KFF: Plans on Healthcare.gov denied 20% of claims in 2023

Plans available through Healthcare.gov denied an average of 20% of claims in 2023, according to a new analysis from KFF.

Researchers found that exchange plans denied 19% of in-network claims and 37% of out-of-network claims, averaging out to 20%. There was notable variation between payers and states, according to the study, with denial rates ranging from 1% to 54%.

Insurers cited multiple reasons for denials, including 18% that were denied for administrative reasons, 16% for excluded services and 9% for lack of prior authorization or referral. Just 6% of denied claims cited a lack of medical necessity, according to the report.

It is rare for consumers to appeal denied claims, with fewer than 1% appealed. However, when appeals were made insurers upheld their decision in 56% of cases, according to the study.

Denied claims have been cited as a factor in making healthcare less affordable, with 39% of those surveyed in a 2023 KFF poll saying that it contributed to their struggles in paying medical bills.

The researchers said there is greater interest from the public in having the government rein in claims denials in the wake of UnitedHealthcare CEO Brian Thompson's death in December. His murder lead to significant public outrage over claims denials.

"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," the researchers said.

Steps that could be taken to shine greater light on why certain claims may be denied include enhancing existing datasets to provide further clarity on commonly stated reasons. This data could also add more detail on when prior authorizations are required. 

There is also far more limited data in claims denials in the employer space, which is where the bulk of people in private health plans are situated. Shedding light on that space could make it easier for regulators to alleviate some of the pressure around claims denials, the researchers said.