NEW DELHI: Nearly a third of all insurance claims registered and outstanding in FY2024 remain unpaid, data of Insurance Regulatory and Development Authority of India (IRDAI) reveals. A related survey also shows that despite the regulator’s changes to improve service standards, policy owners still face myriad problems.
The insurance regulator’s report reveals that insurers registered over 3 crore claims during the year for Rs 1.1 lakh crore, in addition to the 17.9 lakh claims for Rs 6,290 crore outstanding from earlier years.
Of these claims, insurers paid nearly 2.7 crore claims, amounting to Rs 83,493 crore. This represents 82% of the reported claims by volume and 71.3% by value. Of the claims that were not paid, Rs 15,100 crore worth were “disallowed according to terms and conditions of the policy contract”.
The IRDAI sought to bring in changes to improve insurance services in June 2024 after LocalCircles, a community social media submitted a report highlighting the slow health insurance claim processing.
However, LocalCircles says, going by complaints and other social media and media reports, they are still facing problems. LocalCircles conducted a nationwide survey to find out the various problems they have faced despite IRDAI’s directives. The survey received over 1,00,000 responses from health insurance policy owners located in 327 districts of India.
Lack of transparency
Some health insurance companies are not transparent in their operations such that they don’t specify upfront which health issues are covered and excluded. Survey respondents were asked if IRDAI mandate 100% web-based processing of claims with policy holders kept informed at every step?”
Around 83% stated “yes, this is not happening and is a must”; 9% of respondents stated “yes, this is already happening and functional” and 8% of respondents did not give a clear answer.
Delay benefits insurers
Asked if the long time taken to process claims tends to benefit insurance companies as policy holders get tired of waiting and settle for approval of lower amounts (leading to higher out of pocket payment), 47% of respondents stated “yes, happened with me or my family too”; 34% of respondents stated “didn’t happen with us but has happened with many in our close network”; 7% of respondents said “don’t believe this scenario is common” and 12% of respondents did not give a clear answer.
Delayed settlements
IRDAI has directed that claim settlement should be done immediately or within an hour to ensure no delay in discharge from the hospital. But policy owners’ complaints show that this is not happening.
The survey asked health insurance policy owners, “How long did it take on the discharge day with the hospital and the insurance company to get you out of the hospital?”
Only 8% said “it was processed instantly” while a 20% stated the discharge after claim settlement “process took 24-48 hours”. Other responses put the time period anywhere between three and 24 hours.
Conditional settlements
Getting health insurance claims can sometimes be difficult if the insurance company decides that those with certain health conditions like diabetes, will not be eligible for it or will be allowed a lower settlement.
20% of respondents stated the “claim was rejected with invalid reasons”; 16% of respondents stated the “claim was rejected with valid reasons”; 33% of respondents stated the “insurance claim was only partially approved and with invalid reasons.”