BIRMINGHAM, Ala. — Blue Cross and Blue Shield of Alabama has the highest denial rate for in-network health insurance claims among major insurers in the United States, according to newly released federal data analyzing 2023 Affordable Care Act (ACA) marketplace plans.
The numbers are stark: 35% of in-network claims submitted to Blue Cross and Blue Shield of Alabama were denied last year-far above the national average of 19% for in-network claims on the ACA marketplace. Alabama as a state also led the nation, with an average denial rate of 34% for in-network claims, the highest in the country.
Nationally, insurers processed 425 million claims in 2023, with 92% for in-network services. While most claims are approved, the high denial rate in Alabama stands out, especially as fewer than 1% of denied claims are ever appealed by patients. Of those appeals, insurers upheld their original decision more than half the time.
The most common reason cited for denial was simply “Other,” accounting for 34% of denials, followed by administrative issues and excluded services. Only 6% were denied for lack of medical necessity.
Alabama’s high rate of denials comes as the state continues to debate expanding Medicaid, leaving more than 100,000 residents in a coverage gap between Medicaid eligibility and affording private insurance. Advocates argue that high denial rates, paired with limited Medicaid access, make it even harder for Alabamians to get the care they need.
Blue Cross and Blue Shield of Alabama’s denial rate was the highest among insurers handling more than 5 million claims, with UnitedHealth Group following at 33% and Health Care Service Corp. at 29%. The lowest average denial rate among states was just 6% in South Dakota.
The new data, released in early 2025, shines a spotlight on the challenges facing Alabama consumers and raises questions about transparency and accountability in health insurance coverage decisions.