Health Insurance Denials: A Beginner’s Guide to Challenging Refused Care or Payment

Getting a letter that says “denied” can feel like the floor just dropped out from under you. Sometimes the denial involves a surgery, medication, scan, hospital stay, mental health treatment, or follow-up care that seemed straightforward. Other times, the treatment already happened and the insurer later refused payment.

If that’s where you are, you’re not alone. Recent KFF analysis of HealthCare.gov marketplace plans found that insurers denied 19% of in-network claims in 2024 and about 20% of all claims overall for those plans. KFF also noted that only a small share of people formally appeal denied claims.

The good news is that many denials are not the end of the story. Federal law gives many patients the right to an internal appeal with the health plan and, in many cases, an external review by an independent third party. The details vary depending on the plan type, the reason for the denial, and whether the issue is urgent, but there is often a path to challenge the decision through a structured process described by HealthCare.gov, CMS, and the U.S. Department of Labor.

In this post you’ll learn what a health insurance denial really is, the most common reasons care or payment gets refused, what the appeal process often looks like, when outside review may be available, and when legal help may be worth considering. If you want a broader overview of the denial-and-appeal landscape, this guide on understanding the big picture around denials and outside review can help connect the dots.

<aside> 💡 Scroll to the bottom for every post in this series.

</aside>

What Counts As A Health Insurance Denial?

A health insurance denial is a decision by a health plan not to approve care, not to continue coverage for care, or not to pay some or all of a claim.

That can happen before treatment, during treatment, or after treatment. In general terms, denials often show up in a few different ways:

• A prior authorization request is refused before treatment happens
• A prescription is rejected at the pharmacy
• A claim is denied after a procedure or doctor visit
• A hospital stay is cut short because continued care is not approved
• A plan says a provider or facility is out of network
• A service is labeled not medically necessary, experimental, or excluded under the policy

Under the Affordable Care Act, many plans must provide notice explaining why a claim or service was denied and how to appeal. HealthCare.gov explains that if your insurer refuses to pay for a service or benefit you believe is covered, you generally have the right to appeal and seek independent review in qualifying cases. The Department of Labor’s ERISA materials also describe claims and appeal procedures for many employer-sponsored health plans.

Why Do Health Insurance Companies Deny Care Or Payment?

Not every denial is about the same thing. That matters because the path to challenging the decision often depends on why the insurer said no.

Common reasons include:

Medical Necessity