Health Insurers Have Been Breaking State Laws for Years

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.

Patients often don’t know what care they’re entitled to under state mandates. And one survey found that 86% of people with health insurance don’t know which government agency to call for help. Knowing how to navigate the system can make all the difference to patients socked with giant medical bills.

In December 2022, Samantha Slabyk felt a sudden sharp pain in her lower right abdomen. The San Marcos, Texas, resident took herself to an outpatient emergency clinic, but after a CT scan revealed she had appendicitis, doctors sent her in an ambulance to a nearby hospital. “Everyone indicated that this was an emergency situation that needed to be dealt with promptly,” Slabyk said.

Texas has long had a law requiring insurers to cover medical treatment needed by patients in emergencies. Yet that month, her insurer, Ambetter, wrote in a letter that it would not pay the $93,000 bill because the appendectomy took place at an out-of-network facility.

Slabyk was studying to be a physician’s assistant and had been an EMT. Her fiance’s brother-in-law worked in medical billing and gave her advice on how to push back, as did her mom — whose cancer diagnosis meant she often interacted with health insurers. These connections and experiences gave Slabyk an unusual grasp of her rights and how the system works. Still, every time she reached someone at Ambetter, she felt like she was being stonewalled. Slabyk felt lost.

By June, she was so fed up she decided to submit a complaint to the Texas Department of Insurance. Five days later, she received a call from an Ambetter employee apologizing and saying they would process the procedure as an emergency and pay up.

Centene, Ambetter’s parent company, did not respond to emailed questions or a phone call seeking comment. (The state informed Slabyk it closed the complaint.)

“I was around a lot of people who were knowledgeable and giving me very good advice,” Slabyk said. “And so if you’re just like, on your own, not in the health care system whatsoever, I mean, I just, I can totally see giving up.”

California had to pass not one but two laws to compel insurers to pay for infertility treatments. And one lawmaker said insurers are still saying no often enough that he’s considering introducing a third.

After legislators began requiring such coverage in 1990, some health plans took a narrow view. They refused to pay to preserve eggs, sperm or reproductive tissue for patients facing treatments for diseases like cancer that could impair their fertility. Some patients were delaying chemotherapy to try to get pregnant beforehand or going into debt to pay for treatments out-of-pocket. Regulators forced insurers to pay in some cases, but elected officials worried that other patients were being denied this care.

State Sen. Anthony Portantino worked with colleagues to amend the law in 2019, clarifying that these treatments must be covered. Even so, insurers have been putting up roadblocks.

“Some of the insurers are taking a very strict approach that it has to be chemo,” said Portantino, who is a Democrat. For instance, patients who need cancer surgeries that could leave them infertile have faced denials.

Portantino said he plans to work with California’s largest health insurance regulator to clarify that fertility preservation must be covered more broadly. If that does not work, he said he will turn to legislation once again.

Other regulators are trying to bolster enforcement on the front end. Health insurers submit annual filings to the states where they operate, detailing the treatments and services the company will and won’t cover. Regulators check these policies to figure out whether an insurer is complying with state mandates. In Vermont, the insurance department is using federal grant money to work with an outside company to improve these reviews. Through staff training and education, the department hopes to catch insurers not following state laws before Vermont residents face wrongful denials.

Not all health plans have to follow state mandates. About 65% of employees who get insurance through their jobs work for companies that pay directly for health care. Those companies often hire insurers solely to process claims. Known as self-funded plans, they are regulated by the federal government and exempt from state coverage requirements. Employers increasingly are turning to these types of plans, which tend to be cheaper, partly because they don’t have to cover care that states require. (The federal government also imposes coverage mandates, but state laws can be more robust.)

When 57-year-old Sayeh Peterson, a nonsmoker, was diagnosed with stage 4 lung cancer, her doctors ordered genetic testing to identify the cause. Those tests revealed that a rare gene mutation was, in fact, the culprit for Peterson’s disease and gave doctors the information they needed to create a treatment that targeted the mutation. Her state, Arizona, requires insurers to cover such testing, but Peterson’s UnitedHealthcare plan was self-funded by her husband’s employer, so the law didn’t apply. She and her husband were left with more than $12,000 in bills.

In response to questions, UnitedHealth spokesperson Maria Gordon Shydlo wrote that “there is not enough medical evidence to support use of all those tests.”

