What are the reasons why you may get shocked while making a health insurance claim?
There are so many bad reviews for different insurance companies and policies that they have rejected their claims or didn’t pay in full. Many times such incidents happen because customers are not aware of many rules and best practices for making claims. So we did a podcast with Mahaveer Chopra of Beshak.org to understand the top 5 reasons for this (listen to the full podcast + Q&A below).
5 major reasons for disputes and claim rejection in health insurance
#1 – Proportionate deduction
Proportionate deduction occurs when you choose a hospital room whose rent is higher than what you are eligible for. In this case all other expenses (besides room rent) also get deducted in the same proportion and you can lose a lot of money.
For example, if you were eligible for a room of Rs 5,000 per day, but if you opted for a room of Rs 10,000, a proportionate deduction would be applicable for your entire bill and not just the room rent portion. So if the entire bill is 10 lakhs, you will be paid only 50% or 5 lakhs in claims.
Many old policies or PSU policies still have room rent limits. Even corporate policies have a certain limit on the amount on their policies, so it is always suggested to check this before choosing a hospital room.
#2 – Not disclosing a pre-existing disease
A major reason for many claims dispute is when your claim is rejected or partly paid because you did not mention any previous illness, surgery, problem which you had but never disclosed it did.
A lot of people think that only a recent surgery or a major illness has to be disclosed. when buying health insurance, But the truth is that even the smallest details have to be shared. That little surgery 20 years. Back then, a 2-month drug for high blood pressure that was a long-standing, some disease that was cured long ago – everything matters, simply because all this data is used by the insurance company to measure a risk factor. is used for.
You never know how all these medical issues are related to each other.. Do not skip this, otherwise it will be used against you. And not necessarily mentioning every detail increases the premium!
#3 – Fair and customary fees
Don’t assume that insurers will always settle any amount of the bill that the hospital charges. Health insurance has a clause of “reasonable and customary charges” where the insurer will pay only if the hospital fee is reasonable and has an acceptable rationale. This means that it should be close to other hospitals of similar nature at a given location on average charges.
So if the surgery costs an average of 2 lakhs, then if you go to a hospital that charges 10 lakhs for it, the company will not pay. It is your responsibility to make sure that you also put some thought and effort into making sure that you are not overcharged just for it. Insurance is not a license to overspend or enjoy hospitalization in lavish hospitals.
A slight deviation from the average cost is fine, but too much deviation will not be accepted and you may face a hard blow later. So better spend as if you are paying from your own pocket.
#4 – No coverage for “consumables”
Imagine you went to a restaurant for your dinner and in the bill, the restaurant charges you 2 hours rent for the AC, dinner plate, chair you use apart from the food.
you will be scared! , Correct!
You would say, but you always thought it was part of the whole deal and that you needed to provide dinner.
That’s exactly what the consumable expense is. These are various little things that will be needed for medicine/surgery etc. Which will be part of the room rent or the cost of the surgery and will not be charged separately (but hospitals still charge many of these separately).
Insurance companies do not pay for these consumables separately because they consider them included in the hospital package. Examples of these things are…
- cleaning kit
- hearing aids
- adhesive bandage
- crepe bandage
- cotton roll
- x-ray film
- surgical drill
- hair removal cream
Note that the cost of consumables can normally be around 2% – 10% of the total bill, but in the COVID times, we have seen that the consumables themselves were making up around 15-25% of the hospital bills and their payment was not the insurer.
There are some additional riders for consumables that one can buy while buying a health insurance policy (this will cost extra)
#5 – Unnecessary hospitalization
Insurance companies will not pay for unnecessary hospitalization.
Unless there is an active line of treatment in the hospital that is really needed, this will not be considered a valid claim. Let me give you an example that Mahaveer Chopra shares in our conversation. Let us tell you that a 50-year-old man has chest pain and his family members rush to the hospital. The doctor checks everything out and tells you that you only want to be admitted for 1 day so they can monitor things just to be safe.
Now, this is not a cure. It’s just monitoring things and isn’t really needed. It may be needed in your world because you want to be safe and because it came as a doctor’s suggestion, but from an insurance point of view, it is not a cure. Most of you would also agree that hospitals do this only to charge a day’s fee and to allay the fear.
I am not denying the need for it. But insurance companies will consider it invalid.
Another good example is a COVID case. Just because someone got covid and their oxygen level is 90, it doesn’t mean they go to the hospital because things can still be treated at home. If someone wants to play safe and wants to be admitted just to play safe, it is his personal choice, but it is not payable (unless things get really bad and then the doctor has recommended hospitalization) is inevitable)
#Bonus Tip – Don’t Forget PRR
Many times people forget small things while claiming but always remember PRR principle.
What does PRR mean?
Always ask the doctor to give a prescription for every test, surgery, medicine… don’t forget this
Always ask the doctor to give the receipt, make sure it is dated (pre-printed or stamped, but not handwritten)
Always receive reports wherever applicable (in most tests)
Very often you have to send these to get reimbursement (even in cashless, you may have to send documents to claim reimbursement before and after hospitalization), and if you miss any of these Then you will not be paid. Pennies.
How was your health insurance claim experience?
I hope this was helpful and please share your inputs and claim experience in the comments section. Did you pay the full amount or was there some major deduction?