Health claims: 43% struggle, many forced to stay extra day at hospital

One of the top issues that consumers have been regularly writing about on LocalCircles is that of rejection of health insurance claims including cancellation of policies by insurance companies

Of those Indians who own general insurance policies, motor and health insurances top the list, followed by home insurance.  Among general insurance claims, Indians struggle the most when trying to get their health insurance claim processed and 43% of them experienced this, according to a survey conducted by LocalCircles. 

Taking into account the difficulty faced in getting insurance claims processed, 93% of respondents indicated that they are in favour of insurance regulator 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. 

On an aggregate basis, the survey indicates that 82% have “motor insurance”, 76% have “health insurance”, and only 22% have “home insurance." On an aggregate basis, of general insurance policyholders, 43% had difficulties

processing their “health insurance” claims in the last three years; 24% had difficulties with “motor insurance”, and 10% with “home insurance”. At least 54 per cent of those who have a general insurance policy are now buying/renewing it online while 40 per cent  of them still go via an agent.

 The survey received over 39,000 responses from citizens located in 302 districts of India. 67% respondents were men while 33% respondents were women. 46% respondents were from tier 1, 32% from tier 2 and 22% respondents were from tier 3, 4 and rural districts.

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. According to majority of those who commented on the subject, the process of claiming health insurance is extremely time consuming with many policyholders and their family members literally spending the last day of their hospital admission running around trying to get their claim processed. In several cases cited by policy holders on LocalCircles, it took 10-12 hours after the patient was ready for discharge for them to actually get discharged because the health insurance claim was still getting processed. By the time the claim is approved, the patient is so tired that they have no energy to fight for any expenses that are disapproved by the insurance company. 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. 

One of the key concerns outlined by some health insurance policyholders is that the insurance companies tend to cancel policies during the claims process for reasons like pre-existing conditions.

The Department of Consumer Affairs earlier this year wrote to the Ministry of Finance that in view of the rising number of complaints of mis-selling of insurance policies, rules should be changed to ensure that insurance agents maintain an audio-visual record of their sales pitch. This is to ensure that the prospective buyers are made aware of all policy features and not just the positive points.

Almost one-third or 1.6 lakh cases out of total 5.5 lakh pending consumer complaints received by the department of consumer affairs are of the insurance sector. Six major issues faced by policy holders include lack of full disclosure about exclusions and eligibility for claims in their policies; ambiguity in contracts due to use of technical jargons and complex words; claims rejected due to pre-existing disease; eligibility other than the preexisting disease and crop insurance rules tied to the scheme. The Consumer Affairs Department has also shared concern on the fact that agents hardly take any interest to guide or help policyholders after selling policies as their commissions are front-loaded.

Despite some interventions by the Insurance Regulatory and Development Authority of India (IRDAI) consumers continue to grapple with insurance companies to get their health claims.