Policyholders urged to contact ombudsman for claim issues

Health insurance claims are often denied, leading to increased concerns from policyholders. The Insurance Regulatory and Development Authority of India (IRDAI) has recently identified issues with Star Health’s claim processes during its inspections of several insurance companies. Although Star Health claims these checks are routine, many are worried about how claims are managed in the health insurance sector. Reports indicate a rise in disputes among insurers, policyholders, and hospitals, particularly since the COVID-19 pandemic. A study revealed that many insurers are not paying out enough claims, with some insurance companies paying out less than 70% of claimed amounts. This situation is worse among standalone health insurance firms, which cater mainly to individuals. Surveys show that around half of policyholders have faced either partial or complete denials of their claims. Data from the Insurance Ombudsman indicates that 95% of health insurance complaints relate to claims not being fully honored. One reason for this low payout ratio is the lengthy processing time for larger claims, while smaller claims are resolved more quickly. A report highlighted that insurers often reject claims due to the "reasonable and customary charges" clause, which states that treatment costs should align with standard local charges. This clause creates confusion, as insurers decide what is considered reasonable without allowing policyholders access to relevant data, leading to dissatisfaction. Policyholders dissatisfied with their insurance company’s decision have a few recourse options. They should first contact the grievance redressal officer of their insurer or use the IRDAI’s Bima Bharosa portal to file a complaint. If not resolved within 30 days, they can approach the insurance ombudsman in their district. The ombudsman can handle cases involving claims up to Rs 50 lakh and aims to resolve issues promptly. If the ombudsman process doesn’t yield satisfactory results, policyholders can escalate their complaints to consumer courts. It is important for customers to be well-informed about their policy terms to navigate this challenging landscape successfully.