Rationing by Inconvenience: How Insurance Denials Induce Administrative Burdens

How do health coverage denials keep care out of reach for American patients by imposing unevenly distributed administrative burdens? This article argues that the process of appealing insurers' denials imposes administrative burdens on patients inequitably, deepening the divide between those with meaningful access to health coverage and those for whom benefits are out of reach.

The author conducted a nationwide survey of 1,340 US adults on their experiences with coverage denials; this was supplemented with 110 semistructured interviews with patients, physicians, and former health insurance executives.

Those who were less affluent were significantly less likely than their wealthier counterparts to appeal denials of coverage. Patients who underestimated the rate at which patients prevail in insurance appeals were less likely to appeal their own denials. Black Medicaid patients and those who were in worse health were significantly less likely to prevail in the appeals they pursued. Many unappealed denials were attributable to the significant administrative burdens associated with appeal, including learning and psychological costs.

Administrative burdens associated with appealing denials of coverage can deepen health inequities along class and race lines, suggesting a need for policy interventions to make it easier to navigate the health insurance bureaucracy.