Insurers face fines for high medical claim denial rates

What does this do?

This bill sets a limit on how often health insurers can deny medical claims. Insurers who deny 25% or more of valid claims — not counting fraud or truly unnecessary care — face fines starting at $10 million, plus $2 million for each percentage point above that threshold. The money collected goes back to the people enrolled in that insurer's plan during the year the violations happened. The bill also requires insurers to explain their medical necessity rules upfront and tell patients specifically why a claim was denied, and to report their denial rates to the government each year.

Who does it affect?

This affects people with private health insurance, whether they get it through a job or buy it on their own. It also applies to the insurance companies that sell those plans.

Why does it matter?

Insurers who deny too many claims would face large financial penalties. Patients who were enrolled during a violation year would receive a share of the money collected from those fines.

What does it cost, and who pays?

• $10M fine at 25% denial threshold
• +$2M per point above 25%
• Fines repaid to that year's customers