When Your Insurer's Algorithm Says No, a New AI Is Learning to Fight Back
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- Nearly 85 million health insurance claims were denied in 2024 — yet fewer than 1% of patients ever file a formal appeal, leaving billions in legitimate coverage unclaimed.
- AI startup Claimable, backed by Mark Cuban, reports that roughly 3 in 4 users who submit AI-generated appeal letters successfully overturn their denials.
- A Stanford-affiliated Health Affairs study warns that unregulated AI in claims management on both sides of the process could "supercharge" existing system flaws.
- CMS now requires human review before any Medicare Advantage prior authorization denial is issued — but no equivalent federal protection exists for commercial or ACA marketplace plan members.
What Happened
1%. That is the share of denied health insurance claims that patients actually challenge — even as insurers rejected roughly 85 million in-network claims out of 451 million filed across ACA marketplace plans in 2024, according to KFF analysis of CMS Transparency in Coverage data. La Voce di New York recently spotlighted the growing AI-powered counteroffensive taking shape in the health insurance industry, and that coverage reflects broader tracking by health policy researchers and insurtech analysts who have been watching this automated arms race build for well over a year.
According to Google News Insurance, AI tools designed to automate the appeals process are now reaching both individual consumers and hospital systems. The most prominent example is Claimable, a health tech startup co-founded in 2023 by British physician Warris Bokhari. The company raised $10 million from investors including entrepreneur Mark Cuban, and its platform generates customized appeal letters by drawing on medical literature, insurer policy language, and established claims management frameworks to contest coverage decisions. Claimable currently covers 28 medical conditions and 90 treatment categories, and as of April 2026 has formalized contracts with four pharmaceutical manufacturers to pursue denials on behalf of patients at institutional scale.
On the insurer side, major carriers including UnitedHealth, Humana, and Cigna have deployed algorithmic tools — most notably a system called nH Predict — to process prior authorization (pre-approval required before receiving certain treatments) and claims decisions at high volume. The result is a landscape where the same risk assessment logic that generates mass denials may soon face systematic, automated pushback from the patients those denials affect.
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Why It Matters for Your Coverage
Think of health insurance policy coverage like a contract written in two languages: one that the insurer's algorithm reads, and one that most patients never fully translate. The distance between those two interpretations is where 44% of appeal victories are found — because KFF data shows that nearly half of all internal appeals filed against ACA marketplace denials in 2024 ultimately succeeded. The problem is that almost no one files.
Chart: ACA marketplace average claim denial rate (19%), internal appeal success rate (44%), and AI-assisted reversal rate reported by Claimable (75%). Sources: KFF 2024 data; Claimable company reporting.
Why the near-total silence on appeals? Insurance researchers point to a combination of process complexity, tight deadlines, and the reasonable assumption that denials are simply final. Stanford Law Professor Michelle Mello offered a sharper diagnosis in a January 2026 report: "A major worry is that wrongful denials may be occurring as a result of a lack of meaningful human review of recommendations made by AI. Human reviewers at insurance companies may lack the time, expertise, and incentives to be effective reviewers of recommendations made by AI." That observation carries extra weight in a market where 84% of 93 insurance companies surveyed across 16 states — per the 2025 National Association of Insurance Commissioners (NAIC) AI/ML Survey Report — already deploy AI or machine learning tools across their product lines.
The coverage gap here is not simply about the policy documents you signed. It is about what happens after a claim enters the system. Standard health plans do not automatically match a denial reason to the published medical literature that disputes it. They do not structure a rebuttal in the format reviewers are trained to evaluate. Internal appeals — the formal process for challenging a denial before escalating to an external independent review board — are technically available but practically invisible to most policyholders.
CMS has moved to close one piece of this gap: new rules effective in 2025 now require Medicare Advantage (MA) plans to have a qualified healthcare professional review any prior authorization denial before it reaches the patient. That is a meaningful protection for the roughly 33 million Americans enrolled in MA plans. However, commercial insurance and ACA marketplace plans — covering an estimated 160 million additional Americans — face no equivalent federal requirement. Insurers in those markets remain free to let algorithmic risk assessment drive denials with limited mandated human oversight.
