Low-income patients face uphill battle overturning insurance claim denials, study shows

Editor's Note

Patients earning less than $50,000 annually are significantly less likely to have denied insurance claims reversed compared to wealthier individuals, according to a new study published in Health Affairs and reported by Fierce Healthcare on June 5. Researchers from the University of Massachusetts Amherst and the University of Toronto analyzed data from both Affordable Care Act marketplace and employer-sponsored insurance plans, uncovering stark disparities based on income, race, and other demographic factors.

While roughly 48% of denied claims for low-income households were successfully overturned, the rate rose to 52% for households making over $100,000. Although a small difference percentage-wise, it represents a meaningful gap in financial relief, especially considering that an overturned claim yielded an average savings of $136, or about 40% of the original cost.

The disparities extended beyond income. Minority patients were found to be less likely to contest denials but more likely to succeed when they did—possibly reflecting a tendency to only challenge the most clearly erroneous denials, or systemic barriers to accessing support for appeals. Notably, women were more likely to succeed in reversing claim denials than men.

The study also found that a third of denials were due to billing errors, while a quarter stemmed from coverage rejections. Despite these issues, only about 25% of denials were contested, with lower-income patients especially unlikely to challenge them—most likely due to the complexity of appeal processes and limited access to insurer support outside regular hours.

The researchers urged policymakers to simplify the claims dispute process, particularly for low-income populations who may face logistical, linguistic, or systemic barriers. As a related analysis by Premier estimated, providers spent nearly $18 billion in 2023 trying to overturn denials, highlighting the inefficiency and inequity in the current system.