Patient Refunds for Bad Denials Act Aims to Reform Health Insurance Claims

U.S. Representatives Pat Ryan and Angie Craig have introduced the "Patient Refunds for Bad Denials Act," aiming to mitigate high claim denial rates by health insurers and ensure financial restitution for affected patients. This legislative measure proposes financial penalties on insurance companies with claim denial rates exceeding 25%, as monitored by the Department of Health and Human Services (HHS). Starting at $10 million, these penalties include an additional $2 million for each percentage point over the threshold, offering refunds directly to policyholders who face denied claims.

Data from HealthCare.gov reveals a wide variance in denial rates for in-network claims related to qualified health plans (QHPs), ranging from 3% to 36% based on factors like insurer and region. A January 2026 Kaiser Family Foundation survey found that a significant number of insured individuals experience claim denials and delays, with one-third having claims denied for necessary medical services or medications in the past two years. Moreover, 40% of those with medical debt attribute their financial challenges to denied insurance claims.

The proposed legislation reflects an intent to hold insurance companies accountable for high denial rates, as emphasized by Rep. Ryan, aiming to rectify perceived inequalities within the system. Rep. Craig underscores the necessity for enhanced accountability, advocating for financial relief for policyholders facing denied claims and related medical costs. This initiative is part of a broader push to reform the health insurance market by addressing systemic issues, enhancing consumer protections, and ensuring better access to healthcare services.