As Peterson undergoes a treatment plan tailored to the genetic test results, she is continuing to appeal the denials months later. “We’re told that we have this great insurance,” Peterson said. “But then they deny coverage for the testing that determined what my treatment would be. How do you even get your head around this?”

My wife and I were RV traveling in a remote area of Wyoming. We had a private health insurance policy with Blue Cross in NC. I experienced a medical emergency and visited a small clinic about 4pm Mountain time. Doctor wanted to run a diagnostic CAT scan after an X-ray was inconclusive. He called Blue Cross in NC to get approval and got a recording saying the office closed at 5 pm Eastern time and to call back the next day. In great pain I asked if he could do the scan then if I agreed to pay should the claim be denied. I signed the paperwork, the scan was done and the problem identified. I began treatment immediately.

Blue Cross denied the claim as medically unnecessary and for failing to get pre-approval. I paid the clinic bill for the scan when it arrived at home. I then wrote the CEO of Blue Cross NC requesting reimbursement. Fortunately the Wyoming clinic was in the BC network. I explained in my letter the clinic was in network and it was a legitimate medical emergency. The diagnostic procedure was recommended by the in-network physician after a less expensive diagnostic tool failed. It was Blue Cross that chose not to staff the approval line 24/7 so Blue Cross is to blame for pre-approval not being obtained. The doctor in Chicago Blue Cross contracted to review the claim was not present during an emergency, potentially life threatening situation, and therefore could not realistically assess the situation at the time or question the decisions made in the moment by qualified medical personnel on the scene. I stated I am not a physician and therefore had to rely on the expertise, skills and advice of the trained professionals at the clinic. I did not make any threats. I simply stated I had a contract with BC and expected his company to fulfill its obligation.

Two weeks letter I received a letter from the CEO stating my claim had been reevaluated. A check for the amount previously denied was enclosed.

My wife and I never bother with the customer service bureaucracy when dealing with large corporations. When we have a legitimate problem, we always call or write the CEO’s office and explain the issue logically. With the exception of dealing with one American brand automobile manufacturer we have always been satisfied with the outcome. Why waste time dealing with people who are not empowered to make decisions?

Obamacare has been responsible for much of the rising cost of healthcare. The $2500 savings per family was a complete lie. Obamacare was designed to pave the way for government provided healthcare. What has happened since Obamacare was implemented?

1). A huge federal bureaucracy of health care agencies was created and existing agencies expanded. These agencies are entwined with the corporations they are supposed to regulate. The bureaucrats direct research dollars determining the “science” in healthcare. They have politicized medical science by controlling the funding.

2). The consolidation of the health insurance, pharmaceutical, and health care delivery systems into huge corporations. These corporations, along with their allied government bureaucrats determine how health care will be delivered, what type of assembly line health care the masses will receive, the cost of health care, and the quality (or not) of healthcare.

3). The end of patient centric individualized care. Local doctor offices have been gobbled up by hospital chains, ending the freedom of the physician to look at each person as an individual case with unique conditions. Today physicians are employees who follow the formulaic treatment regimens determined by big hospital chains, big insurance companies, and Big Pharma. Specialist look at conditions individually and there is no wholistic view of health. The billions of dollars Big Pharma uses to influence government, hospital systems, Congress, and doctors results in high cost prescription drugs being used for almost any condition instead of lower cost and often more “healthy” natural cures or low cost medication no longer under patent.

Obamacare has put in place the politicized bureaucratic structure for socialized medicine, and has made the health care system so complex and costly for the average citizen the country is almost ready for the next step — a complete government takeover of the system. As the system becomes unaffordable for average citizens, politicians on the left will begin demanding the government take it over. We no longer have a free market for medical care and most citizens with memories of inexpensive personalized healthcare are dying off. Faced with the choice of the current Obamacare spawned dysfunctional and expensive system and a government controlled system, the people will embrace the chains of socialism.

Healthcare and insurance costs were rising long before Obamacare. The three primary forces are, in no order:

Trial lawyers, frivolous suits and huge payouts
MBAs who turned medicine into a cash cow at the expense of care
Government meddling and edicts (price fixing)

I served a 40 sentence in healthcare as a provider of services and hands on care.

Obamacare would have been the death of healthcare had it not been partially rolled back. It was never meant to address costs or quality of care. It was designed to collapse the system so government could wholly take over.

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