Limited Understanding, Undisclosed PEDs Contributing To 75% Of Health Claim Rejections: Policybazaar
The Policybazaar report has said that more than 18 per cent of claims get rejected because of an incomplete waiting period, which means the claim was filed before the waiting period was over.
Understanding this rejection category is vital for policyholders, as it points to a lack of awareness.
At the same time, it also presents a compelling reason to buy health insurance when young and healthy to have lower waiting periods in policies.
A significant proportion of 25 per cent of claims got rejected due to undisclosed pre-existing diseases like diabetes or hypertension.
“This lack of transparency defeats the purpose of purchasing health insurance in the first place. The trend highlights the importance of keeping customers well-informed about the disclosure process,” stated the report.
It also mentioned that a considerable 25 per cent of the rejection volume, is for claims outside cover. This category includes both claims filed for ailments not covered (16 per cent) as well as OPD or daycare claims that were not payable (9 per cent).
This emphasises the necessity for policyholders to understand the scope of their coverage. A review of policy documents before seeking treatment could mitigate such rejections, suggests the report.
Over 16 per cent of the rejections occur due to unsubmitted query reverts when insurers need more information from the consumer's end to process the claim further. A smoother communication channel between insurers and policyholders could reduce these instances.
About 4.5 per cent of the claims are rejected for being wrongly filed. This highlights the need for better customer guidance in the claims submission process.
A relatively lower 4.86 per cent of claims are rejected for unjustified hospitalisation. This includes cases where hospitalisation didn’t meet the required criteria as per the policy.
This indicates the need for policyholders to understand the well-justified hospitalisation process, showcasing a strong link between medical necessity and insurance approval.
The importance of a high sum insured cannot be overstated in health insurance. Having a high sum insured can help weed out reasons for rejections like - claims filed outside coverage, claims not payable and exhausted limits, suggested Policybazaar.
Another interesting observation in the report was that the least number of claims (2 per cent) were rejected in the sum insured range of Rs 50 lakh and Rs 1 crore, whereas the highest number of rejected claims (53 per cent) fell in the sum insured category of Rs 5 lakh.
