It only requires one major hospital stint to break the backbone of a household’s finance. So, being insured is one of the basic necessities today along with food, clothing and shelter.

As per data from World Health Organisation, India has highest number of diabetic patients in the world. Individuals affected due to cardiovascular diseases are also on the rise. Besides, rapid urbanisation without planning, and an inclination towards adopting western ways of life is taking a toll on health of the citizen. This is compounded by the indifference and the lack of will of the successive governments towards the health sector. Though Modicare (Ayushman Bharat) is an exception,  there are certain implementation issues with that as well. In such a situation, health insurance is definitely a way ahead for protecting oneself against the uncertainties.

But what if your health insurance claim gets rejected? What if the insurer points at the discrepancies as grounds for rejecting the claims, when you need money the most? According to Insurance Regulatory Development Authority (IRDA) Annual Report 2016–17, insurers have settled 82.1 per cent of total number of claims registered while they have repudiated 10.2 per cent of the claims. A country with the second highest population in the world, 10.2 per cent of the total claimants, is in fact a big number. And managing the same is not  an easy task.

Let us assess the reasons behind claim rejections and way out in such a desperate situation.

According to Gopal V Kumar, economist and Consulting Actuary, Radgo & Company, claims may be rejected mainly due to non-disclosure of health information and pre-existing health conditions. “Many a times, policyholders ignore specific exclusions mentioned in the documents and it becomes a reason for rejection. Many illnesses covered in the policy also have specified waiting period and lack of awareness about the same could put the policyholder in trouble,” he added. Vaidyanathan Ramani, Head, Product and Innovation, Policybazaar.com, explained, every policy has some standard exclusions. According to him, diseases related to alcohol or drug addictions are considered as lifestyle-induced maladies and are excluded from health insurance policies. “If a person is hospitalised for such a condition and files a claim for the same, it will be immediately rejected (as it is a) induced disease and (is) excluded from health insurance policies,” he said. S Prakash, Chief Operations Officer, Star Health and Allied Insurance, added, “Rejections can be acceptable or unacceptable. The major cause of unacceptable rejections is misunderstandings.”

Sudhanshu Shekhar, 42, Administration Head in a mobile accessories company had a family floater health insurance plan, which covered his wife and him. But his claim got rejected. “In the third year of the plan, my wife fractured her leg and was admitted to a hospital for three hours. The insurers asked me to pay the bill and get it reimbursed. But a week later, they rejected the claim,” he said. On detail introspection, Shekhar came to know that, day cover was not included in his insurance policy.

Way Out For Policyholders

Prakash says, “If the policyholder is dissatisfied, then she can apply for reconsideration or if it is not properly addressed, then she can escalate it to the grievance department of the insurance company.” If the grievance department also does not address it, then she can escalate it to the consumer forum, he added.

Hitesh Asrani, Founder and Director, CRP Risk Management, builds on this argument further. He said, institutions like IRDA, Insurance Ombudsmen under Rule 12 of Redress of Public Grievances 1998 and Alternative Dispute Resolution under any specific policy and consumer forum or the court of law can be approached by the concerned policyholder.

Precautionary Care

Approaching these forums can be a tedious and a time-consuming process. It can also be taxing to claimant’s pocket. The best way to avoid such situations is by reading the terms and conditions carefully, feels Ramani. “Research the cover (inclusions and exclusions) in the policy before buying it. Declare everything and fill up the proposal yourself. Validate that the information you have filled is there, after the policy is issued and no information is missing or incorrect,” he said. He further added that informing the insurer in case of any changes in your behaviour, lifestyle conditions and medical conditions is very important.

Avoid Frauds While Claiming

Another important aspect is to avoid frauds while claiming your policy cover. There have been cases where hospitals along with claimants have been caught for frauds like false claim, inflated prices and managing bills according to the requirement of insurances.  According to Kumar, frauds may be detected by various means and every company has certain defined triggers. “Early claims, tampering of information or documents, presented event flow, concentration of claims from a specified hospital and geographic region can give some leads”, he said.

Asrani believes that the science of claims’ investigation has now become a specialised stream and companies with decades of experience can connect the dots very easily to get the first level assessment of the claim. Ramani said that most insurance companies, maintain a database of fraudulent claims and also of the people, be it the applicants, doctors and agents associated with such frauds, big or small. “New claim applications are deduplicated against this database to raise a red flag for any repeat offenders. This is a continuous process of sharing formal and informal data, which is also prevalent within the industry,” he further added.

To sum it up, in certain cases the insurance policy can be cancelled on repetitive frauds thus leaving the claimant vulnerable.

From the above-mentioned instances, it can be concluded that in the game of life, health insurance is a lifeline. Benefits of the same can be reaped if the policy is read carefully, there is transparency between the insurers and insured, information is channelled to avoid misunderstandings and instances of fraudulent transactions  are avoided.

suyash@outlookindia.com