How Health Insurance Companies Turn Claim Denials Into Shareholder Returns
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What is the main topic discussed in this episode?
Massive, publicly traded financial services institutions, healthcare insurance companies. You pay a monthly premium, they decide which care you get. Publicly traded companies have one goal in mind, and that's to maximize shareholder value.
It's their legal obligation.
110 to 130 million Americans a year face some type of denial. They might have said not medically necessary. They might have said experimental or investigational. Okay. Feels like a David versus Goliath kind of situation here. You have the law on your side, though, which is something they don't have.
Thank you.
What's up, everyone? I'm your host, Vivian Tu, aka your HBFF and your favorite Wall Street girly. And today we are back on Net Worth and Chill to talk about something that has genuinely made me so angry the more I've learned about it. Health insurance. Specifically, what happens when you actually try to use it? Because you pay your premiums every single month, but the moment you need your insurance to show up for you, they find every reason to say no. And most of us just accept it. We get the denial letter. We feel defeated. We pay the bill and we move on. But my guest today is here to tell you that is exactly what they are counting on. Zach Vegelis is the co-founder and chief AI officer at Claimable, an AI-powered tool that helps everyday patients fight back against insurance denials, and he knows the system inside and out.
We're getting into the villain origin story of health insurance, why claims get denied, and how to actually appeal one and win. This episode is genuinely one of those that you are going to want to send to every single person in your life. Okay, Zach, thank you so much for being here.
Yeah, thanks for having me.
We are going to have such a great conversation. But before we can talk about health insurance today, I want you to kind of give me the villain origin story of health insurance. When did it start? What was it initially intended to do? What did it turn into?
Sure. Yeah, definitely. I mean I don't think anybody had intended for it to start and end up like it looks like today. So back in the Great Depression, so almost 100 years ago, hospitals were struggling to get paid and consumers were struggling to afford health care or really anything at all. So what a system down in Texas, Baylor, started doing was offering Dallas area teachers the ability to pay 50 cents a month for access to hospital services. which was a win-win. So it was a cheap access to care for teachers and the hospital system had predictable revenue. Now, what it's turned into since then is really these massive publicly traded financial services institutions that call themselves healthcare insurance companies.
And so now what happens is you pay a monthly premium to one of these companies and then they decide which care you get, what care you get. Now, that's problematic because publicly traded companies have one goal in mind, and that's to maximize shareholder value.
It's their legal obligation, not just they want to. They have to.
Their legal fiduciary responsibility, legal obligation to maximize shareholder value. So what does that mean? It means maximizing profits. So the incentives have completely shifted from, hey, accessible health care for the average consumer, predictable revenue for health care systems into there's a third party now that is dictating your care. And so what happens is there's about five billion medical claims a year in the United States. About 20 percent, around a billion of those are denied and less than a million are appealed. So in summary, the system is working exactly as it's designed. It's just really not patient friendly.
What was the moment that like that actually changed? Because it sounded like they had a great system in – Baylor had that great system. Were little healthcare insurers popping up throughout the country like one in Florida, one in California, like all of these things? And then they tried to nationalize and it just didn't work?
That's exactly right. So in the 1970s, there started – I mean basically what happens after the Great Depression, the tax code changed to where they were incentivizing employers to essentially sponsor health insurance for people.
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Chapters
5 chapters
1
What is the main topic discussed in this episode?
0:00–7:55
2
What is the villain origin story of health insurance and how did it evolve into profit-driven insurers?
7:55–13:46
3
How common are denials and why do insurers rely on patients not appealing?
13:46–27:40
4
Why do health insurance claims get denied and what do terms like 'not medically necessary' actually mean?
27:40–42:01
5
What exact steps should you take immediately after receiving a denied claim?
42:01–44:20
Speakers
2 identifiedMore from Networth and Chill with Your Rich BFF
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