Article Today, Hyderabad:
Raghunandan, a software professional from Hyderabad, recently underwent treatment at a corporate hospital after a medical emergency. He was billed Rs. 8 lakh for a week-long stay. Although he held a valid health insurance policy, the insurer rejected his claim, citing lack of coverage for the specific treatment. Despite repeated appeals, the company refused to process the payment. He eventually paid the full amount from his own savings.
Common Pattern Nationwide
Similar complaints are being reported across the country. Many policyholders say that while insurance is sold with the promise of cashless treatment, companies often impose conditions at the time of settlement. Insurers frequently cite reasons such as non-disclosure, pre-existing illness, or exclusions in policy terms. As a result, patients are forced to bear a large share of hospital expenses even after paying premiums for several years.
Claims Rise, Payouts Lag
Recent industry data point to a widening gap between claims filed and claims settled. Compared with last year, the number of health insurance claims rose by about 22 per cent. However, the total payout increased by only around 13 per cent. This gap indicates that a significant portion of claims is being either rejected or settled for reduced amounts. There are multiple cases where patients report receiving less than 20 per cent of their total hospital bill.
Senior Citizens Hit Hardest
Private hospital costs have nearly doubled over the past five years. In parallel, insurance premiums have also increased sharply. Senior citizens have been the most affected. In many cases, premiums were reportedly raised by 50 to 60 per cent in a single revision. Following public concern, the insurance regulator, IRDAI, stepped in and capped annual premium hikes at 10 per cent. Even so, several elderly policyholders continue to pay close to Rs. 1 lakh annually without any certainty of full claim settlement.
Regulatory Gaps and Oversight
Although regulatory guidelines exist, enforcement remains uneven. Insurers are required to follow clear settlement norms, but implementation varies across companies. Consumer rights groups have been demanding stricter penalties for arbitrary claim rejections. There are also calls for an independent body to review disputed claims in a time-bound manner.
Growing Demand for Reforms
Health insurance is intended to reduce the financial burden of illness. However, repeated instances of partial payouts and rejections have weakened public trust in the system. Therefore, experts stress the need for stronger oversight, transparent policy wording, and faster grievance redressal. Until such safeguards are strengthened, policyholders are being urged to read policy terms carefully before enrolling.
