Health insurance claim rejection is a situation where an insurance company denies a policyholder’s request for reimbursement for medical expenses. This can happen for a variety of reasons. The impact of a health insurance claim rejection can be significant. Policyholders may be left to bear the cost of their medical expenses, which can be financially burdensome. In some cases, a claim rejection may also lead to the policy being cancelled.
If your health insurance claim is rejected, you have the right to appeal the decision. You can contact your insurance company to get more information about the appeals process. You can also file a complaint with the Insurance Regulatory and Development Authority of India (IRDAI) if you are not satisfied with the outcome of your appeal.
Vivek Chaturvedi, CMO and head of direct sales, Go Digit General Insurance, said insurance companies may reject claims for multiple reasons. Non-disclosure of important health-related information and lack of awareness related to the policy coverage are among the top reasons why claims get rejected, he said.
He added that according to the IRDAI Annual Report of 2022, 6.42% of health insurance claims of general and health insurers were repudiated during FY21-22.
“Rejection of a health insurance claim can be extremely stressful as it can increase the financial burden on your loved ones. However, as a policyholder, you can proactively do few things to ensure you do not find yourself in a similar situation,” Chaturvedi underlined.
According to Chaturvedi, the following points need to be kept in mind by policyholders while assessing a health policy;
Read the policy terms carefully
Health insurance products are not standardised. In simple terms, it means the coverages and features offered will vary based on the plan opted by you.
Policyholders sometimes assume that if one gets hospitalised, the entire hospital bill is paid by the insurer. However, insurers may impose certain restrictions on types of procedures, waiting periods on some specific illnesses or any pre-existing diseases, capping on room rent or zone/city you are based out of, different types of co-payments, etc.. For example, if someone undergoes medical treatment during the stipulated waiting period for an illness related to their pre-existing disease, the insurer may deny the claim for the same.
Make sure you read and understand these terms clearly before opting for the plan.
Don’t hide health-related disclosures
Insurance works on the principle of mutual trust and faith. The health insurance offered to you is based on health-related information shared by you.
Before issuing a policy, the insurer asks the policyholder to disclose health information like your family’s health history, whether you have any pre-existing diseases, your smoking and drinking habits, among others. Misrepresenting this information or not honestly disclosing the same may be grounds for claim rejection if the claim is found to be related to any information that was not pre-disclosed.
Intimate the insurer on time
A health insurance claim needs to be filed with the insurer in a time bound manner.
Insurers communicate this timeline in the policy document and the same ranges between 15-90 days. Inability to file a claim on time can become grounds for rejection. However, the insurer may take a lenient stance if the reasons for delay in filing the claim can be explained convincingly, Chaturvedi added.
The impact of a health insurance claim rejection can be significant, both financially and emotionally.
Policyholders should also be aware of their rights under the Insurance Ombudsman Scheme. The Insurance Ombudsman is an independent body that resolves disputes between policyholders and insurance companies.
Policyholders who are not satisfied with the outcome of their appeal with the insurance company can approach the Insurance Ombudsman for redressal.
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