Health insurance claim denial rates range from 13% to 35% by insurer

It’s definitely a sarcastic comment lol.

What we have today isn't insurance in any meaningful sense. Traditional insurance is about pricing risk: healthier people pay less, higher-risk people pay more, and the pool works because premiums reflect actuarial reality.

The Affordable Care Act largely banned that. Insurers can no longer use health status or pre-existing conditions to set rates (via "community rating" and guaranteed issue rules). The result is that everyone effectively pays into a giant, heavily regulated pool. There's a finite amount of money in that pool, so someone has to ration care. That job now falls to the insurance companies, who deny or delay procedures, medications, and treatments.

Health insurers aren't saints — but the core problem is structural. When you remove risk pricing while mandating coverage, adverse selection and cost shifting are inevitable. The ACA patched one serious issue (pre-existing conditions) by breaking the fundamental mechanism that makes insurance sustainable.

We need to be honest about the tradeoffs instead of pretending this is still "insurance."

>The popular image of a denial is an insurer overruling a doctor on whether a treatment is needed. That is the exception. Only about 5% of denied in-network claims were turned down because the care was deemed not medically necessary. The rest were administrative, for an excluded service, for a missing referral or prior authorization, or for a reason the insurer never specified.

When an insurance company denies a health claim overruling a doctor, it can be necessarily concluded that either:

1. somehow the company knows more about the patient's condition and the doctor is wrong

2. the doctor is defrauding the system and the insurance company caught the doctor cheating

3. the company is defrauding its clients.

There is no middle ground honestly, and yet "5% of denied in-network claims were turned down because the care was deemed not medically necessary".

This is absolutely crazy and evil. I would expect a few thousand cases annually and probably for million of cases you get denied what you pay for because "we detected your doctor is wrong and we're not paying".

>In fact the single largest category, 36% of denials, was an unexplained "other." A system that rejects tens of millions of claims a year and files more than 1/3 of those rejections under no stated reason is hard for an outsider, or a member, to audit.

I can't even imagine getting lifesaving care denied because of "other". I didn't know things were so grim in the USA and honestly now I'm kinda surprised that more people are not getting "Luigi'd".

You might be surprised just how durable the effects of 40-year-old decisions are. You can actually see changes to the very degree completion-rates, when partitioned by field of study. Particularly, education and physics fields (as classified by NCES), have absolutely cratered from the mid 70s to the mid 80s, while business fields became dominant. And if you need data, I actually published an entire (and entirely too long) essay, analyzing the NCES data from 1970 to 2011 (a sequel post for 2011 to present is planned), yesterday[0][1]. Healthcare tends to boom and bust[2] in cycles, and those cycles are _inversely_ correlated with engineering, informatics (the most elegant term for what we call "computer and information sciences"), and business.

[0]: https://galacticbeyond.com/two-percent-programmer/

[1]: https://web.archive.org/web/20260620162923/https://galacticb...

[2]: In both the economic sense, and in the completion-rate sense, because those two things are correlated. And they have been correlated since the 1980s, because a lot of the healthcare industry became de-regulated and more profitable as a result, since at least 1978 (when hospitals were de-forbidden from making profits).

People like to complain about things and have very unrealistic perceptions of what other systems are like. It's also really unpopular online to say good things about the US healthcare system. It definitely has some issues, but it also does some things really, really well.

These are, of course, anecdotes, but here some things from my life:

- Next day MRI for my wife after she injured her back at the gym. Had it been more serious she would have been seen the same day.

- Friend's kid was diagnosed with leukemia. They were admitted to the cancer ward the next day, where they stayed for months. The room was large, with a pull out double bed for my friend and his wife to sleep on. The same thing happened with my cousin when she was diagnosed with a brain tumor.

- Our kids were both born at one of the "poor" hospitals in the largest city in our state. We were the only ones on the floor who shared the same last name, and most patients did not speak English. It was excellent. We had our own room (with bathroom, shower, small bed for me to sleep on), great staff, etc.

- Urgent care available 7 days a week at numerous locations within a 5-10 minute drive from my home. Typically a 15-20 minute wait for things like stitches, burns, dislocated fingers, etc.

- Nice pharmacies all over the place, which also provide things like vaccinations. Lots of our medications are now just shipped to our house directly

- The small surgeries I've needed have been done within 2-3 weeks of meeting with my primary care doctor. If they would have been more serious, the timeline would have been significantly shorter, within a day or two. Things like colonoscopies are also available within a number of weeks.

- The hospital system we use has done a really good job embracing technology. The app/website they offer can be used to view all of your test results, message the doctors or nurses, schedule appointments, etc