What to do when insurance denies a claim?

The full picture

The striking number here is not the win rate. It is how few people try. Marketplace insurers denied 19% of in-network claims in 2024, with individual issuers ranging from 3% to 36%. Out of roughly 85 million denied in-network claims, consumers filed about 263,000 appeals — under 1%. Insurers upheld about two-thirds of those and overturned roughly a third (KFF analysis of CMS Transparency in Coverage data).

You will see “40 to 60% of denials are overturned” quoted widely. That range comes from a 2011 Government Accountability Office report covering four states in 2009, before the ACA appeal rules existed. It is not a current national figure and we do not use it. The one place a figure in that neighbourhood is current is prior authorization denials specifically, where about 43% are overturned on appeal in marketplace plans — a different and much narrower population.

What the external review costs you. In the federal process the plan may not impose any cost on you, including a filing fee. A state-run process may charge a nominal fee — capped at $25 per review and $75 a year, refunded if the denial is reversed, and waived for hardship (HealthCare.gov). So “external review is always free” is close to right but not exactly right.

One figure we removed. This page used to say the average appealed claim recovers $1,200 to $8,000. No source publishes a dollar value of an appeal, and we could not find one. What you recover is the value of your own claim.

A scope note. These figures describe HealthCare.gov marketplace plans, which are roughly a fifth of the market. Denial reporting has never been implemented for employer-sponsored plans, so no comparable national number exists for them. Your appeal rights, however, apply to non-grandfathered employer plans too.

Why the appeal is worth filing

The gap between denials and appeals is the whole argument. KFF's analysis of marketplace claims data shows how rarely denied in-network claims are appealed at all, and what happens to the small number that are (KFF, claims denials and appeals in ACA marketplace plans in 2024). An appeal that is never filed has a settled outcome; one that is filed does not.

Ask for the claim file and the specific reason for the denial in writing before drafting anything. A denial for a missing prior authorisation, a coding error and a medical-necessity determination are three different disputes with three different remedies, and the appeal that succeeds is the one aimed at the actual reason. If the underlying bill also falls under federal billing protections for emergency or certain out-of-network care, that is a separate argument worth making alongside the appeal (CMS).

Common questions

What should you do when insurance denies a claim?

Appeal, because almost nobody does. Marketplace insurers denied a substantial share of in-network claims in 2024, and of the denied in-network claims, consumers appealed well under one percent; of the appeals that were filed, a meaningful share were overturned. You generally have 180 days from the denial notice to file an internal appeal, then a further window to request an external review decided by an independent organisation whose decision binds the insurer. Ask for your claim file in writing, which the plan must provide free of charge.

What is an external review and when can I use it?

It is a review by an independent organisation rather than by the insurer, and its decision binds the plan. It generally becomes available once the internal appeal process has been exhausted, though an expedited route exists where waiting would seriously jeopardise health. The federal process charges the consumer nothing and a state-run process may charge a nominal fee that is refunded if you win. The deadline to request it runs from the final internal denial, so note that date when it arrives.

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