Healthcare.gov marketplace insurers denied nearly one out of every five claims (19%) submitted for in-network services in 2017, and enrollees only appeal a tiny share (0.5%) of those denied claims, a KFF analysis of recently released claims data finds.
The analysis finds a huge variation across insurers, with average denial rates as low as 1 percent and as high as 45 percent. Denial rates also vary across states, though individual insurers in the same state also show wide variation. For instance, Florida’s six insurers denied 11 percent of claims, though the denial rates among the six insurers reporting data in the state range from 2 percent to 32 percent.
The Affordable Care Act requires insurers to report data about claims denials and appeals and other metrics to encourage transparency about how insurance coverage works in practice for enrollees. The analysis relies on data files released by the Centers for Medicare and Medicaid Services and compiled by KFF. It examines nearly 230 million claims submitted to 130 insurers selling individual market major medical health plans through healthcare.gov in 2017.
The CMS data do not provide information about why a claim was denied, making it difficult to assess why denial rates vary so much across insurers. Reasons can include both administrative issues such as improperly submitted or duplicative claims and coverage issues such as denials for services that the insurer determines are not medically necessary. Transparency data may well reflect other inconsistencies in how insurers report data, such as for duplicate claims or partially denied claims.
Consumers rarely appeal denied claims. In 2017, for example, the data show consumers filed appeals on about 200,000 of more than 42 million denied claims. On average, appeals resulted in a reversal of the initial denial in 14 percent of cases, though with wide variations among individual insurers, which had reversal rates ranging from 1 percent to 88 percent.
The analysis also reviews planned changes to the ACA transparency data reporting, as well as data reporting under other programs, that could address some of the current data limitations.