The Hidden Crisis of Insurance Denial Rates: How Americans Are Paying the Price

Thought Leadership Healthquake™: Perspectives on “Value” in Healthcare

by Michael N. Brown

In the maze of the U.S. healthcare system, claim denials by insurance companies have reached alarming levels. Across the industry, major insurers are rejecting a growing number of claims, leaving patients and providers burdened with rising costs and uncertainty.

While United Healthcare leads with a 33% claim denial rate, it’s far from the only culprit. Other insurers, such as Cigna, Aetna, and Anthem Blue Cross Blue Shield, have also recorded denial rates that significantly affect patient care and financial stability.

The Scope of the Problem

A recent report by the Centers for Medicare & Medicaid Services (CMS) highlights that:

  • Cigna denied about 17% of claims in recent years1.
  • Aetna, part of CVS Health, has shown denial rates fluctuating around 20%2.
  • Anthem Blue Cross Blue Shield has been noted for rejection rates ranging between 20% to 30%, depending on plan specifics and regions3.

These figures reflect systemic issues, not isolated cases. When 1 in 3 claims (or more) is denied, it’s clear that automation and algorithm-based systems are failing to handle the complexities of medical billing and coverage approvals.

Impact on Everyday Americans

These high denial rates aren’t just statistics—they represent real consequences for patients and their families:

  1. Financial Strain: Patients often receive unexpected bills for treatments they thought were covered. Medical debt remains the leading cause of personal bankruptcy in the U.S., fueled by denied claims4.
  2. Delayed or Denied Care: When claims are denied, patients might delay necessary procedures, leading to deteriorating health conditions. Appeals are time-consuming and rarely resolved quickly5.
  3. Mental and Emotional Stress: Navigating claim denials creates additional anxiety and confusion for patients already facing health challenges6.

Why Automation Alone Isn’t Enough

Insurance companies increasingly rely on automated systems and AI to process claims. While technology can handle routine tasks, it falls short in cases involving:

  • Complex medical histories
  • Specialized treatments
  • Ambiguous coding or documentation errors

Automation might efficiently process 80% of claims, but the remaining 20%—often the most critical and nuanced cases—require human judgment and expertise to resolve fairly7.

Bridging the Gap: What Needs to Change

  1. Greater Transparency: Insurance companies must disclose their denial rates and provide clear reasons for claim rejections.
  2. Balanced Automation: AI and automation should support human oversight, not replace it. Experienced billing professionals are essential for handling appeals and ensuring fair reimbursements.
  3. Stronger Consumer Protections: Policies must be enacted to prevent wrongful denials and protect patients from undue financial hardship.

A Systemic Problem Requires Systemic Solutions

High denial rates across insurers like UnitedHealthcare, Cigna, Aetna, and Anthem reveal a fundamental flaw in the current system. Without intervention, the burden of these denials will continue to fall on patients and providers. It’s time to demand that insurers prioritize patient care over profit and that technology serves as a tool for improvement, not a barrier to fair treatment.

Americans deserve a healthcare system where claims are processed accurately, fairly, and transparently. Until we bridge the gap between automation and human oversight, the denial crisis will remain a threat to public health and financial security.


Footnotes

1. Centers for Medicare & Medicaid Services (CMS). “Health Insurance Marketplace Quality Rating System.” 
2. American Hospital Association (AHA). “Trends in Healthcare Denials: A Growing Problem for Providers and
Patients.”
3. Kaiser Family Foundation. “Insurer Denial Rates in the ACA Marketplaces.” 2022.
4. Consumer Financial Protection Bureau (CFPB). “Medical Debt Burden in the United States.”
5. National Consumer Law Center (NCLC). “Appealing Insurance Denials.”
6. The New York Times. “Denied Claims: How Insurers are Increasing Stress on Patients.”
7. Medical Group Management Association (MGMA). “Revenue Cycle Management Challenges in 2022.”