Claim Denied.

By Jim McVeagh 08/10/2009


Scrubone pointed me to this interesting post on claim rejection rates of American health insurance companies. I will reproduce the table below:

DenialsByInsurer2008

As the NewsBusters site points out, Medicare denies claims at 1.7 times the average rate of insurers (4.05%), with only Aetna being in the same rejection league. In fairness to Medicare, I don’t think this is because they are callous and unfeeling, as NewsBusters tries to make out, I think part of this is likely to be because Medicare have a large number of elderly clients with pre-existing conditions and a large number of indigent client who are more likely to try and claim for cosmetic surgery and the like, simply because they can’t afford it otherwise. Having said that, Medicare does offer a far more basic policy than most Health Insurers and that policy contains far more exclusions than the average. There is a reason why it is “cheap”.

Out of curiosity, I wondered what the rejection rate for ACC claims was. I was stunned to find that it is a mere 1.1%! That is less than a third of the US insurers’ rate and less than a sixth of Medicare.

This puts the sudden increase in refusals for elective surgery in perspective. Even though ACC declines an extra 2500 claims for elective surgery, this was out of a total of 1.5 million claims (one in three New Zealanders, no less), increasing their rejection rate by only 0.1% overall.

Those who are fans of ACC will no doubt think this shows how having a state controlled insurer allows it to engage its clients in a more socially enlightened way. Those of us who are taxpayers will be wondering if this lenient claims process is what is driving the enormous blow-outs in the ACC budget.