The survey, which collected responses from over 100,000 health insurance subscribers across 327 districts in India, discovered that over 80% believe these delays are purposeful, meant to push policyholders into accepting smaller claim amounts.
According to a LocalCircles poll, 60% of health insurance claimants experienced delays ranging from six to 48 hours between claim clearance and hospital discharge. This discovery raises issues, as the Insurance Regulatory and Development Authority of India (IRDAI) requires claims to be handled within one hour to avoid discharge delays.
The study, which received responses from 30,366 health insurance consumers, asked them about their claim settlement experiences over the previous three years.
The findings found that 21% of respondents waited 24 to 48 hours for release, 12% waited 12 to 24 hours, and 14% had delays of 9 to 12 hours. Furthermore, 12% indicated that the process took 6 to 9 hours, while 21% reported wait times of 3 to 6 hours. Only 8% of respondents said their claims were processed immediately.
Furthermore, the study found a high level of skepticism among policyholders about the reasons for these delays. More than 80% of respondents stated that claims were purposefully delayed, forcing policyholders to become frustrated and eventually accept smaller claim amounts. Half of the respondents stated that they had directly experienced this problem, while 47% claimed it had happened to them or their relatives.
When asked if they considered that the extended claim processing benefited insurance firms, 47% agreed, with 34% saying it had not happened to them personally but had harmed individuals in their close network. Only 7% regarded this scenario as unusual.
When asked about the results of their claims, more than half claimed unpleasant experiences. Specifically, 20% said that their claims were rejected for invalid grounds, while 33% reported that their claims were only partially approved, again for invalid reasons. Only 25% claimed that their claims were fully accepted, and 6% received full approval only after significant back-and-forth with their insurer.
The survey also indicated that many policyholders felt unfairly handled, particularly those with pre-existing diseases such as diabetes, which frequently results in smaller settlements or outright denials.
Given the issues they've encountered, 8 out of 10 health insurance policyholders say health insurance firms still lack open web-based communication platforms for claims processing (instead relying on emails and phone calls from hospitals), and that such systems should be mandated by IRDAI.
According to IRDAI data from FY24, just 71.3% of the Rs 1.2 lakh crore reported claims were reimbursed. The survey stated that insurers received over 3 crore claims for Rs 1.1 lakh crore, in addition to outstanding claims from previous years. Insurers paid approximately 2.7 million claims for a total of Rs 83,493 crore, representing 82% by volume but only 71.3% in value. Notably, Rs 15,100 crore of claims were denied due to policy terms and conditions.
In June 2024, IRDAI adopted modifications to improve service standards. Insurers were required to accept or reject cashless claims within one hour and settle them within three hours of discharge. However, policyholders continue to report concerns, with LocalCircles receiving hundreds of complaints about delayed settlements in the last six months. According to the Insurance Brokers Association of India's (IBAI) report 'General Insurance Claim Insights 2023-24', HDFC Ergo had the highest claim settlement ratio at 94.32% in 2023-24, while Bajaj Allianz had the lowest at 73.38%. This mismatch highlights the continued difficulty in the claims process.
