Insurance Denial Statistics: What the Data Says

The Scope of the Problem: Denial Rates

Getting a handle on the exact number of denials is tricky, but several sources paint a clear picture. A 2021 analysis by the Kaiser Family Foundation (KFF) of plans sold on the Affordable Care Act (ACA) marketplace found that, on average, insurers denied about 17% of in-network claims in 2019. That’s roughly 1 in 6 claims being rejected.

The numbers from the Centers for Medicare & Medicaid Services (CMS) for Medicare Advantage plans are similarly high. The problem is widespread and affects millions of Americans every year. Denials are not a rare occurrence; they are a routine part of the business of health insurance.

The Shocking Statistic: Appeal Rates

Given how common denials are, you would expect the appeals process to be flooded. The reality is the opposite. The same KFF study revealed the most damning statistic of all: patients on ACA plans appealed less than 0.2% of their denied in-network claims.

Let that sink in. For every 1,000 claims that are denied, fewer than two are ever formally appealed. The vast majority of patients simply accept the denial, either by paying the bill themselves or forgoing the care entirely. This is the core of the problem: the system functions because people feel too intimidated, confused, or exhausted to fight back.

The Ray of Hope: Success Rates on Appeal

This is where the story turns. What happens when patients actually do appeal? A 2011 report from the Government Accountability Office (GAO) found that, across several states, patients were successful in overturning their insurer’s denial in 39% to 59% of internal appeal cases. When a case goes to an independent external review, the odds are often even better.

More recent data continues to support this. While specifics vary by state and insurer, the general trend holds: a significant percentage of appeals are successful. This suggests that a large number of initial denials are incorrect, based on incomplete information, or are simply "soft denials" issued in the hope that the patient won't challenge them.

When you combine a low appeal rate with a high success rate, the conclusion is clear: insurance companies save billions of dollars each year simply by counting on your silence. They are banking on the fact that you won't take the time to submit the paperwork.