Lack of insurance coverage, high costs, and poor outcomes are well-documented problems in the US health care system, and policies to address them have been hotly debated for decades. However, complexity is another underappreciated problem that hinders access and affordability and is more difficult to quantify.
A recent survey by KFF, with support from the Robert Wood Johnson Foundation, provides some hints at the scope of the problem for US consumers with various types of health coverage. Findings from interviews with a nationally representative sample of 3605 privately and publicly insured adults reveal that many are perplexed with their health care plans.
Almost 6 in 10 people with insurance reported a problem with using their health insurance during the past year. The share increases to two-thirds for people in fair or poor health, three-fourths for those who need mental health services, and almost 8 in 10 for people who use the health system the most. The result is that many delay or skip care or accumulate bills they cannot afford.
Problems vary somewhat by type of coverage, with difficulties generally less prevalent in Medicare than in private insurance, but at least half of those with any of the 4 major types of health insurance (employer-provided, Medicare, Medicaid, or from the Affordable Care Act [ACA] marketplace) said they had a problem using their coverage during the past year. The issues ranged from the most basic, such as not getting an appointment with a physician covered by their plan, to discovering that their medications are not covered or being denied prior authorization for care recommended by their physician. Of those who reported insurance problems, 15% said their health declined as a result. More than one-quarter of those who reported problems say they had to pay more for their care.
To be sure, these are problems perceived by consumers, and the insurance company may or may not be at fault. Sometimes care is unnecessary even when a clinician recommends it, and a patient believes that it is needed. And sometimes consumers or their clinicians do not quite follow the rules.
But the reality is that many people are hopelessly confused by how their insurance works. About half of consumers say they do not understand some aspect of their coverage, including about one-third who do not understand what costs their plan covers or what costs they will owe.
For public programs including Medicare, Medicaid, and the ACA marketplace, the complexity also extends to signing up for coverage. For example, millions of people are now being disenrolled from Medicaid as the process for redetermining eligibility resumes after being paused during the COVID-19 public health emergency. Some individuals are no longer eligible for Medicaid, but about three-quarters have been terminated for “procedural” reasons, meaning they have been tangled in red tape or unable to be reached, and it is unknown whether they are still eligible for the program.
In Medicare, beneficiaries can now choose from an average of 43 private Medicare Advantage plans, and during open enrollment season, the airwaves are flooded with ads that may do more to confuse than illuminate. And people getting ACA coverage through healthcare.gov have a choice of more than 100 plan options on average. Choice in health care is generally believed to be a positive feature, but the complexity of too many choices can also lead to paralysis on the part of consumers or suboptimal decisions.
The idea of making the health care system simpler and more transparent certainly sounds good, at least in concept. Who could disagree with the principle that everyone should be able to learn which physicians and hospitals are in their network and taking patients, or that patients should get easily understandable explanations of benefits, statements, and medical bills? And does anyone want an artificial intelligence algorithm to deny claims without any review by real medical professionals?
Yet, any push for health care simplification inevitably clashes with commercial interests. The health insurance system is structured to simultaneously maximize profits, control costs, and serve consumers, which are competing goals that add to the challenge of simplifying it. For instance, limiting denials of claims or prior authorization requests will make the system more consumer friendly, but could also raise costs and might lead to care that is less grounded in evidence.
Although mechanisms already exist to protect patients and consumers, oversight and enforcement has been uneven. A federal law passed in 2021 requires private insurers to keep clinician directories up to date even though regulations implementing that requirement have not yet been issued. Private insurers are already required to give consumers clear explanations of benefits and provide notices of denied claims in a way that it is understandable, but any patient who has received them knows they can still be quite confusing.
Consumers have the right to appeal denials of claims, but the KFF survey found that 60% do not know they have that right, and 76% do not know the government agency to contact for help in dealing with insurance problems. People who work for companies with well-staffed human resources departments may have access to help in navigating the health insurance maze, but others are largely on their own.
To get health care, people do persevere. In the KFF survey, about half of those who had a problem said they ultimately were able to resolve it and receive care. But what about the other half? What happens the next time, and at what personal and family cost?
Health care simplification does not necessarily resonate in the same way as rallying cries for universal coverage or lower health care prices, but simplifying the system would address a problem that is frustrating for patients and is a barrier to accessible and affordable care.
The regulatory structure largely already exists to require explanations of benefits that make sense to consumers, clinician directories that are accurate, and rights to appeal when claims are denied. What is missing is effective enforcement of these requirements and support for consumers (especially those with serious and chronic health conditions) to comprehend and navigate the complex labyrinth the US health insurance system has become.
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Article Information
Published: October 26, 2023. doi:10.1001/jamahealthforum.2023.4430
Open Access: This is an open access article distributed under the terms of the CC-BY License. © 2023 Levitt L et al. JAMA Health Forum.
Corresponding Author: Larry Levitt, MPP, KFF, 185 Berry St, Ste 2000, San Francisco, CA 94107 (larryl@kff.org).
Conflict of Interest Disclosures: Dr Levitt reported receiving grants from the Robert Wood Johnson Foundation. No other disclosures were reported.
