Tue. Sep 26th, 2023

What are some of the reasons because of which you may get a shock while making a health insurance claim?

There are tons of bad reviews for various insurance companies and policies that they rejected their claims or didn’t pay in full. A lot of times these incidents happen because customers are not aware of many rules and best practices of making claims. So we did a podcast with Mahavir Chopra of Beshak.org (listen to the whole podcast + Q&A below) to understand the top 5 reasons for this.

#1 – Proportionate Deductions

Proportion deduction happens when you choose a hospital room whose rent is higher than the one you are eligible for. In this case, all the other expenses (other than the room rent) also get the deduction in the same proportion and you can lose a lot of money.

For example, if you were eligible for a Rs 5,000 per day room, but if you choose Rs 10,000 room, then the proportionate deduction will be applied for your entire bill, not just the room rent part. So if the entire bill is for 10 lacs, you will be just paid 50% or 5 lacs in claims.

A lot of old policies or PSU policies still have a room rent limit. Even corporate policies have a fixed amount limit on their policies, so it’s always suggested to check this before you choose the hospital room.

#2 – Not disclosing pre-existing illness

A big reason for many claims dispute is when your claim is rejected or partially paid because you didn’t mention some past illness, surgery, issue which you had but never disclosed it.

A lot of people feel that only some recent surgery or a big illness has to be disclosed while buying health insurance. But the truth is that even the smallest of details has to be shared. That small surgery 20 yrs. back, that 2 months of medication for hypertension which one went through the long back, some illness which got cured long back – everything matters, simply because this all data is used by the insurance company to gauge the risk factor.

You never know how all these medical issues are linked to each other.. Don’t skip it, else that will be used against you. And the premium does not necessarily increase by mentioning every detail!

#3 – Reasonable and Customary Charges

Don’t think that insurers will always settle any amount of bill which the hospital charges. There is a clause of “reasonable and customary charges” in health insurance, where the insurer will only pay if the hospital charge is reasonable and has an acceptable logic. That means that it should be close to what others hospitals of the same nature on average charge in a given location.

So if surgery is costing 2 lacs on average, the company will not pay if you go to a hospital that charges 10 lacs for it. It’s your responsibility to make sure that you also put some thinking and effort into making sure that you are not overcharged just for the sake of it. Insurance is not a license to overspend or enjoy hospitalization at lavish hospitals.

A little deviation from the average cost is fine, but too much deviation will not be accepted and you may be getting a rude shock later. So better spend as if you are paying from your pocket.

#4 – No coverage for “Consumables”

Imagine you went to a restaurant for your dinner and in the bill, the restaurant also charges you for the AC, the food plate, the 2 hr rent for the chair you used apart from the food.

You will freak out! .. RIGHT!

You will say, but you always thought that it’s part of the whole deal and it’s all needed to provide you with the dinner.

That’s exactly is what consumable expenses are. These are various small things that will be required for the medication/surgery etc. which shall be all part of the room rent or the surgery cost and shall not be charged separately (but hospitals still charge many of these separately).
Insurance companies don’t pay for these consumables separately as they consider them as inclusive of the hospital package. Examples of these things are…

  • Masks
  • Gloves
  • Cleaning kits
  • Spectacles
  • Hearing aids
  • Adhesive bandage
  • Crepe bandage
  • Cotton roll
  • X-ray Film
  • Surgical drill
  • Hair removal cream

Note that the consumables cost can form around 2% – 10% of the overall bill in general, but in COVID times, we have seen that the consumables themselves was forming around 15-25% of the hospital bills and they were not paid by the insurer.

There are some extra riders for consumables that one can buy while buying the health insurance policies (it will cost extra)

#5 – Unnecessary Hospitalization Case

Insurance companies won’t pay for unnecessary hospitalizations. Unless there is an active line of treatment at the hospital which is really needed, it will not be considered a valid claim. Let me give you an example that Mahavir Chopra shares in our conversation. Let’s say that a 50 yr old

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