I\u2019m old enough to remember when there was no annual open enrollment. You got health insurance through your employer, and unless you changed jobs or had a major life event, you kept the same plan. Year after year. Simple. Stable. Sane.<\/p>\n
Today, we\u2019ve built a multibillion-dollar theater production called \u201copen enrollment\u201d that costs more to stage than many small countries spend on their entire healthcare systems. American healthcare wastes approximately $248 billion annually on excess administrative costs<\/a>, and open enrollment sits at the heart of this hemorrhage. Broker commissions, marketing materials, comparison portals, HR staff hours and the entire infrastructure of manufactured \u201cchoice\u201d siphons money that could pay for nurses, doctors and actual patient care.<\/p>\n The promise was competition. Give Americans annual choices between plans, the thinking went, and market forces would drive quality up and costs down. But here\u2019s what actually happened: We created a system<\/a> in which insurers pay brokers a commission for the employers they sign up \u2014 usually a healthy 3% to 6% of the total premium, potentially $50,000 a year for a midsize company \u2014 incentivizing them to sell higher-cost plans regardless of quality. We built elaborate comparison tools that let consumers agonize over premiums and deductibles while hiding the only number that actually matters: denial rates.<\/p>\n I learned this the hardest way possible. In 2018, my wife battled aggressive breast cancer. We had dutifully chosen our plan during open enrollment, comparing all the metrics the system told us mattered. None of it prepared us for the cascade of denials we\u2019d face when we actually needed care. Necessary medications labeled \u201cnot medically necessary.\u201d Treatments our plan \u201ccovered\u201d suddenly requiring endless appeals and out-of-pocket costs. All that careful open enrollment comparison? Meaningless when coverage really counted.<\/p>\n That experience turned me from victim to builder, starting a company to create free AI tools<\/a> that have helped thousands of patients overturn denials and avoid the endless appeals and out-of-pocket costs that nearly broke us. Through this work, I\u2019ve seen how technology could genuinely improve healthcare outcomes. But instead of investing in innovations that help patients and caregivers, we\u2019re burning billions on an annual ritual that mainly helps insurance companies obscure how poorly their products serve consumers.<\/p>\n You know what I\u2019ve learned from thousands of cases? The plan you chose during open enrollment is virtually indistinguishable from the one you didn\u2019t choose when it comes to actual claim approvals. The careful comparisons, the HR seminars, the decision tools \u2014 it\u2019s all theater. Despite record marketplace enrollment of over 20 million Americans in 2024<\/a>, denial patterns remain hidden, unregulated and devastating.<\/p>\n The irony of my part in all this isn\u2019t lost on me. I serve on North Carolina\u2019s Steering Committee on Aging<\/a>, where we try to shape policy that actually helps people. But we\u2019re working within a system that treats annual disruption as innovation and administrative complexity as consumer protection. Real choice would mean transparency. It would mean published denial rates for every plan. It would mean stability unless you actively want change. It would mean spending healthcare dollars on healthcare instead of on the packaging.<\/p>\n Here\u2019s what the open enrollment ritual actually accomplishes: It convinces employers they\u2019re doing right by their workers by offering choices. It generates billions in commissions for brokers and marketing revenue for insurers. And it gives Americans the exhausting misimpression that if they just compared plans more carefully, read the fine print more thoroughly or made smarter choices, they\u2019d be protected when they get sick.<\/p>\n They wouldn\u2019t. Because the system isn\u2019t designed to protect sick people. It\u2019s designed to process healthy people\u2019s premiums while creating enough administrative complexity to deny claims when patients need expensive care.<\/p>\n I\u2019ve dedicated my career to fixing<\/a> American<\/a> healthcare<\/a>. The more I learn, the clearer it becomes: Open enrollment isn\u2019t a feature of a functioning market. It\u2019s a symptom of a system that values administrative ritual and profit over human health.<\/p>\n This November, millions of Americans will log into portals and compare plans they don\u2019t really understand, making choices that don\u2019t really matter, in a process that costs billions we don\u2019t really have.<\/p>\n And somewhere, someone will get sick and discover that none of it protected them at all.<\/p>\n Neal K. Shah is a healthcare researcher, chairman of Counterforce Health<\/a> and the author of \u201cInsured to Death<\/a>: How Health Insurance Screws Over Americans \u2014 and How We Take It Back.\u201d<\/p>\n Insights <\/p>\n L.A. Times Insights<\/a> delivers AI-generated analysis on Voices content to offer all points of view. Insights does not appear on any news articles. <\/p>\n Perspectives <\/p>\n The following AI-generated content is powered by Perplexity. The Los Angeles Times editorial staff does not create or edit the content.<\/p>\n Ideas expressed in the piece<\/p>\n Open enrollment represents a costly \u201ctheater production\u201d that annually redirects billions of dollars from patient care toward broker commissions, marketing infrastructure, and comparison tools that ultimately fail to protect consumers. Brokers receive substantial incentives through 3-6% commissions on premiums, incentivizing them to sell higher-cost plans regardless of quality rather than plans best suited for patient outcomes. The illusion of meaningful consumer choice obscures a fundamental reality: plans with different premiums and features deny claims at virtually identical rates, rendering the careful annual comparisons during open enrollment meaningless when patients actually require expensive care. Approximately $248 billion in excess administrative costs flow through the open enrollment system annually, money that could directly fund nurses, doctors, and patient care rather than sustaining a process designed to help insurers obscure poor claim approval practices. Real transparency would mean publishing denial rates for every plan and providing stability unless consumers actively choose change, fundamentally shifting focus from packaging choices to ensuring actual coverage when patients become sick.<\/p>\n Different views on the topic<\/p>\n Administrative expenses as a percentage of total national health expenditures have begun to stabilize rather than continually escalate, representing 7.4% in 2023 for two consecutive years after declining from a peak of 8.3% in 2020, suggesting cost containment efforts may be achieving results[3]<\/a>. Rising administrative costs are increasingly driven by systemic regulatory demands and structural requirements of the multi-payer system rather than open enrollment alone, with compliance obligations, legal services, and facility administration necessitating infrastructure investment that extends beyond broker-related inefficiencies[4]<\/a>. Solutions to administrative complexity can be achieved within the existing competitive framework through improved technology systems, simplified processes, and better stakeholder collaboration across payers and providers rather than requiring elimination of market-based choice mechanisms[1]<\/a>. The broader U.S. healthcare spending challenge extends beyond administrative burden to encompass multiple significant factors including higher pharmaceutical prices, elevated provider wages compared to peer nations, and increased service utilization patterns, meaning administrative reform cannot independently address the full scope of healthcare cost pressures[2]<\/a>.<\/p>\n","protected":false},"excerpt":{"rendered":"I\u2019m old enough to remember when there was no annual open enrollment. 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