This is where insurance comparison shopping becomes quietly more consequential. Two plans may carry identical monthly premiums and deductibles (the out-of-pocket amount a policyholder pays before coverage activates), yet diverge dramatically in denial aggressiveness and appeals responsiveness. KFF data on Plan Year 2024 illustrates just how wide that spread runs: the average ACA in-network denial rate sits at 19%, but individual insurer rates span from roughly 3% to above 30%. That variance — effectively invisible in most insurance comparison tools — can translate into thousands of dollars in unexpected costs over a single plan year. This pattern echoes what Smart AI Trends examined in its analysis of AI regulation and corporate accountability: when automated systems operate without mandatory human oversight requirements, the correction burden tends to fall on individuals rather than institutions.
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The AI Angle
Claimable represents one end of the emerging insurtech response to AI-driven denials, but it is not operating alone. Hospital systems and pharmaceutical manufacturers are now signing direct contracts with AI appeal vendors — Claimable has four active drugmaker agreements as of April 2026 — meaning automated, clinically grounded appeals may soon arrive on behalf of patients who were never aware the process existed. That institutional adoption transforms the appeals pipeline from an individual self-help tool into a structural layer sitting between payers and providers across the entire claims management ecosystem.
Health Affairs researchers affiliated with Stanford HAI offered a pointed warning in their January 2026 peer-reviewed study evaluating 21 AI tools deployed in health insurance utilization review (the internal process by which insurers determine whether a requested treatment is medically necessary). Their conclusion: "Throwing AI into the prior authorization process without adequate oversight could make things even worse by supercharging the flaws of the existing process." The study, published at DOI 10.1377/hlthaff.2025.00897, stands as one of the most rigorous assessments of AI in claims management to date.
The deeper structural concern is symmetry: when both payers (insurers) and providers deploy AI simultaneously — one to accelerate denials, the other to accelerate challenges — the process can become faster without becoming more accurate. Claimable's reported 75% reversal rate is itself a signal. A platform that consistently overturns three-quarters of the cases it handles suggests a meaningful portion of original denials may lack durable clinical justification. The potential insurance savings for patients and providers from reversing unjustified denials at scale could be substantial — but only if the appeals infrastructure is allowed to keep pace with the denials machinery generating the volume.
What Should You Do? 3 Action Steps
Every insurance denial comes with a reason code — a short alphanumeric label that explains precisely why the claim was rejected. This code is the foundation of any successful appeal. Request the full Explanation of Benefits (EOB) document from your insurer and cross-reference the denial code against the insurer's published clinical coverage policy for that specific treatment or service. Many denials are reversed at the internal appeal stage simply because the original submission was missing supporting documentation that the denial code implicitly required. Good claims management starts with information: know exactly what was rejected, why, and what evidence the insurer expected to see before you file a single word of rebuttal.
Nearly half of all internal appeals filed against ACA marketplace denials in 2024 were ultimately successful — that is close to even odds, and most patients never play the hand. Under ACA rules, you generally have 180 days from a denial notice to file an internal appeal, and after that process concludes, you have the right to request an external independent review conducted by a third party with no financial tie to your insurer. AI tools like Claimable can automate the letter-drafting process. A licensed patient advocate or your employer's HR benefits coordinator can also help navigate this at no additional cost. For any claim above a few hundred dollars, filing an appeal is one of the most direct routes to insurance savings most policyholders never take.
When selecting a health plan — through an employer, the ACA marketplace, or a direct insurer — ask about the plan's historical denial rate. KFF's public analysis of CMS Transparency in Coverage filings breaks down denial rates by insurer and plan type; that data is freely available and rarely consulted during open enrollment. A plan with a 3% denial rate and a marginally higher premium may carry far lower total exposure than a plan with a 30% rate and a lower sticker price, especially for policyholders with ongoing medical needs. Review prior authorization requirements carefully: a policy coverage document that mandates pre-approval for routine specialist referrals embeds structurally higher denial risk than one that does not. A licensed insurance agent can translate these risk assessment criteria into plain dollar terms — that conversation is worth having before enrollment closes, not after the first denial lands in your mailbox.
