How To Appeal Claim Denials And Policy Cancellations By An Insurance Company

Health insurance is supposed to be your safety net, covering the bulk of medical bills when the unexpected happens. However, the process isn't always straightforward. Health insurers can deny claims or cancel policies, leaving consumers feeling powerless.

Facing claim denials or policy cancellations, whether from misunderstood policies, miscommunication, or simple oversight, can be an overwhelming experience. Where do you start?

In this article, we'll explain how to appeal an insurance denial or policy cancellation successfully.

In this blog post, you'll learn:

• The two methods for appealing a health insurance denial.
• The key steps to challenge claim decisions and protect your coverage.
• How long it takes to review a claim.

Health insurance claim denials and policy cancellations

If your health insurer refuses to pay a claim or ends your health plan coverage, you can appeal the insurance provider's decision.

Health insurance claim denials are more common than many people realize. According to a 2025 KFF¹ analysis, HealthCare.gov insurers denied one in five in-network claims in 2023. Yet, fewer than 1% of consumers appealed those denials.

Common reasons for a health insurance claim denial include:

• Administrative errors
• Missing information in the submitted paperwork
• Concerns regarding medical necessity
• Your health insurance plan doesn't cover the service
• Issues with your provider network

Insurance carriers may also cancel your health coverage.

Health insurance companies can cancel your coverage² if:

• You intentionally put false or incomplete information on your insurance application. In this case, the insurer may pursue rescission, which is the retroactive cancellation of your policy for fraud
• You don't pay your health insurance premiums on time

Health insurance appeals process

Health insurers must explain why they denied your claim or ended your coverage. They also need to explain how you can dispute their decisions.

You can challenge an insurance company's decision in two ways:

• Internal appeal process: If your insurer denies your claim or cancels your health insurance coverage, you can ask for an internal appeal. This involves your health insurer conducting a full and fair review of its decision. You can ask for an expedited appeal if your case is urgent.
• External review process: You can take your appeal to an independent third party, known as an external review³. An external review ensures your insurance company won't have the final say over whether to pay your claim.

Steps in the appeals process

There's a reason most consumers don't bother with the appeals process. Appealing claim denials and policy cancellations is no simple task. By following a structured approach, you can improve your chances of a successful appeal.

Here are 10 key steps to consider:

• Review the cancellation or denial letter. Read the cancellation or denial letter from the insurance company to understand the reasons for the denial or cancellation.
• Gather your policy documents. Review your health insurance policy's coverage details. Check if the denial or cancellation aligns with the terms outlined in the policy.
• Identify the disputed issues. Pinpoint the exact issues causing the denial or cancellation. Determine if there were any errors or misunderstandings.
• Collect supporting documentation. Gather all relevant documents, such as a letter of medical necessity (LMN) from a medical professional, medical records, bills, or any other evidence that supports your case.
• Request clarification. If any part of the denial or cancellation is unclear, contact your insurance company for clarification.
• Review legal requirements and protections. Familiarize yourself with your health insurance rights, including any protections provided under federal regulations and applicable state laws.
• Draft a formal appeal letter. Address the letter to the appropriate department or contact identified in the denial or cancellation notice. State your disagreement with the insurance provider's decision, referencing specific policy terms and conditions.
• Include all necessary documentation. Attach copies of all supporting documents and list them in the appeal letter.
• Submit the appeal within the deadlines. For ACA-compliant plans, once a health insurer denies your claim, you have up to 180 days to file your internal appeal. This timeframe can differ for short-term plans and self-funded plans.
• Track progress. After sending the appeal, confirm the insurance company received it. Maintain communication with the insurer to keep track of your appeal's progress. Document all interactions, including dates, times, and names of the representatives you speak to.

While appeals can be successful, data from KFF show that insurers often uphold their original decisions. Fewer than 1% of denied claims were appealed, and 56% of appeals were upheld in 2023. If the company denies your appeal, your next step may be seeking assistance from an insurance attorney, consumer advocacy organization, or your state's Consumer Assistance Program⁴.

If your claim denial involves an out-of-network provider at an in-network facility or emergency care, you may have additional protections under the No Surprises Act. If you believe your denial violates the No Surprises Act, you can file a complaint with CMS or your state insurance commissioner in addition to the appeals process.

How long does the review take?

The duration of a review varies based on the specific appeals process⁵.

Want to appeal something else with your health insurance?

You can also challenge Health Insurance Marketplace decisions⁶ if the Marketplace determines that you're ineligible to enroll in a plan or don't qualify for premium tax credits. The Marketplace has a separate appeals process for eligibility determinations, including decisions related to enrollment, financial assistance, and special enrollment periods.

Conclusion

Understanding the appeals process and knowing your rights are crucial in dealing with health insurance claim denials and policy cancellations. With persistence and proper knowledge, you can challenge these decisions and potentially reinstate your coverage or receive the insurance reimbursement you deserve.

This blog article was originally published on July 23, 2010. It was last updated on June 16, 2026.

This article contains general information on health insurance and should not be taken as legal advice. You should consult with a trusted advisor or attorney about your specific situation.

References

1. KFF Claims Denials and Appeals in ACA Marketplace Plans in 2023

2. HHS Cancellations and Appeals

3. Healthcare.gov Appealing a Health Plan Decision

4. CMS Consumer Assistance Program

5. CMS appeals

6. Marketplace appeals