43% of health insurance policyholders face claim processing hurdles: Survey

Health insurance claim challenges: As much as 43 per cent of health insurance policyholders encountered difficulties in processing their claims after receiving treatment, according to a recent survey conducted by LocalCircles. The study highlighted that individuals with general insurance policies faced the most challenges compared to those with motor or other insurance coverage.

Amongst the respondents who had filed a claim in the past three years, nearly four out of ten patients struggled to receive their entitled funds or settle outstanding payments at hospitals following treatment.

Policyholder issues identified

The survey shed light on six primary issues faced by policyholders, including insufficient disclosure regarding claim exclusions and eligibility criteria, contractual ambiguity due to complex terminology, claim rejections based on pre-existing conditions, eligibility criteria beyond pre-existing illnesses, and complications arising from crop insurance regulations.

Furthermore, policyholders expressed frustration over frequent claim rejections and policy cancellations by insurance companies. They recounted instances where insurers rejected claims by categorising certain health conditions as pre-existing, or only offering partial reimbursements.

Describing the cumbersome process of claiming health insurance, many policyholders recounted spending significant time and effort, often up until the last day of hospital admission, to facilitate their claims. In some cases, patients experienced delays of up to 10-12 hours post-discharge due to ongoing claim processing, leading to additional financial burdens if they opted to extend their hospital stay.

Policyholder transparency advocated

Proposing solutions, 93 per cent of respondents advocated for greater transparency from insurance companies, urging regulatory bodies such as the Insurance Regulatory and Development Authority of India (IRDAI), the Ministry of Health, and the Ministry of Consumer Affairs to collaborate in ensuring fair and efficient processing of health insurance claims, without subjecting policyholders to undue harassment.

In response to mounting complaints regarding insurance policy mis-selling, the Department of Consumer Affairs proposed revisions to regulations, including mandatory audio-visual recordings of sales pitches by insurance agents. This measure aims to ensure prospective buyers are fully informed about policy features, rather than solely focusing on positive aspects.

Notably, IRDAI is considering enhanced accountability measures for all stakeholders, including frameworks for auditing solicitation processes, assessing customer outcomes, and strengthening redressal mechanisms.