60% health insurance claimants face discharge delays, want web processing

The survey, which included responses from over 100,000 health insurance policyholders across 327 districts in India, found that over 80% believe these delays are intentional, designed to pressure policyholders into accepting lower claim amounts

 

Sixty per cent of health insurance claimants reported experiencing delays of six to 48 hours between claim approval and hospital discharge, according to a survey by LocalCircls. This finding raises concerns as the Insurance Regulatory and Development Authority of India (IRDAI) mandates that claims should be settled within an hour to prevent discharge delays.

 

The survey, which garnered responses from 30,366 health insurance policyholders, asked participants about their experiences with claim settlements over the past three years. The results revealed that 21% of respondents waited 24 to 48 hours for discharge, while 12% reported waiting 12 to 24 hours, and another 14% experienced delays of 9 to 12 hours. Additionally, 12% stated the process took 6 to 9 hours, and 21% reported waits of 3 to 6 hours. Only 8% of respondents indicated that their claims were processed instantly.

 

 

Moreover, the survey revealed a significant distrust among policyholders regarding the motives behind these delays. Over 80% of respondents believed that claims are intentionally delayed, causing policyholders to tire of waiting and ultimately accept lower claim amounts. Half of the respondents indicated they had personally faced this issue, while 47% said it had happened to them or their family.

 

When asked if they believed that the prolonged claim processing worked in favor of insurance companies, 47% confirmed this belief, with 34% stating it had not happened to them personally but had affected those in their close network. Only 7% dismissed this scenario as uncommon.

 

When asked about the outcomes of their claims, over 50% reported negative experiences. Specifically, 20% stated their claims were rejected for invalid reasons, and 33% said their claims were only partially approved, also for invalid reasons. Only 25% reported their claims being fully approved, while 6% received full approval only after extensive back-and-forth with their insurance company.

 

The survey further revealed that many policyholders feel unfairly treated, especially those with pre-existing conditions like diabetes, which often lead to lower settlements or outright rejections.

 

Given the problems they have faced, 8 in 10 health insurance policy owners believe health insurance companies still don’t have transparent web-based communication systems (tend to rely on emails, calls from hospitals) for claims processing and such systems should be mandated by IRDAI.

 

 IRDAI data from FY24 indicates that only 71.3% of the Rs 1.2 lakh crore claims registered were paid. The report revealed that insurers received over 3 crore claims, totaling Rs 1.1 lakh crore, along with outstanding claims from previous years. Of these, insurers paid nearly 2.7 crore claims, amounting to Rs 83,493 crore, representing 82% by volume but only 71.3% by value. Notably, Rs 15,100 crore worth of claims were disallowed due to policy terms and conditions.

 

In June 2024,  IRDAI implemented changes aimed at improving service standards. Insurers were mandated to accept or reject cashless claims within one hour and settle them within three hours upon discharge. However, policyholders continue to report issues, with LocalCircles receiving thousands of complaints about delayed settlements over the past six months. Among private sector insurers, HDFC Ergo recorded the highest claim settlement ratio in 2023-24 at 94.32%, while Bajaj Allianz reported the lowest at 73.38%,  according to a report ‘General Insurance Claim Insights 2023- 24’ by the Insurance Brokers Association of India (IBAI). This disparity further emphasizes the ongoing challenges in the claims process.