Patients suffer at hands of insurance companies

OPINION – There is a brewing crisis in Orange County, one where the most vulnerable — seniors with disabilities, single mothers, families living below the poverty line — have lost access to vital health care services.

The focus for all involved right now must be on patients — those who are facing upheaval, worse health outcomes, farther distances to travel for care, and a much greater burden on their families. For these vulnerable Californians, their worst fears have come true.

As one patient wrote, “I recently turned 76 and I suffer from COPD and find myself going to West Anaheim Medical Center at least three times a year. I was told West Anaheim Medical Center may not be able to take CalOptima insurance anymore and that has me extremely scared. I am unable to drive, and I live just two blocks from West Anaheim Medical Center so I’m able to walk to the hospital when I’m having issues.”

This shouldn’t be happening in California, and it doesn’t have to.

Here’s what’s going on: CalOptima, the Medi-Cal managed care insurer in Orange County, has eliminated four key safety net hospitals — those that care for people experiencing homelessness, substance use disorders, chronic health conditions, and more — from its network. This abrupt change was made with little notice and took effect on Monday, Feb. 5. Whatever the reason CalOptima has for dropping these hospitals, we do know that this is being done by an insurer that is holding tight to a nearly $700 million surplus that the State Auditor has reported should be used for patient care and expanding access.

Unless this situation is resolved quickly, everyone in Orange County — not just those covered by CalOptima — will face significant challenges in accessing the health care they need and deserve. With CalOptima cutting off access to these four hospitals, the burden of caring for Orange County’s most vulnerable patients is now shifting to remaining local hospitals, at a time when they are already challenged with limited emergency department and inpatient capacity. This unnecessary barrier will lead to harmful delays in access to medically necessary care and to additional overcrowding in emergency departments.

Orange County is not alone in facing this access to care crisis. In December, as the Central Valley was facing a massive spike in respiratory illnesses — COVID, flu, and RSV — key insurance companies abandoned their responsibility to patients, denying patient transfers, delaying responses to doctors, failing to sustain an adequate number of skilled nursing facilities to accommodate patients, and more.

In that situation, state regulators stepped in to demand that those insurers meet their obligation to patients. Regulators should do the same in Orange County and avert the crisis before patients suffer.

This is a larger problem, and one that will grow in the coming months and years. Across the state, insurance companies like CalOptima that continue to deny medically directed care are booking record profits while patients are left in the lurch.

A 2023 survey revealed that some 4,500 patients every day remain in California hospitals and emergency rooms despite being medically cleared for discharge. Patients in managed care plans are left hanging far more often than those with fee-for-service insurance coverage.

The cause of this problem: insurance company delays or denials of authorization for care.

The outcome of this is that every year, hospitals provide an estimated 1 million days of unnecessary inpatient care due to discharge delays, and 7.5 million hours of unnecessary emergency department care. This directly contributes to at least $3.25 billion in avoidable health care costs every year.

It’s time for state regulators to take action to preserve access to care for Orange County’s most vulnerable patients.

And it’s time for insurance companies in the state to put patients over premiums and reaffirm their commitment to the lives entrusted to them.

Carmela Coyle is President & CEO of the California Hospital Association