Private health insurers are under fire for reneging on their prime commitment to policyholders, i.e., ensuring a smooth and justifiable claim settlement experience. This is particularly more distressing and stressful for the elderly population, who rely on their health policies to meet the soaring healthcare expenses.
In a recent post on social media platform X, a user (Rituparna Chatterjee, who goes by the username: @MasalaBai) highlighted an instance of claim rejection faced by her elderly parents. Chatterjee detailed the ordeal her parents faced with Care Health Insurance. Her mother admitted to a Fortis hospital with severe breathing problems, had her claim summarily rejected on the grounds of a "fraudulent claim," with no substantial explanation provided.
“We received a rejection notice over WhatsApp just before her discharge, labelling the claim as fraudulent. Since then, we’ve been given conflicting reasons, first, that my mother is a smoker, and later, that some unspecified documents are missing,” Chatterjee wrote, adding that repeated emails and calls to the insurer yielded no clear answers.
Any rejection of a health claim, right at the moment of dire need, can be extremely stressful for a policyholder, both financially and emotionally.
The plight shared by Chatterjee regarding claim rejection is not an isolated incident. In May 2024, Outlook Money covered this ordeal faced by policyholders in great detail. In the edition, ‘Lay Claim On Your Rights’ Outlook Money ran an extensive search on social media to study the complaints and spoke to at least four people, and most of them became victims unwittingly.
To navigate the claims conundrum, policyholders need to understand the reasons that lead to claim rejection.
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Why Are Claims Rejected?
In some cases, a lack of awareness on the part of policyholders in understanding the terms and conditions of the policy leads to a claim rejection, however, this is not always the case.
Many policyholders often face rejections for no fault of theirs. Outlook Money ran an extensive search on social media to study the complaints and spoke to at least four people, most of whom became victims of wrongful claim rejections.
The reasons behind your claim getting rejected could be;
- Online technical errors
- Overcharging by the hospitals (which is labelled as fraud by the insurers)
- (In some cases) Opting for a non-standard treatment for an illness that could be excluded from the policy
- Lack of proper documents
- Non-disclosure, including pre-existing conditions or providing incorrect or incomplete information at the time of buying the insurance policy
- Delayed claims, etc.
Apart from rejection and repudiation, policyholders often face the problem of getting only a part of the claim settled.
MP Calls For Scrutiny
Chatterjee’s post caught the attention of Lok Sabha MP and BJP Yuva Morcha National President Tejasvi Surya, who called the government’s attention to the systemic problems in the private health insurance sector regarding the rejection of claims.
Surya, in a post on X, detailed the plight of middle-class families who rely heavily on private health insurance for financial protection during medical emergencies. He highlighted the data alarming data released by the Insurance Brokers Association of India (IBAI) in 2024 (for the financial year 2022-23) that showed a stark contrast between public and private insurer in their claims paid ratios. The IBAI, previously covered by Outlook Money, showed that public sector insurers like New India and Oriental Insurance outperformed their private counterparts, with claims paid ratios exceeding 95 per cent based on volume and 98 per cent based on claim amounts.
In contrast, private health insurers like Niva Bupa, Manipal Cigna, and Star Health etc, reported significantly lower payout ratios indicating that some of them failed to cross even the 70 per cent mark in claim amounts settled. The MP also noted that in 2022-23 period, the health insurance sector issued 2.26 crore health insurance policies. “And these policies provide coverage to an impressive 55 crore individuals.”
However, he clarified that “This is not to target anyone, but highlighting the need for better regulation and grievance redressal for the customers.” Stating how he raised the issue of fair claim settlements (on health insurance) during Lok Sabha’s Zero Hour discussion on December 4, 2024, the minister called out, “I once again urge Irdai to look into this issue and rein in such unethical practices.”
For many people, the existing system feels skewed against policyholders who continue to face premium hikes with the lack of assurance of a financial safety net at a dire time of need. For families like Chatterjee’s the stakes couldn’t be higher, insurance is not a luxury but a lifeline, and its failure can have catastrophic consequences.
