without medicines or procedures. But health plans have violated these mandates at least dozens of times in the last five years, ProPublica found.
In the most egregious cases, patients have been denied coverage for lifesaving care. On Wednesday,
a ProPublica investigation traced how a Michigan company would not pay for an FDA-approved cancer medication for a patient,
Forrest VanPatten, even though a state law requires insurers to cover cancer drugs. That expensive treatment offered VanPatten his only chance for survival. The father of two died at the age 50, still battling the insurer for access to the therapy. Regulators never intervened.
These laws don’t apply to every type of health plan, but they are supposed to provide protections for tens of millions of people. AHIP, a trade group that used to be known as America’s Health Insurance Plans, said new mandates are costly for consumers and states, “tie insurers’ hands and limit plan innovation” by requiring specific benefits. Nevertheless, its members take steps to make sure they are following these mandates, the trade group said.
State insurance departments are responsible for enforcing these laws, but many are ill-equipped to do so, researchers, consumer advocates and even some regulators say. These agencies oversee all types of insurance, including plans covering cars, homes and people’s health. Yet they employed less people last year than they did a decade ago.
Their first priority is making sure plans remain solvent; protecting consumers from unlawful denials often takes a backseat.
“They just honestly don’t have the resources to do the type of auditing that we would need,” said Sara McMenamin, an associate professor of public health at the University of California, San Diego, who has been studying the implementation of state mandates.
Agencies often don’t investigate health insurance denials unless policyholders or their families complain. But denials can arrive at the worst moments of people’s lives, when they have little energy to wrangle with bureaucracy. People with plans purchased on HealthCare.gov appealed less than 1% of the time, one study found.
ProPublica surveyed every state’s insurance agency and identified just 45 enforcement actions since 2018 involving denials that have violated coverage mandates. Regulators sometimes treat consumer complaints as one-offs, forcing an insurer to pay for that individual’s treatment without addressing whether a broader group has faced similar wrongful denials.
When regulators have decided to dig deeper, they’ve found that a single complaint is emblematic of a systemic issue impacting thousands of people.
In 2017, a woman complained to Maine’s insurance regulator, saying her carrier, Aetna, broke state law by incorrectly processing claims and overcharging her for services related to the birth of her child. After being contacted by the state, Aetna acknowledged the mistake and issued a refund.
That winter, the woman gave birth to a second child, and Aetna did it again. She filed another complaint. This time, when the state made Aetna pay up, it also demanded broader data on childbirth claims. Regulators discovered that the insurer had miscalculated claims related to more than 1,000 births over a four-year period. Aetna issued refunds totaling $1.6 million and agreed to pay a $150,000 fine if it failed to follow
conditions listed in a consent agreement.
It was a rare victory. The potential fine, though, constituted less than .002% of the
$6.63 billion in profit recorded by Aetna’s parent company, CVS Health, that year.
Aetna spokesperson Alex Kepnes said the company resolved the matter in 2019 to the state’s satisfaction. Kepnes declined to answer why the insurer failed to fix the issue after the first complaint.
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