Health insurance claim rejections: Here are the common mistakes you must avoid

Health Insurance

Many health insurance policyholders in India often face challenges during the claims process. When claims are rejected, consumers often doubt the intentions of the insurance company. However, one needs to understand that an insurance policy is a legal and financially binding agreement between the policyholder and the insurance company where both parties are required to be equally responsible.

When health insurance claims, both cashless and reimbursement, are rejected, it is for a variety of reasons, many of which could have been avoided with a little extra attention. Let’s take a closer look at some of the more frequent causes of claim rejections.

1. Undisclosed pre-existing conditions

Insurance policies are based on predefined principles, one of which is the “Principle of Utmost Good Faith”. This requires both the policyholder and the insurance company to disclose all relevant information. Often, consumers may fail to disclose pre-existing medical conditions such as high blood pressure or diabetes at the time of buying the insurance policy, which is a significant reason for claim rejections. To ensure a hassle-free claims experience, one should be transparent about one's medical history at the time of purchase.

2. Unmet policy terms and conditions

Claims can often be rejected if they do not meet the policy’s terms and conditions. For example, a claim may be denied if it is filed during the waiting period for pre-existing conditions  - that is, the initial period of up to three years post policy purchase - when such claims are not  such as past fractures with implants or a previous episode of angioplasty. Similarly, claims for planned treatments like cataracts or hernia surgery may be rejected if made within the waiting period. Another common reason for full or partial claim rejection is a lack of awareness about policy limits, such as room rent caps.

Also read: Health insurance claim rejected? Approach the insurance ombudsman for complaint resolution

3. Treatment not covered

Every policy has specific inclusions and exclusions that are mentioned in the policy as mandated by the Insurance Regulatory and Development Authority of India (IRDAI). Some treatments, such as experimental procedures or cosmetic surgeries, are generally not covered by most insurers. Claims for such treatments are often denied if not covered under the policy.

Apart from these reasons, other factors can also lead to partial or full claim denial. These can include cases where the cost of treatment exceeds the policy’s sum insured, the policy has lapsed due to non-payment or expiry or due to non-coverage for outpatient treatment.

Know how to prevent claim rejections

To avoid health insurance claim rejections, it's important to take some key steps well in advance, even before you need to file a claim.

1. Disclose pre-existing conditions at the time of policy purchase

Always provide accurate information about your medical history—don’t overlook the details. While it’s essential to declare chronic conditions such as diabetes, hypertension or cancer, it’s equally important to disclose smaller concerns like lumps, arthritis or any other health issues. Buying health insurance provides peace of mind but complete and honest disclosure ensures even greater reassurance.

Also read: Faced with health insurance premium hikes and claim disputes? Here’s what policyholders can do

2. Understand policy terms in detail

A significant portion of rejections occurs due to unmet policy terms. Therefore, it is crucial to familiarise yourself with:

- What your policy covers and excludes.
- Specific conditions or treatments that may need prior approval or have a waiting period.

3. Maintain policy continuity

Keep your policy active by paying premiums on time, as even brief coverage gaps can lead to claim denials. Renew your policy well in advance instead of waiting until the last day. Using auto-pay options can help ensure timely payments.

4. Seek pre-authorisation for treatment

In cases of treatment procedures that are planned, it is helpful to intimate the admission in advance to the insurance company. This will help secure an early approval for your treatment. Speak to the insurance company to confirm what is required and follow the necessary steps.

5. Organise all documents in advance

Keep your medical records, prescriptions, bills, payment receipts and insurance details well-organised. Missing documents can delay your claim settlement.

Health insurance claims are meant to provide peace of mind during challenging times. While claim rejections can be frustrating, most are avoidable with a little preparation and attention to detail. You can significantly reduce the likelihood of a rejected claim by understanding your policy, maintaining proper documentation and adhering to your insurer’s guidelines.

Remember, staying informed and proactive is crucial to a smooth claims process. When in doubt, reach out to your insurer for clarification. By following these tips, you’ll not only protect yourself from unnecessary financial stress but also ensure you get the full benefits of your health insurance plan.

(The author is head, health claims and underwriting, at Magma General Insurance)

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