Over 50% Of Health Insurance Claims Rejected Or Partially Approved In Last Three Years: Survey

Over 50% of health insurance policyholders who submitted claims in the last three years faced either rejection or partial approval, according to a survey conducted by LocalCircles.

Six in 10 policyholders surveyed, who filed a claim in the last three years, said it took between six and 48 hours for their claim to be approved and for them to be discharged.

LocalCircles said it has received thousands of complaints on its platform regarding delays in claim settlements over the past six months. It conducted a nationwide survey to identify the issues faced by policyholders despite the Insurance Regulatory and Development Authority of India's directive for quick settlement.

The survey gathered over one lakh responses from health insurance policyholders across 327 districts in India.

LocalCircles, in its report, said only 25% of the survey participants said their health insurance claims in the last three years were "fully approved" by the insurance company. Another 6% mentioned that their "claim was fully approved but after some back-and-forth with the insurance company."

Besides, 33% said their claim was "only partially approved with invalid reasons. However, around 36% of the participants said their claim was rejected with invalid reasons.

Notably, the IRDAI has directed companies to settle claim immediately or within an hour to ensure no delay in discharge from the hospital. But health insurance policy owners' complaints show that this is not happening, LocalCircles said.

Out of 30,366 health insurance policy owners who responded to the question of claim settlement timeline, 21% stated the discharge from hospital after claim settlement "process took 24-48 hours"; 12% said the "process took 12-24 hours"; 14% claimed that it "took 9-12 hours"; and another 12% said it "took 6-9 hours", according to LocalCircles.

Only 8% stated it was processed instantly, it added.

Among private sector companies, the highest ratio of claim settlement in 2023-24 was by HDFC Ergo at 94.32%, while the lowest was by Bajaj Allianz at 73.38%, according to a report by the Insurance Brokers Association of India.

A majority of health insurance policyholders surveyed believe companies still don't have transparent web-based communication systems for claims processing and such systems should be mandated by IRDAI.

LocalCircles said it will share the survey findings with IRDAI and other authorities to nudge for further policy interventions.