What to do if insurance denies medication?

Oscar Health denied the highest percentage of in-network claims nationally among major national ACA marketplace insurers, rejecting 25.3% of claims in 2024.

Highest Denying Insurers (ACA Marketplace)

Based on federal data compiled by KFF and CMS, national health insurance companies show varying initial denial rates:

• Oscar Health: 25.3% denial rate
• Molina Healthcare: 22% denial rate
• Ambetter (Celtic): 21% denial rate
• Guidewell (Florida Blue parent): 22% denial rate
• Cigna: 21% denial rate
• UnitedHealthcare: 20% denial rate (down from 33% previously)
• Kaiser Permanente: ~6% denial rate (the lowest among major options)

Note: The national average for in-network ACA marketplace claim denials sits at 19.1%. Self-funded employer plans (ERISA) are not required to publicly report these numbers, meaning total volume across all private insurance is much higher.

Why Claims Get Denied

Insurers frequently categorize rejections under broad or administrative terms:

• Vague / Other reasons: 36%
• Administrative reasons: 25%
• Excluded services: 13%
• Lack of prior authorization: 9%
• Member not covered: 7%

Yes, you can sue a health insurance company for not covering a medication, but you usually must complete the internal and external appeals process first.

When You Can Sue

• Breach of Contract: The insurer failed to provide the coverage promised in your policy agreement.
• Insurance Bad Faith: The company acted dishonestly, unreasonably delayed a decision, or denied a clearly valid and medically necessary claim on purpose.
• Damages: You experienced physical harm, worsening health, or financial loss because of the unfair denial.

Steps to Take Before Suing

1. Request an Exception: Ask your health plan for a formulary exception if the drug is not on their approved list. Your doctor must show it is medically necessary.
2. File an Internal Appeal: Ask the insurance company to review its denial in writing, usually within six months of the notice.
3. Request an External Review: Ask an independent third party to look at the case if the internal appeal fails.
4. Exhaust Administrative Remedies: Courts often throw out lawsuits if you did not finish the appeal steps required by your plan.

Alternative Steps and Tips

• Learn more about handling a rejected prescription through GoodRx.
• Talk to a legal professional because rules vary greatly depending on whether your insurance is through a private plan, a state marketplace, or an employer-sponsored plan governed by federal law.

Doctors often recommend getting rid of or avoiding specific over-the-counter and routine medications because new evidence shows they are ineffective or carry unnecessary risks.

Based on recent medical guidance highlighted by physicians (such as recent recommendations featured by the Washington Post), here are 5 medications doctors frequently advise reconsidering or dropping from your medicine cabinet:

1. Oral Phenylephrine

• What it is: A common oral decongestant found in many over-the-counter cold, flu, and sinus products (like certain versions of Sudafed PE or DayQuil).
• Why doctors say to avoid it: The FDA determined that oral phenylephrine is completely ineffective as a nasal decongestant.
• What to do instead: If you need a real oral decongestant, ask a pharmacist for pseudoephedrine from behind the pharmacy counter, which actually works.

2. Diphenhydramine (Benadryl)

• What it is: A first-generation antihistamine widely used for allergies and sleep.
• Why doctors say to avoid it: Especially for adults over 65, it causes severe side effects like heavy daytime grogginess, confusion, high risk of falls, and trouble urinating. Chronic use has also been linked to cognitive decline.
• What to do instead: Switch to newer, safer second-generation antihistamines like loratadine (Claritin) or cetirizine (Zyrtec).

3. Daily Low-Dose Aspirin (for Primary Prevention)

• What it is: Taking a daily aspirin to prevent a first heart attack or stroke.
• Why doctors say to avoid it: Updated guidelines advise against starting daily aspirin if you have never had a cardiovascular event, because the risk of dangerous stomach bleeding often outweighs the preventative benefits. (Note: If you already take it under strict doctor's orders for an existing heart condition, do not stop without talking to them).
• What to do instead: Talk to your physician to re-evaluate your personal risk factors and see if a daily aspirin is still appropriate for you.

4. Docusate Sodium (Colace)

• What it is: A widely sold over-the-counter stool softener.
• Why doctors say to avoid it: Robust clinical trials have shown it is largely ineffective as a standalone treatment for constipation.
• What to do instead: Increase your intake of water and try a natural fiber supplement or osmotic laxative if recommended by your care team.

5. Old Codeine Cough Syrup

• What it is: Prescription opioid-based cough medicine kept in home medicine cabinets.
• Why doctors say to avoid it: Studies show codeine cough syrup performs no better than a placebo for suppressing coughs, but carries serious risks of dependence, accidental misuse, and dangerous slowed breathing.
• What to do instead: Safely dispose of leftover prescription narcotics through a community drug take-back program.

A "red flag" at a pharmacy is a warning sign that suggests a prescription may not be for a legitimate medical purpose or could involve abuse, forgery, or drug diversion.

Pharmacists are legally required to spot, investigate, and resolve these warning signs before they fill a controlled substance.

Common Types of Red Flags

• Patient and Behavior Signs
  • Traveling long distances past multiple other pharmacies to get to a specific doctor or pharmacy.
  • Paying entirely in cash for high-risk controlled substances.
  • Requesting early refills consistently or claiming medications were lost or stolen.
  • "Doctor shopping," or using multiple different doctors and pharmacies to get similar controlled drugs.
• Prescription and Drug Combination Signs
  • Prescriptions for dangerous drug cocktails, such as the "Holy Trinity" (an opioid, a benzodiazepine like xanax, and a muscle relaxer like carisoprodol).
  • Unusually large quantities or high daily strengths.
  • Identical prescriptions written for multiple unrelated patients coming from the same doctor on the same day.
• Prescriber Signs
  • Doctors who write an excessive volume of controlled substance prescriptions, sometimes called "whales".
  • Prescribers located far away from the patient's home address with no clear reason.
  • Prescriptions that show signs of physical alteration, photocopying, or suspicious handwriting.

What Happens When a Prescription Is Flagged?

A red flag is not an automatic refusal to fill. Instead, it triggers a legal duty for the pharmacist to perform due diligence. They may check the state’s Prescription Drug Monitoring Program (PDMP) database, talk to the patient, or call the prescribing doctor to verify the diagnosis and document their clinical reasoning. You can read more about legal standards and requirements on the Pharmacy & Healthcare Legal Blog.

Insurance companies can legally deny medication because health insurance is a binding financial contract governed by state and federal rules that tie coverage to specific policy terms, formularies, and clinical criteria.

Legal Basis for Denials

• Contractual Agreements: Your insurance policy is a contract. It outlines what services and drugs are included and excluded. If a medication is not part of that agreement, the insurer is not legally required to pay for it.
• Formulary Lists: Insurers maintain a drug formulary (a list of approved prescription drugs). FDA approval does not automatically force an insurance plan to cover a medication.
• Policy Limits and Rules: Contracts legally establish caps, quantity limits, and rules like step therapy (trying cheaper drugs first).

Common Legal Reasons for Denial

• Not on the Formulary: The drug is excluded from your specific plan tier.
• Prior Authorization Required: Your doctor must submit extra paperwork proving the drug meets clinical guidelines before the insurer agrees to pay.
• Lack of Medical Necessity: The insurer's medical team decides the drug does not match their internal clinical guidelines for your specific diagnosis.
• Step Therapy Protocol: You have not yet tried and failed a cheaper, preferred alternative medication.

Your Rights and Actions

• Right to Appeal: You have a legal right to challenge a denial through internal appeals and external independent reviews.
• Exception Requests: Your doctor can file a formulary exception with a letter of medical necessity.