Private insurers deny requests for older Americans on Medicare

More than half of requests for post-hospital rehabilitation and long-term care are routinely denied by major private insurance companies operating Medicare Advantage plans, according to a June 11, 2026, report from the Department of Health and Human Services’ Office of Inspector General. The findings indicate that these insurers frequently utilize “prior authorization” to block access to specialized care for older adults recovering from complex medical issues like strokes or hip fractures.

Did You Know? Long-term care hospitals are the most expensive post-hospital setting, averaging $49,000 per stay, compared to $24,000 for a rehabilitation facility, $16,000 for skilled nursing, and $6,000 for home-based care.

How Major Insurers Compare in Care Denials

The Inspector General’s examination of 19 Medicare Advantage plans revealed significant variance in rejection rates among the industry’s largest providers. CVS Health/Aetna, Humana, and UnitedHealth Group—the three largest companies in the sector—recorded some of the highest denial rates for specialized care requests.

CVS Health denied 80% of requests for long-term care hospital stays, while both Humana and UnitedHealth rejected more than 70% of such requests. For rehabilitation facility care, UnitedHealth denied 66% of requests, with Humana and CVS Health/Aetna rejecting more than half. In contrast, smaller Medicare Advantage plans maintained a lower average denial rate of 42% for long-term care requests.

Financial Incentives and Industry Response

The federal report suggests that financial motives may influence these outcomes, noting that for-profit Medicare Advantage plans were more likely to reject service requests than their nonprofit counterparts. Unlike traditional government-run Medicare, private plans receive a set amount of federal funding per patient and can retain higher profits by restricting access to expensive care settings.

Industry trade group AHIP challenged the findings, with spokesperson Chris Bond stating the reports present a “flawed picture” and ignore variations in the cost and quality of care. Aetna defended its practices in a statement, asserting that prior authorization supports “safe, effective, and affordable care” and includes a clear appeals process. UnitedHealth Group representatives pointed to the AHIP response, while Humana did not provide a comment.

Expert Insight: The wide disparity in denial rates suggests that the specific plan an individual chooses can fundamentally alter their access to necessary medical recovery services. Because Medicare Advantage plans are permitted to manage costs through network restrictions and prior authorizations, the pressure to maintain profit margins appears to directly conflict with the immediate clinical needs of patients transitioning out of traditional hospital settings.

Consequences for Families and Future Outlook

The denial of specialized care often forces families to navigate costly and lengthy appeals processes. According to the federal data, Medicare Advantage plans overturned 36% of long-term care hospital denials and 43% of rehabilitation denials upon appeal, suggesting that many patients were initially refused care that was deemed medically necessary.

Families who face repeated denials may be forced to pay out-of-pocket for specialized care, a financial burden that is increasingly difficult to manage. With costs for home care and assisted living rising by nearly 50% between 2019 and 2024, many middle-class households now struggle to absorb these expenses. If denial rates remain high, it is possible that federal regulators could face increased pressure to tighten oversight of prior authorization usage or mandate more transparency regarding how these companies determine medical necessity.

Frequently Asked Questions

What is “prior authorization” in the context of Medicare Advantage?
It is an industry tool used by private insurance companies to vet medical service requests before allowing a doctor or facility to bill for the treatment.

Are denials always final?
No. The report found that Medicare Advantage plans overturned 36% of long-term care hospital denials and 43% of rehabilitation denials when patients appealed the initial decision.

Why do for-profit plans deny more care than nonprofit plans?
The Inspector General’s report suggests that financial incentives may be a driving factor, as private plans are funded with a set amount of money per patient and can increase profits by controlling costs through service denials.

Have you or a family member encountered difficulties navigating insurance coverage for post-hospital rehabilitation?