Health insurance barriers are a uniquely American experience arising from decades of political choices pushing the United States toward increased privatization of health insurance. Despite notably high health care spending, many Americans face coverage denials and delays, which are a little-discussed dimension of underinsurance. These coverage barriers arise out of managed care practices such as prior authorization, or required health insurer pre-approval for prescribed care. This practice proliferated as American health reform efforts accelerated reliance on privatization, in which health insurers seek to not only contain costs but maximize profits. Tracing the history of health reform and successive choices favoring managed care, this chapter shows that Americans’ everyday struggles with their health insurers are actually the product of intentional political choices that keep care out of reach. Assessment of medical necessity is likewise political and allows for insurer discretion that impedes patients’ access to care. However, rather than containing costs, prior authorization can ultimately shift costs from insurers to patients (especially marginalized patients) and their physicians.

Drawing on survey and interview evidence, this chapter explores the effect of coverage denials on patients’ health and economic security. Most Americans report an inability to pay an unexpected $1,000 bill, so, with notably expensive health care, denials can be devastating. Too often, when coverage is denied, patients abandon their treatments, a dynamic shown not only through physician surveys, but also through original survey evidence of patients, half of whom reported delaying or abandoning their prescribed care. Further, the people most likely to do so are typically Black or Hispanic or less affluent, and nearly half of patient respondents reported that their health condition declined. In fact, some patients may not survive at all. Marginalized patients are also more likely to postpone non-medical purchasing to accommodate unexpected health insurance barriers, suggesting the far-reaching consequences of prior authorization. The evidence shows not only that tools of managed care produce frequent coverage denials, but also that this practice shifts risk from insurers to patients, yielding new health and economic insecurities, especially for patients from marginalized backgrounds.

Administrative burdens from coverage delays and denials are hardly isolated to patients. In fact, physicians bear many of the costs of not only learning what is likely to be covered under their patients’ health plans, but also helping patients to appeal denials. This can elicit substantial frustrations because “peer to peer” processes are not closely regulated by states, such that cases are reviewed by physicians in inappropriate specialties. What’s more, prior authorization burdens can require substantial staffing to administer – staffing that less well-resourced practices may not be able to support. Thus, there are inequities not only in patient experiences of denials and their subsequent health care access, but also across medical practices, the effects of which can trickle down to their patients. Drawing on interviews with physicians across the country, this chapter highlights the ways that the tools of managed health care – while aiming at cost containment and guarding against overutilization – can lead to physician administrative burden, underprescribing to avoid further burden, and even contribute to the public health crisis of physician burnout.

The assassination of UnitedHealthcare CEO Brian Thompson generated nationwide discourse about delays and denials of coverage by private health insurers. Many denials are driven by managed health care practices such as prior authorization, or required insurer pre-approval for prescribed care. These denials can destabilize American patients, who are forced to endure a substantial “time tax” and administrative burdens of appealing, which some patients can more successfully navigate than can others. This book was also inspired by the author’s personal experience being denied coverage by a health insurer while conducting a postdoctoral fellowship, which highlighted that, even with academic fortune, these processes can be destabilizing to one’s financial, health, and emotional wellbeing. While scholars had examined administrative burdens and time taxes in the setting of navigation of government programs, this framework had not been extended to the setting of privatization, in which many of these barriers also can be identified and are highly consequential. This exploration of health and economic inequities driven by health insurance barriers and administrative burdens seeks to do just that.

It is difficult to know exactly how many coverage denials there are because the American health care system is notoriously fragmented. This chapter introduces a novel survey of 1,340 US adults, finding that 36 percent of respondents have been denied at least once, and typically experience multiple denials. Those in private health insurance experience denials to the greatest degree, which is consistent with private insurers’ cost containment objectives. Health care can be denied for any number of reasons, such as the lack of medical necessity, the absence of a required prior authorization, or an assessment that the care is experimental or investigational. Combining survey and interview evidence, the chapter highlights the destabilizing impact that denials – whether pre-treatment (as with prior authorization) or post-treatment (as with emergency care) can have on patients, whose trust in the health insurance system can be shaken. While prior authorization and other coverage denials can constitute important ways to guard against overtreatment in the American health care system, this chapter presents new evidence that managed care tools may overcorrect, instead denying appropriate care.