KFF Analysis Reveals High Denial Rates in Medicare and ACA Plans
A recent analysis by KFF reveals that major government-supported health insurance programs, including Medicare Advantage, Medicaid, and ACA Marketplace plans, denied approximately 12.5% of standard prior authorization requests nationwide last year.
The denial rates varied significantly among these programs, with Medicare Advantage at 12% and the ACA Marketplace at 18%. Within Medicare Advantage, the denial rates for the leading insurers ranged from 5% at Elevance to 17% at UnitedHealth Group, highlighting the substantial variability even within a single sector. Meanwhile, in the Medicaid managed care arena, denial percentages spanned from as low as 2% at L.A. Care Health Plan to as high as 23% at Independence Health Group. ACA Marketplace plans exhibited a similar range, with denial rates from GuideWell's 3% to Centene's 25%.
Regulatory Measures for Transparency
The Centers for Medicare and Medicaid Services (CMS) has mandated a new federal rule requiring insurers to disclose these prior authorization rates starting in 2026. This move aims to enhance transparency and accountability within the industry, thus allowing consumers and policymakers to make more informed decisions regarding healthcare coverage. These regulations are expected to provide better insights into insurance practices, potentially improving patients' access to necessary care.
Approval and Appeals: A Closer Look
Despite high approval rates, ranging from 82% to 90% across different plans, a significant number of denials were eventually overturned upon appeal: 67% in Medicare Advantage, 47% in Medicaid, and 43% in ACA Marketplace plans. Appealing denials, however, remains a rare occurrence, even though insurers—often those associated with America’s Health Insurance Plans (AHIP)—report expedited processing times, usually completing standard requests in about a day, well ahead of federal requirements.
| Program | Denial Rate | Appeal Success Rate |
|---|---|---|
| Medicare Advantage | 12% | 67% |
| Medicaid | Varies Widely | 47% |
| ACA Marketplace | 18% | 43% |
Service-Specific Denials and the Role of Technology
Denial rates were notably higher for specific services. For instance, Medicare Advantage plans denied a significant portion of requests related to costly services like long-term care hospital stays (65% denied) and inpatient rehabilitation (54% denied). However, even these high denial rates saw many approvals upon appeal, particularly in skilled nursing facility cases. The integration of AI and electronic systems has enabled quicker processing of requests, although some insured individuals still face treatment delays, with 24% of adults reporting such incidents in the past two years, according to a KFF poll from July 2025.