Less Than 1%: America's Appeal Gap

In 2024, the insurers selling ACA marketplace coverage on HealthCare.gov received about 451 million claims for in-network care and denied roughly 85 million of them — a 19% denial rate, about one claim in five.¹ The more remarkable number is what happened next. Consumers appealed at least 262,982 of those denials — an appeal rate of less than 1%, roughly three appeals for every thousand denied claims.¹

Both figures come from the same public dataset: the Transparency in Coverage file that federal law requires marketplace insurers to report to CMS each year, analyzed by KFF in its annual brief on claims denials and appeals.⁴ These are insurer-reported counts, not survey estimates. And the counts describe a funnel with one message: in the ACA marketplace, the denial is, for all practical purposes, the final answer.

Follow one year of denials through the process the law provides. Stage one is the denial itself: roughly 85 million in-network claims refused.¹ Stage two is the internal appeal — a request that the insurer reconsider its own decision. That filter removes more than 99% of the volume on its own: 262,982 appeals reached the insurers, and KFF notes the true count could be somewhat higher only because CMS suppresses values under 10 in the public file.¹

The internal appeal goes back to the company that issued the denial, and the company usually agrees with itself: insurers upheld 165,863 appealed denials — 66%, by KFF's count.¹ A consumer who loses internally has the right to an external review by an independent third party. Almost nobody exercises it. Insurers reported at least 5,881 external appeals in 2024 — about one for every 14,000 denied claims, computed on KFF's counts.¹ The public data cannot even say how those external reviews turned out: after CMS's small-value suppression, KFF writes, "the rate at which external appeals were upheld could not be calculated."¹

The funnel's mouth is not one bad year. The 2023 edition of the same analysis found a 20% in-network denial rate — 86 million denials out of 436 million in-network claims — with an appeal rate that was also under 1%.² The 2024 brief describes its own headline rate as "similar to previous years."¹ If anything, the funnel narrowed: denial volume held roughly flat from 2023 to 2024 while consumer appeals fell from 376,508 to 262,982.¹²

The 19% average also conceals a wide spread. Across 157 reporting insurers, in-network denial rates ran from 3% to 36%; about 3% of insurers denied 30% or more of in-network claims in 2024, down from 14% the year before.¹ Two enrollees with the same coverage type, in different plans, can face radically different odds that any given claim is paid — a spread that appears on no member card.

What were the denials for? By the insurers' own categorization, mostly not clinical judgment. The single largest reported reason in 2024 was "Other" — a reason not on the government's list — at 36% of in-network denials, and only 5% were attributed to lack of medical necessity.¹

The simplest explanation is that most people do not know the funnel exists. KFF's 2023 survey of insured adults found that 40% knew they have a legal right to appeal a denial to a government agency or independent medical expert; 51% were not sure whether they had appeal rights, and 9% believed they had none.³

Knowledge is the first filter; friction is the second. An appeal means finding the denial reason, assembling records, writing an argument, and tracking a deadline — unpaid work performed against a company with a claims department. For small-dollar claims, the hours can exceed the value of the claim itself, and the rational response to that arithmetic is the one the data shows: write it off. The pattern is not unique to patients — this publication's companion piece on the denial economy documents the same calculation on the provider side, where working a denial has a measurable staff cost per claim.

The number needs two honest qualifications, in opposite directions. First, a denied claim in this dataset is not always a final refusal to pay: insurers report a denial "irrespective of whether a claim is resubmitted to correct the deficit, denied, or ultimately paid with or without appeal."¹ Some share of the 85 million were clerical rejections that were corrected, resubmitted, and paid without a formal appeal ever being filed. The public data cannot say how large that share is — so the raw subtraction, 85 million denials minus 262,982 appeals, overstates how many people truly gave up.

Second, and cutting the other way: the silence of the funnel is not evidence that the denials were correct. No one is checking. KFF notes that "so far, the federal government has not used the available claims denial data to conduct oversight of insurers."¹ And among the few consumers who did push back, the outcome was not futility — even at a 66% uphold rate, roughly a third of appealed denials did not survive the insurer's own second look.¹ The funnel measures behavior under friction and ignorance, not the merits of 85 million decisions. That is the appeal gap: a review process that works often enough to matter for the people who use it — and goes unused by more than 99% of the people it was written for.¹