Low-income patients face uphill battle when fighting health insurance denials, Umass research finds

Study finds low-income patients face uphill battle fighting health insurance denials: ©Stuart Miles - stock.adobe.com

Low-income patients are more likely to have their health insurance claims denied and less likely to successfully challenge those denials than higher-income individuals, according to a study led by researchers at the University of Massachusetts Amherst.

The research, published in the journal Health Affairs, found that patients from households earning less than $50,000 a year—as well as the health care providers who serve them—are significantly less likely to contest denied claims than those with higher incomes. And when they do challenge these denials, they are less successful in reversing them.

“People with higher income are more likely to have a denied claim reversed and consequently their cost sharing reduced,” said Michal Horný, assistant professor of health policy and management in the School of Public Health and Health Sciences at UMass Amherst.

The new study adds to a growing body of evidence that structural inequities in the U.S. health care system are affecting access to and affordability of even basic medical care, especially for historically marginalized populations. It builds on Horný’s previous research, which showed low-income patients were 43% more likely than high-income patients to face claim denials for preventive services, such as screenings for cancer, diabetes, cholesterol, and depression, as well as contraception and wellness visits.

“Our new findings further exacerbate the disparity that we established initially,” Horný said. “We added the next step that not only are low-income people most likely to experience a denial, but they’re least likely to have it contested.”

In the latest study, Horný and co-author Alex Hoagland, a health economist at the University of Toronto, analyzed 51,299 denied claims for medical services provided to U.S. adults with private health insurance between 2017 and 2019. The dataset included detailed demographic information, allowing the researchers to identify disparities in both the rates of claim denial and the outcomes of subsequent appeals.

The study found that historically marginalized racial and ethnic groups were generally less likely than non-Hispanic Whites to contest claim denials. However, when they did challenge denials—or when their health care providers did so on their behalf—they were more likely to be successful. Despite this, the mean reduction in cost-sharing following a successful appeal was still lower for Black and Hispanic patients than for White patients.

“It is possible that minority patients were more likely to experience barriers to initiating a claim resubmission or reprocessing, including having access only to under-resourced health care providers, explicit or implicit bias, or structural racism,” the study notes. “It is also possible that some minority patients chose to contest only claim denials that were unequivocally wrong, and thus contesting them had a high chance of success.”

The researchers found no association between a patient’s level of education and either the likelihood of contesting a denial or the success rate of those challenges.

Another finding: about 40% of all denials were due to billing errors by health care providers or processing mistakes by insurers—a reminder that many denials are not based on medical necessity or policy rules, but administrative mishaps. Yet the burden to resolve them often falls on patients or time-strapped health care practices.

“When we launched this research, our mindset was that this is driven by the patient—that after receiving a letter from the insurer that the health plan is not going to pay for it, the patient would call the insurer and try to get the decision reversed,” Horný said. “But we realized that it actually can be driven by health care providers as well, because for health care providers it’s much easier to get money from a big company than from chasing many small amounts from many patients.”

Horný said the study highlights a systemic problem that needs regulatory intervention.

“We need regulators to demand health insurance companies be more user-friendly and allow people to contest a claim by filling out an online form 24/7, whenever they have the time to do it,” he said.

For under-resourced providers who often serve low-income and minority patients, Horný recommends simplifying the claims process by implementing universal billing codes across all insurers—a change that could reduce errors and ease administrative burdens.

“Our findings documented considerable administrative burden even for common, high-value health services, where unexpected bills continue to persist with an outsize effect on minoritized groups,” the study concludes.

Horný and Hoagland say the implications of the research go far beyond billing disputes: they point to systemic inequities in access to health care and the ability to navigate insurance processes. As policymakers and regulators consider reforms, the researchers urge that attention be paid to reducing administrative complexity and making the system more equitable.

“There are too many roadblocks for those who already have the least time, money, and support to deal with them,” Horný said.