If you have a health insurance policy, chances are that you might have either heard or faced some issues during the process of settling your claims. In a reply to a question posed by Member of Parliament, Pramod Tiwari, Pankaj Chaudhary, Minister of State, Ministry of Finance, said that both general insurers and health insurers processed around 325.72 lakh health insurance claims in the financial year 2023-24, out of which they paid some 268.59 lakh claims which translates to roughly 82.46 per cent of the overall claims.
Notably as many as significant 36.3 lakh claims or which is 11.18 per cent of the total claims made in the financial year 2023-24 were rejected while 20.73 lakh claims or 6.36 per cent of the total claims were carried forward to the next year.
Why Do Claims Get Rejected?
Not every claim rejection is unfair since there are some specific reasons as to why insurers refuse to pay or reimburse policyholders. According to the Insurance Regulatory and Development Authority of India (Irdai), some common grounds on which claims get rejected are;
The claim may fall under policy exclusions as per the policy documents
If the hospitalisation happened within the waiting period of the policy
The sum insured under the plan might be exhausted with no auto-restoration period
The amount claimed by the policyholder is below the deductible limit
Or if the claim is termed as a ‘fraudulent claim’
Other than outright rejections, some claims get partially disallowed due to a variety of reasons such as non-medical expenses, co-payment clauses, sub-limits, or specific caps on the benefits provided. This may often lead to frustration for many policyholders who may assume they are fully covered but later realise that the policy has multiple conditions limiting their reimbursement.
Often the root cause of claim rejection comes from a lack of awareness of the part insured, this happens because policy details and terminologies can get overwhelming to understand and interpret for a common individual.
Is Irdai doing anything to address these challenges?
In his response, Chaudhary noted that Irdai has been pushing insurers to improve their claim settlement process by undertaking the following measures:
Review Committee: As per rules, insurers cannot reject a claim without it being first reviewed by their Product Management Committee (PMC) or a dedicated Claims Review Committee (CRC).
Proper Communication: In the event a claim is rejected, insurers need to provide a detailed explanation citing policy terms that have led to the claim getting repudiated.
Faster Grievance Redressal: If a policyholder is dissatisfied with the claim, they can file a complaint with the insurer’s grievance redressal officer. If their issue remains unresolved, they can approach the Insurance Ombudsman who has the power to make binding decisions.
Penalty on Delays: As per the Irdai if any insurer fails to comply with the Ombudsman’s decision within a time frame of 30 days, they will have to pay a penalty of Rs 5,000 per day for the delay.
Bima Bharosa Portal: The Irdai has also launched the Bima Bharosa online platform where any insurance policyholder can raise his/her complaint and seek expedited resolution.
Awareness Is The key
While Irdai is making efforts to improve the claim settlement experience, policyholders should also be proactive. Policyholders can do so by reading the fine print of their insurance document plan before making a purchase. Additionally, individuals should also look for details regarding exclusions, sub-limits, and co-payment clauses before buying a policy.
Since insurance is meant to be a safety net, if you are not fully aware of the terms, you might find yourself struggling when you need it the most.
