A friend I am calling “M” to protect her privacy was diagnosed with breast cancer two months ago. When we met in 6th grade science class, she had a bustling eBay business selling Beanie Babies.
Now she has three young boys, including a two-year-old, and has been a public-school teacher for 19 years. She receives health insurance coverage through her job, and until two months ago she said she loved her insurance. When her cancer diagnosis came, things changed.
Breast cancer rates are increasing among young women, and new research shows that young women diagnosed within three years of childbirth may face even more aggressive disease. With her health insurance, she thought the next steps were going to happen quickly and be straightforward.
But after her diagnosis, she immediately called her health insurance company to ask for breast surgeons in her network, and was told they couldn’t give her that information. She needed to call their “delegate,” an independent group they paid to manage a network of doctors and her care.
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The delegate also declined to give her a list of surgeons and told her to have her doctor request it. Hearing this, and being a physician myself, I called. After nearly an hour on the phone, they eventually gave me a short list of surgeons that I passed along to her.
Friends, family, my patients, and even me, an English-speaking, highly educated physician, have difficulty navigating this complex system of sometimes inscrutable requirements, waiting periods, and specialist referrals.
According to the U.S. Census Bureau, in 2024, 92 percent or 310 million Americans had health insurance for some or all of the year. That same year, 66.1 percent held private health insurance coverage, while 35.5 percent had public coverage, under Medicare and Medicaid.
This is a concern as health insurance premiums are on the rise. On July 31, the 2027 rates for health insurance premiums for all states will be released, with the states released so far showing a median increase of 14 percent, up to a high of 22 percent in Washington state.
In May, Lending Tree released a study showing 36.8 percent of Americans were covered by public health insurance in 2024, with Medicare accounting for $1.1 trillion and Medicaid accounting for $931.7 billion of all U.S. health expenditures that year.
For both public and private health insurance, insurance plans are supposed to be a middleman between patient and health care treatment, a broker working to connect people to the care they need and to make sure that care gets paid for. But insurance companies often rely on a second, or even a third layer (more middlemen) to help them do this.
This is costly, complex, and difficult to navigate, even for an insider like me. Why so many layers? Health insurance companies often pay other groups to handle their administrative functions. While this has been happening for many years, more people are sharing their experiences on social media and awareness is spreading.
Many health insurance plans delegate the responsibility for managing which doctors a patient can see or which services or prescriptions are paid for, essentially introducing a second middleman. Although the ultimate responsibility to manage M’s care still falls to them, her insurance company told her to call the delegate to get information about available breast surgeons.
This experience can be confusing and frustrating to patients trying to get answers, especially with a difficult and time-sensitive diagnosis. And, though delegation has been hailed as a model for more than a decade for cost savings and praised for shifting control back to doctors, there has also been increasing scrutiny on this process. Health plans have incurred fines or sanctions for not adequately overseeing delegates.
Additionally, health insurance companies’ use of vendors is being more closely examined. Health insurance companies may use vendors to determine which care, tests, or medications get approved and paid for, a function called utilization management.
These vendors are an intermediary between the patient and the insurance company and are paid to perform these and other functions. Though the ultimate responsibility of paying for care falls to the health plan, the decision-making happens by another entity.
The vendors are theoretically supposed to be neutral, using evidence and pre-determined care pathways to make determinations. However, the vendors also are paid and make a profit off of the work they do, sometimes making money if they save the insurance company money. So in this way there may be perverse incentives.
While there is some evidence to support the cost savings that occurs with these administrative layers and they are lauded as a way to utilize specialized expertise, the personal experience of navigating health decision-making through these added layers suffers from this complexity. These administrative layers make things more costly for the country’s health care system as a whole. Over 25 percent of all health care costs in the United States go toward administrative functions, wasted. These dollars don’t heal patients.
Though underutilized, pathways exist to help people navigate and advocate for themselves when they find this complex system is not serving them or they’re getting lost between the layers. Patients can file appeals to health insurance companies, their delegates, and even regulatory organizations. Unfortunately, few people take advantage of these pathways for many reasons. They may be unaware, find the process confusing, or simply don’t think it will make a difference.
Plus, significant disparities exist for those who utilize these processes. People with lower incomes and those who identify as Asian, Hispanic, and Black are less likely to use them.
But for the small portion of patients who do appeal to their insurance company, the majority end up getting their care paid for.
I’m keeping my fingers crossed since helping M file an appeal about her care, which is the absolute last thing she needs to think about as she starts chemotherapy soon.
Barbara Rubino is an internal medicine physician.