Frequently Asked Questions
Can AI tools like Claimable actually overturn a health insurance denial, or is the reported success rate misleading?
The reversal rate Claimable reports — roughly 3 in 4 users seeing their denials overturned — aligns directionally with the broader KFF finding that 44% of formally filed internal appeals succeed even without AI assistance. These tools are effective primarily because they systematically match the denial reason code to relevant medical literature and policy language, then structure the appeal in a format that insurer reviewers are required to evaluate. The AI does not create a new right — that right already existed under your plan and federal law. What it adds is speed, accessibility, and clinical framing that a patient without a medical or legal background would struggle to produce independently. Before uploading any documents to a third-party service, confirm the platform is HIPAA-compliant and review its data privacy policy carefully.
What does the 19% ACA claim denial rate mean for my health insurance policy coverage in practical terms?
It means roughly 1 in 5 in-network claims filed on ACA marketplace plans in 2024 was initially rejected. That average, however, conceals enormous insurer-level variation: some carriers deny fewer than 3% of in-network claims; others exceed 30%. For any policyholder with regular healthcare use, selecting a high-denial-rate insurer can mean dozens of additional claims per year requiring follow-up, resubmission, or formal appeal. When conducting an insurance comparison before the next open enrollment period, check whether your prospective insurer's denial rate data is publicly available through CMS Transparency in Coverage filings — it is one of the most underused benchmarks in consumer plan selection and costs nothing to review.
Does the new CMS Medicare Advantage rule actually protect enrollees from AI-driven health insurance denials?
Only if you are enrolled in a Medicare Advantage plan. The CMS rule effective in 2025 requires that a qualified healthcare professional — not solely an algorithm — review any prior authorization denial before it is issued to an MA enrollee. That is a real safeguard for the roughly 33 million Americans in those plans. If you carry employer-sponsored insurance, an ACA marketplace plan, or individual commercial coverage, no equivalent federal rule currently applies. Those plans can still use AI-driven risk assessment and claims management tools to generate denials with minimal required human review. State-level consumer protections vary considerably, so a licensed agent familiar with your state's insurance code can clarify what specific safeguards apply to your plan type.
How do I find out whether my health insurer is using AI to process or deny my claims?
Determining this from the outside is genuinely difficult. The 2025 NAIC AI/ML Survey found 84% of 93 surveyed insurance companies across 16 states already use AI or machine learning tools — but disclosure to individual policyholders is not standardized under current federal rules. You can request your insurer's coverage determination guidelines and utilization management criteria, which carriers are generally required to make available. If a denial letter references an automated screening tool, a proprietary clinical decision-support system, or a named algorithmic platform, that is a signal that AI-assisted risk assessment was part of the decision chain. Stanford Law Professor Mello and Health Affairs researchers have both called for greater transparency in how AI operates in the prior authorization process — but as of mid-2026, no federal mandate requires that disclosure to commercial plan members.
Are there insurance savings strategies that reduce the likelihood of a health insurance claim being denied before it ever reaches the appeals stage?
Yes, and most of them occur before the claim is filed. First, obtain prior authorization proactively for any non-emergency procedure, specialist referral, or prescription your plan flags as requiring pre-approval; getting written approval in advance shifts the denial risk upstream and creates a documented authorization to cite if the claim is later challenged. Second, confirm that your provider submits claims with complete and accurate diagnosis and procedure codes — incomplete or mismatched coding is among the most common and most correctable causes of initial denials. Third, carefully review policy coverage exclusions at enrollment; some plans categorically exclude specific treatments, and no appeals process will override a contractual exclusion. A licensed insurance agent can walk through these exclusions in detail and help identify whether a rider (an optional policy add-on) addressing your specific medical needs is available at a cost that makes financial sense for your situation.
Disclaimer: This article is for informational purposes only and does not constitute insurance advice. Always consult a licensed insurance agent for personalized guidance.
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