Napa, CA – In recent years, stories of families battling insurance companies over denied medical claims have become all too familiar. One such case, which unfolded over a span of five years, involved Colleen Henderson, a mother whose 3-year-old daughter experienced severe bladder pain. Initially dismissed by doctors as a urinary tract infection or constipation, it wasn’t until Henderson insisted on an ultrasound—paying out of pocket for the $6,000 procedure—that the child’s grapefruit-sized tumor was discovered in her bladder. This rare condition, known as inflammatory pseudotumor, led to a lengthy fight against her insurer, UnitedHealthcare, which deemed many of the recommended treatments unnecessary, despite doctors’ advice.
As Henderson navigated this complex healthcare ordeal, her family accumulated over $1 million in medical debt. Despite their appeals to the insurance company and state regulators, they were unable to get sufficient support. Ultimately, the Henderson family was forced into bankruptcy. Reflecting on the experience, Henderson remarked, “If I had not fought tooth and nail every step of the way, my daughter would be dead.”
This battle is not an isolated case. Insurance denials are rising across the nation, and according to surveys, few Americans pursue appeals, often out of frustration or a lack of awareness that they could have a chance at overturning the decisions. Recent data reveals that in California, nearly three-quarters of appeals brought before the Department of Managed Health Care result in the insurer’s initial denial being reversed. Despite this, there is little transparency around the frequency of such denials, particularly when it comes to the sensitive area of mental health care.
In response to this growing issue, California lawmakers have introduced Senate Bill 363 (SB 363), a proposal that aims to hold insurance companies more accountable for unjustified denials. The bill, introduced by Sen. Scott Wiener (D-San Francisco), would require private insurers to disclose their denial rates, the reasoning behind those denials, and the outcomes of subsequent appeals. If more than half of the appeals against an insurer’s decisions are overturned within a year, that company would face penalties up to $1 million per case.
This initiative has been hailed by consumer advocates and mental health experts who argue that insurers frequently refuse to cover medically necessary treatments. Lishaun Francis, senior director of behavioral health for the advocacy group Children Now, which supports the bill, noted the urgency of addressing these issues as the mental health crisis among children and young adults escalates.
SB 363 is poised to affect about 12.8 million Californians, specifically those covered under private health plans regulated by the state. However, it would not apply to patients on Medi-Cal (California’s Medicaid program), Medicare, or self-insured plans offered by large employers, which are regulated federally.
The bill’s primary goal is to create more transparency and accountability in how insurance companies make coverage decisions. While the California Association of Health Plans has declined to comment on the bill as it is still under review, experts and policymakers believe it represents a bold attempt to curb the widespread practice of denying necessary care.
The frustration with insurance companies’ refusal to cover treatment extends beyond physical health. Sandra Maturino, who adopted her niece after her sister’s death, faced her own insurance battle with Anthem Blue Cross. Her niece, who struggled with self-harm and violent behavior, was repeatedly denied coverage for long-term psychiatric care. Despite doctors’ recommendations for extended treatment, the insurer would only approve 30-day stays. Eventually, Maturino arranged for her niece to receive care in Utah through an adoption agency, but this came at a steep price.
Maturino said she did not have the energy to fight the insurer any longer, especially when she feared for her niece’s safety. “I wasn’t going to wait around for the insurance to kill her, or for her to hurt somebody,” she stated.
As California moves forward with SB 363, it joins a growing number of states addressing the issue of insurance denials. Last year, 17 states passed laws related to the prior authorization of medical care by private insurers. In Connecticut, for example, insurers are required to publish annual reports detailing the percentage of claims denied and how many were later overturned.
Experts like Keith Humphreys, a Stanford University health policy professor, argue that insurers have financial incentives to deny coverage. “The more care they deny, the more money they make,” he explained, underscoring the need for more stringent regulations to protect consumers.
The proposed bill in California may serve as a model for other states seeking to tackle the issue of insurance denials and the rising costs of healthcare. With medical debt continuing to drive families into bankruptcy, lawmakers are under increasing pressure to ensure that insurers put the well-being of their customers at the forefront of their decision-making processes. As insurance companies face increasing scrutiny, California’s proposed legislation could mark a significant step toward a more transparent and accountable healthcare system.