Reports that Aetna’s former Southern California medical director admitted he never looked at patient records before denying a patient critical care reveals an inconvenient truth about our dysfunctional healthcare system—that’s how the insurance system is set up to run, and it won’t change until we delink healthcare from profiteering.
The trampling of patients’ access to essential care is why California nurses are campaigning for Senate Bill 562, a bill that would end insurance abuses while also guaranteeing coverage for all state residents and eliminate premiums, deductibles and other costs that cause millions of Californians to skip needed care.
California regulators are now investigating Aetna’s coverage practices. But punishing Aetna won’t end the abuse, it’s part of the insurance model, and it’s not unique to Aetna.
From 2002 through 2010, the state’s seven largest insurance corporations denied 26 percent of all claims, employing a variety of pretexts, that they were “not medically necessary” or “experimental” or “investigatory,” even when recommended by the patient’s physician.
Rather than scrap this model, insurers screamed bloody murder, and the state stopped recording the number of denials.
But other data that is still public record, reviewed by California Nurses Association researchers, found that claims denials reaching independent medical review by the California Department of Managed Health Care, suggests little has changed.
In 2016 alone, from 60 percent to 80 percent of those health insurance denials were either overturned by CDMHC reviewers or eventually reversed by the insurer. Aetna denials were upheld only 40 percent of the time.
Insurers routinely require pre-authorization for almost any interaction, a specific medical treatment, diagnostic procedure, referral to a specialist, or a particular prescription drug. The Aetna case, for example, stemmed from denial of potentially life saving prescribed therapy for a 19-year-old college student.
Cases typically only reach independent medical review after the patient goes through an arduous grievance process with the insurer, a system that is also rife with abuse, such as failure to maintain a grievance system or the insurer’s failure to meet timelines.
CDMHC has the power to levy fines against the insurers, but they typically amount to little more than a minor irritation. From 2012 through 2016, average insurance profits were 1,389 times larger than penalties doled out. Penalties in 2015 for Anthem Blue Cross, for example, were less than .02 percent of its expenses.
In other words, the rewards in profits far exceed the financial risk, while patients denied care endure pain, suffering, long term injury, or worse.
Under SB562, medical decisions would be based on patient need, not corporate profits. Exactly why insurers have waged a major campaign to block the bill, aided by Assembly Speaker Anthony Rendon who, after SB562 passed the Senate last June, has prevented public hearings and amendments he says are necessary, in the Assembly.
To justify his inaction, Rendon, and the big insurers who support him, have invoked repeated falsehoods about the bill.
It will not “cost $400 billion” in new revenues. Over 90 percent of that is what we already spend on healthcare.
Savings from a single-payer system on funds insurers siphon off for profits—$27 billion the past five years—paperwork for care denials, and lucrative executive pay packages, along with the state’s ability to use its bulk purchasing power to lower drug costs will further reduce overall spending.
A CNA-commissioned study described additional revenues that would reduce what nearly every California family and business now pay for healthcare.
Nor would SB562 “take everybody off Medicare,” a false claim made by gubernatorial candidate Antonio Villaraigosa that has no purpose other than to alarm seniors. SB562 strengthens Medicare, eliminating co-pays seniors currently pay and covering prescription drugs, while protecting other Medicare benefits.
Claims that the Trump Administration won’t authorize a waiver for use of federal revenues also have no merit. Other states have received the necessary federal waivers—the precedent for California exists.
Californians cannot rely on the giant insurance companies whose profit margins always come first, not our care. Speaker Rendon and other elected leaders should make health security of Californians a top priority, and act now on real reform, SB562.