A survey by LocalCircles India has revealed that the Indian health insurers over the last three years either rejected or approved only partially over 50% of the health insurance claims submitted by health insurance policyholders.
The survey report said that of the policyholders surveyed who filed a claim within a specific timeframe, six in 10 reported that it took between six and 48 hours for their claim to be approved and for them to be discharged.
LocalCircles is an Indian community social media platform that enables citizens and small businesses to escalate issues for policy and enforcement. The platform received numerous complaints regarding delays in claim settlements over the past six months. These prompted the platform to take up a nationwide survey to identify the challenges faced by policyholders despite the Insurance Regulatory and Development Authority of India's (IRDAI) directive for expedited settlement of health insurance claims.
The platform’s report reveals that only 25% of survey participants reported that their health insurance claims in the last three years were fully approved by their insurers. Another 6% of the policyholders said that their claim was eventually fully approved following some back-and-forth with the insurance company.
Also, 33% of respondents stated that their claim was only partially approved with invalid reasons, while 36% said their claim was outright rejected with invalid reasons. Despite IRDAI's directive for companies to settle claims promptly, with some even within an hour to prevent delays in hospital discharge, health insurance policyholders' complaints indicate that this is not being consistently implemented.
According to IRDAI annual report for the financial year 2023-24 the Indian health insurance companies disallowed claims amounting to INR151bn ($1.76bn) or 12.9% of the total claims filed. According to the IRDAI report, out of the claims filed for a total sum of INR1.17tn under health insurance, only INR835bn or 71.29% were paid during the year ending 31 March 2024. Additionally, insurers repudiated claims amounting to INR10.93bn (9.34%) while outstanding claims totalled ?75.86bn (6.48%).
In terms of settlement, 66.16% of the claims were settled through cashless services and 39% were settled through reimbursement.