January 28, 2023


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Delaware Insurance Companies Fined 1.3 Million Dollars For Denying Mental Health Claims

DOVER, DE- Health insurance companies in Delaware Monday were hit with 1.3 million dollars in fines for refusing coverage on mental health drugs and services.

The fine came on the 31st anniversary of the Americans With Disabilities Act, which ensured disabled people in the US would not receive poorer quality of life care and service as a result of their disability.

The fines were part of a nearly two-year-long Delaware Department of Insurance market conduct investigation into
complaints from policyholders who reported their insurance for unequal coverage of mental health medication and services. 

“We knew these violations were occurring we knew that insurance companies were not fulfilling their obligations typically you only find that out by speaking to consumers,” said DOI Commissioner Trinidad Navarro.

That investigation found four major insurance groups; Cigna, Aetna Highmark Blue Cross Blue Shield, and United Healthcare repeatedly provided unequal coverage for drugs or services for those with mental health issues more frequently due to the higher costs associated with the care.

Insurance Commissioner Navarro believes that the denials were part of a strategy from the insurance companies to boost profits by not paying for relatively higher price medication and services, knowing that many claims would not be disputed.

“Insurance is for-profit and here it’s putting shareholders over policyholders,” he said.

The DOI was able to levy the fines due to SB230, a bill passed in 2018 that made it against state law to deny health coverage based on criteria such as the type of care.

“We know that for far too long mental health and substance abuse has carried a heavy stigma and because of the perception is not treated the same as physical health,” said Delaware Lt. Gov. Bethany Hall-Long.

Lt. Gov Hal-Long advocated for SB230 as part of the Delaware HealthCare consortium.

She believes the fine will put pressure on the insurance companies to change their practices.

“When you hear fines you don’t always think it’s a good thing but we are trying to push the Health Insurance community in the right direction,” she said.

Commissioner Trinidad Navarro told 47ABC they’re also doing more than just fining companies.

“Each year the DOI through the arbitration process recovers around a million dollars on average helping people,’ he said.

He wants people to know that the DOI will handle health insurance disputes or claim denials, helping to even the power discrepancy between insurance companies and policyholders and that they don’t have to settle for higher-priced, discriminatory rates.

He said in cases where higher prices were paid as a result of the claim denial, the DOI was able to recoup the lost funds with interest for the amount of time the policyholder was paying the higher rate.

“It shouldn’t have to be that way, this is why we have regulators in every state,” Navarro said.