Rising Health Insurance Claim Rejections in India Survey Reveals Major Concerns for Policyholders
Health insurance claim rejections have become a growing concern for policyholders in India, with a recent survey by LocalCircles shedding light on the challenges faced by insured individuals. According to the survey, nearly 50% of policyholders who filed claims in the last three years reported either partial or complete rejection of their claims.
The comprehensive study, conducted between June and December 2024, gathered over 1 lakh responses from policyholders across 327 districts, offering valuable insights into the issues surrounding health insurance claims.
Claim Delays Add to Policyholders’ Woes
In addition to rejections, the survey revealed significant delays in claim processing. Six out of ten respondents experienced a waiting period of six to 48 hours after their claims were approved before being discharged from hospitals.
Among the 28,700 respondents who shared details about claim settlements:
- 33% reported partial claim payments
- 20% faced outright claim rejections, often citing “invalid” reasons
Alarming Increase in Claim Rejections
The Insurance Regulatory and Development Authority of India (IRDAI) recently reported that 11% of health insurance claims in FY24 were denied, amounting to ₹26,000 crore in repudiated claims. This represents a 19.10% increase compared to the previous fiscal year.
Common Reasons Behind Claim Rejections
The survey and regulatory data point to several recurring reasons for claim denials:
1. Documentation Errors
Incorrect or incomplete paperwork is a leading cause of claim rejections. Missing information, mismatched medical records, or errors in basic policy details such as treatment dates and diagnosis codes often lead insurers to deny claims.
2. Non-Disclosure of Pre-Existing Conditions
Many claims are rejected due to undisclosed pre-existing medical conditions. Policies frequently exclude coverage for such conditions, and policyholders unaware of these exclusions may find their claims denied.
3. Policy Lapses or Delayed Renewals
Claims are rejected if the policy is inactive due to missed premium payments or delayed renewals. This highlights the importance of ensuring timely renewal of health insurance policies.
4. Waiting Period Violations
Most health insurance policies include waiting periods for specific treatments or pre-existing illnesses. Claims filed for conditions during this waiting period are often denied. Commonly impacted treatments include maternity care and certain surgeries.
5. Inadequate Medical Records
Insufficient documentation, such as missing medical bills or incomplete discharge summaries, can also lead to claim rejections or partial payments. Additionally, treatments deemed inadequate by insurers may not qualify for reimbursement.
Need for Greater Awareness and Transparency
The findings underline the need for improved transparency and awareness among policyholders regarding their health insurance terms. Ensuring accurate documentation, understanding policy exclusions, and maintaining timely renewals can help reduce the risk of claim denials.
The surge in claim rejections and delays signals the urgency for regulatory reforms and better communication between insurers and policyholders to build trust and provide seamless healthcare coverage.
