When Health Insurance Fails: A Family’s Six-Year Battle

“The system is tainted. Hospitals extort money, insurers take premiums but shy away from paying, and regulators rarely side with consumers,” says Rahul Bansal, 34, a Delhi-based corporate employee who has spent the past six years in a draining fight against a government-owned insurer, according to a recent report by India Today.

Bansal’s battle began in 2019 when National Insurance Company Limited rejected a claim of Rs 55,000. The claim was for his younger brother Pulkit, then 14, who had been hospitalised for five days on doctors’ advice. The policy was in their father’s name. Rahul himself wasn’t covered, but he became the family’s voice.“My parents were broken and wanted to drop the matter. I could not,” he recalls.

For more than a decade, the Bansals had been paying health insurance premiums running into several lakhs. Claims were rare. But when the need arose, their request was turned down with little explanation.

Claim Denied As “Not Necessary”

Pulkit had been battling high fever, weakness, and recurring symptoms for weeks. After repeated attempts at treatment at home failed, two doctors, one from a specialty hospital, recommended hospitalisation. He was admitted and placed on IV medication for five days. His condition improved only after discharge.

However, National Insurance, acting through its third-party administrator, MDIndia, said hospitalisation was unnecessary and that treatment could have been done on an outpatient basis. The rejection letter cited a clause: “not medically necessary.”

Rahul remembers the bureaucratic hurdles. “I informed the TPA within two hours of admission, but they didn’t issue a claim ID till my brother was discharged. Even then, they got the patient’s name wrong, mentioning my father instead of my brother,” he says. “It felt like deliberate negligence.”

The family sent additional medical documents, but the insurer stood firm. For Rahul, the refusal was “absurd.”

“Insurance companies expect us to override doctors’ advice and play medical experts ourselves. What if something had happened to my brother if we had delayed?” he asks.

Ombudsman: Another Dead End

The family then turned to the Insurance Ombudsman, hoping for impartial relief. The hearing lasted just a few minutes, Rahul says. “We were barely heard. The Ombudsman seemed to rely on the TPA’s technical language we couldn’t even follow. The order was against us.”

Disillusioned, his parents wanted to stop fighting. Rahul refused. In 2022, he filed a case in the Consumer Court citing unfair rejection and deficiency of service. After more than three years and 14 hearings, the case drags on.

“The whole system is designed to wear you out. Every step is meant to test your patience and perseverance,” he says.

A Fight Beyond Money

For Rahul, the case is no longer about Rs 55,000. It is about accountability. “We paid premiums regularly for over a decade. If consumers delay premiums, they face penalties. If insurers delay or reject claims unfairly, they face nothing,” he says. “Where is the accountability?”

Pulkit is now a young adult. His brother’s claim is still mired in litigation. The experience, Rahul says, has eroded trust. “People are paying extortionist premiums, yet when help is needed, they are abandoned. How can trust in the sector survive like this?”

Insurer’s Response

When contacted, National Insurance confirmed the claim was marked as “closed without settlement” in 2019 under clause 4.22, citing a lack of medical necessity. The company added, “We regret the inconvenience caused. Your concern has been forwarded to the department and will be addressed soon.”

MDIndia, the TPA, said it had registered the grievance and promised an update “within two to three working days.” No further details were shared.

A Larger Question

The Bansal case highlights a question troubling many Indian policyholders: if even straightforward hospitalisation on a doctor’s written advice can be brushed aside as “not necessary,” what protection does insurance really provide?

For Rahul Bansal, the fight goes on — not just for his family, but for every consumer who believes that paying premiums should mean protection in times of crisis.