Many health insurance claims in India have either been rejected or approved partially in the last three years, according to a recent survey by Local Circles. This conclusion was reached after taking inputs from 39,000 people in the 302 districts of India.
“Many policyholders cited their experience of getting a health insurance claim processed. Challenges faced ranged from insurance companies rejecting claims by classifying a health condition as a pre-existing condition to only approving a partial amount. 43% health insurance policyholders who filed a claim in the last three years struggled with getting it processed,” reported the survey.
The survey identified six major issues impacting policyholders:
Lack of complete information about claim exclusions and eligibility criteria.
Confusion arising from complex contract language and technical terms.
Claims being rejected due to pre-existing conditions.
Challenges related to eligibility criteria not directly linked to pre-existing conditions.
Issues specific to crop insurance regulations tied to the scheme.
Regular reports of health insurance claims being rejected or policies being cancelled by insurance companies.
Policyholders described the process of claiming health insurance as excessively time-consuming, often requiring a lot of effort and time from both policyholders and their family members, with many individuals having to manage claim processes until the last day of hospital admission.
In certain cases, discharge from the hospital was delayed for 10–12 hours post-patient readiness due to ongoing claim processing. Additionally, policyholders pointed out that any additional night spent in the hospital beyond the claimed period incurred costs for the policyholder rather than the insurance company.
Medical experts applaud the governement’s healtcare scheme ‘Ayushman Bharat’. “Government is also working on Ayushman Bharat where underprivileged get treated at minimum cost but it is high time that taxpayers should too be considered or given that benefits because still many taxpayers bank on private insurance,” says Dr Narendra Vankar, CEO and Founder, Quantum Corphealth.
What are the on-ground experiences of people making health insurance claims?
People, who have health insurance and filed a claim, voiced their experience to the survey researchers. It was found that health insurance companies are processing claims with such delay that the discharge from the hospital is getting delayed.
According to the survey report, “In several cases cited by policyholders on LocalCircles, it took 10-12 hours after the patient was ready for discharge for them to get discharged because the health insurance claim was still getting processed. If they stay back at the hospital another day to do so, the cost of that additional night’s stay has to be borne by them. And according to several patients, this is the experience where the insurance company has already provided a pre-approval to the hospital’s TPA desk before admission of the patient.”
What the policyholders expect from the insurance regulator
The majority of the people whose opinions were recorded in the survey said that they wanted the insurance regulator–Insurance Regulatory and Development Authority of India (IRDAI) to mandate insurance companies to publish certain details each month.
“Taking into account the difficulty faced in getting insurance claims processed, 93% of respondents indicated that they are in favour of IRDAI making it mandatory for insurance companies to disclose details of claims received, rejected, and also data about policies approved and policies cancelled on their websites each month. People believe that such a disclosure will improve the transparency of reporting and discourage insurance companies from not cancelling policies arbitrarily,” as per the survey report.
As per the survey report the people also want the IRDAI, Health Ministry as well as the Consumer Affairs Ministry to collaborate to ensure health insurance claims are processed fairly and fast and should not lead to harassment of the policyholder.
In response to these challenges, 93% of insurance holders expressed support for the Insurance Regulatory and Development Authority of India (IRDAI) to mandate insurance companies to publish monthly data on claims received, rejected, approved policies, and policy cancellations on their websites.
Furthermore, policyholders urged IRDAI, the Health Ministry, and the Consumer Affairs Ministry to collaborate to ensure fair and prompt processing of health insurance claims without causing harassment to policyholders.
Earlier this year, the Department of Consumer Affairs recommended changes to insurance policy rules in response to increased complaints about mis-selling. The proposed changes include requiring insurance agents to maintain audio-visual records of sales pitches to ensure prospective buyers are fully informed about policy features.
IRDAI is reportedly considering greater accountability measures, including enhanced audit frameworks for the sales process, customer outcomes, and complaint redressal mechanisms to address these concerns.