Insurers of qualified health plans on HealthCare.gov denied about one in five in-network claims and 37% of out-of-network claims in 2023, according to a new analysis from KFF.
KFF is a nonprofit health policy research, polling and news organization. The analysis looked at data from the Centers for Medicare and Medicaid services, including 425 million claims submitted to 175 insurers selling marketplace coverage in 2023.
The researchers found that the in-network denial rate ranged from 1% to 54% among HealthCare.gov issuers. There was also wide variation by state. Alabama had the highest in-network denial rate for HealthCare.gov at 34%, while South Dakota had the lowest at 6%.
Among HealthCare.gov parent companies that received more than 5 million claims in 2023, the ones with the highest in-network claim denial rates were Blue Cross Blue Shield of Alabama at 35%, UnitedHealth Group at 33% and Health Care Service Corporation at 29%. GuideWell Mutual Holding had the lowest at 13%.
There was limited data on the reason in-network claims were denied. However, according to the available data, the most common reason for a denial was a general “other” reason at 34%, followed by an administrative reason (18%) and the service being excluded (16%), according to KFF.
KFF also found that consumers don’t appeal denied claims often, with fewer than 1% of denials appealed. When they did appeal, insurers upheld 56% of their original decisions. It’s worth noting, however, that many consumers don’t know that they can appeal claims. Only 40% of consumers think they have a legal right to appeal to a government agency or independent medical expert, KFF said.
The report comes amid growing public outrage over insurer practices.
“Although research and investigations into health insurer practices have garnered attention from lawmakers and patient advocates over the past several years, the December 2024 killing of UnitedHealthcare’s CEO ignited broad public outrage over insurer claims denials,” the researchers said.
“While prospects for significant changes in response to the public outrage may be limited, interest in providing the public with more transparency about how insurer claims review and appeals operate could, in the same way as providing more accurate price transparency information, better enable consumers and employers to make more informed choices when purchasing private coverage,” KFF continued.
The organization gave several recommendations for how transparency can be improved, including providing more specific information in existing datasets, offering claims denial information on employer coverage and launching state-level initiatives.
Photo: Mironov Konstantin, Getty Images
