The Covid-19 pandemic caused at least 10 percent spike in the private hospital treatment cost in India, while India’s living wage is on the wane. The health insurance companies ceased this moment as a field day to hyperbolically raise their premiums from 2022. It is now known that health insurance policies with deductibles and multi-year premium discounts can cushion the premium hike impact, but coverage will not be comprehensive. The Group health, cyber cover now 40 percent to 100 percent costlier. Reinsurers led by GIC Re and general insurers led by New India Assurance (NIA) have hiked their premiums by up to 20-30 per cent in certain segments – other than health and cyber — depending on the group and customers. A large population of India’s workforce, who work in the unorganized sector, can never afford private healthcare. Their lives only go to rack and ruin if public healthcare fails to accommodate them. Since the utilization of health insurance coverage has gone up substantially due to Covid-19-linked hospitalization the companies have applied ever stricter due diligence to approve claims, particularly pre-authorization of cashless hospital admission. Such scrupulous attention to claim details is warranted in every respect, however, on many occasions these repudiation of the claims seem to be serving the company’s own interest of boosting bottom-line than obligation towards their clients. Notwithstanding, there is a lot of pent-up demand too, as those who had postponed their surgeries and procedures are now filing claims. So, insurance companies are bearing the brunt of higher claims. This side of the story too is undeniable. Ironically, this seems to be helping many health insurers as their repudiation of claims ranging from sublime to ridiculous.
The health policyholders are often dismayed with their claim repudiation when they are confronted with complex details of the policy which the company rarely mentioned to them earlier. Mostly they are buried in the fine print of the terms and conditions. The common perception is the insurer is always keen on finding faults and repudiating the claim rather than cooperating with the policy holder to understand the details of the dispute. Health insurance policy has one of the most complex product structures in terms of coverage and its reimbursement process. It involves many exclusions with varying conditions, and many terms of such exclusions can be contentious. Besides, there are many inclusions with sub-clauses and different layers of admissibility. The Insurance Regulatory and Development Authority of India (IRDA) has mandated that no health insurance company can reject an eligible claim of the policyholder if the policy has completed eight years. ''The moratorium would be applicable for the sums insured of the first policy and subsequent completion of eight continuous years would be applicable from the date of enhancement of sums insured only on the enhanced limits," according to IRDA.
Some common causes for claims being rejected are non-disclosures, partial disclosures and wrong disclosures of significant details such as age, nature of occupation, income, current insurance plans, major ailments or pre-existing medical conditions. Not always the process of investigation or verification is done as the companies are obligated to conduct under the IRDA framework. I recently went through a harrowing experience of pre-authorisation approval from Care Health Insurance (formerly Religare Health Insurance Company Limited). My son, Chris Das, was due for a surgery at Fortis Healthcare in Gurugram. The admission to the hospital and his surgery delayed as Care Health Insurance repudiated the claims under the most implausible ground. ‘’The decrease was a pre-existing condition which was not disclosed to the insurance company,’’ the company’s repudiation letter received by us like a Dear John letter. I countered with a strong rebuttal explaining how it was grossly trumped up by the company as it was such a freak excuse to avoid obligation of payment. I corroborated my case with all doctors’ prescriptions, diagnostic test reports and case history. Each of these documents set the seal on my claim, each turned out to be clinching evidence that was why this ''claim case'' must be held beyond any reasonable doubt.
Apart from repudiation of the claim the company refused to engage with us any further, except a string of auto-generated claim/complaint ticket numbers. When the claim was escalated to the insurance ombudsman the Care Health Insurance suddenly realised they must go on a damage control mode. The peaceniks, so called the customer grievance cell members, made calls to amend the errors. However, the matter posed beyond them. It was not a mere repudiation of claim, but a legit claim that risked life of an ailing adolescent by delaying hospital admission and subsequent surgery. Not surprising why so many customer grievances are listed in Quora and Moutshut. Prabhaskar Sharma decries: ''Care health insurance never gives approval for cashless in network hospitals nor reimbursement. I have filed a case for cancellation of my policy no. 35457549 and refund my three year premium.'' Chiranjeev Dua censures: ''I am having a very bad experience of their [Care Health Insurance] support service...very rude and misguide you with term and conditions.'' Anuj Shukla, a lead software engineer, was denied his brother's admission in the hospital despite doctors recommendation for the same. The Care Health Insurance reasons, ''All vitals and investigations are within normal limits, the patient can be treated on OPD basis, hence, admission not justified''.
Another 70-year old senior citizen condemns: '' Worst Medical Insurance provider in the industry is Care… Poor claim settlement and worst customer service...They appear only during renewals...Just because they want to reject your claims, they will come up with stupid and irrelevant queries...This is our policy number just in case someone's needs to authenticate 19815015'' Gyanesh Gunjan , a Kanpur resident, when making a claim for the hospital admission on account of hip surgery of his brother who fell from a motor bike the Care Health Insurance insisted on an FIR copy. He fumes, ''I asked them where the police write FIR for falling from the bike?'' Deepak Sharma, a consultant at Ernst and Young, denounces the cashless facility as dubious. ''I have claimed three times for a cashless facility (including once for my father). Each and every time Care Health Insurance denied on the ground that the same could be cured in OPD.'' Tapas Saxena disclosed he was ticked off and driven round the twist by the customer support team of Care Health Insurance. ''My relative is a cancer patient and they withdraw the approved amount at the discharge despite all the documents provided during the query.'' Sanjay Singh, who works as a retail manager at Clothing and Apparel, warns, ''Never ever buy any policy from them [Care Health Insurance]''. Srideepthi Katari fumes, ''It has become a torture to claim back money from these people... They [Care Health Insurance] literally put your calls on hold and then disconnect your call, classic fraud behaviour.'' Rohit Singh, a Mumbai resident, excoriates the Care Health Insurance, ''It makes no sense to invest so much for care which rejects the claim always and wants so much of idiotic stuff to be done...'' Varun Kulhari , co-founder of Goaplanners, inveigh against Care Health Insurance, ''Highly bad experience! My policy no is 18684093...They promise you a lot before taking the insurance and just after you pay, they don't care.'' Another disgruntled policy holder Jatin denounces Care Health Insurance: ''I personally think that they changed their name from Religare to Care to cover the bad reputation...they don't honour your claim.'' In September 2020, Religare Health Insurance rebranded itself as Care Health Insurance. The company has changed its logo with a tagline 'Health ki Guarantee'. As a result, even during the onset of Covid pandemic, the overall business of the company grew by 31 percent in FY20. Further, as the standalone health insurance industry recorded a growth rate of 21%. In addition, the company posted a profit after tax of ₹65.65 crore in FY20. According to a published story in Deccan Herald on June 9, 2019, A 59-year-old woman, Rathna Bai, a resident of Vyalikaval, filed a complaint against Anuj Gulati, MD and CEO of Religare Health Insurance, Vijay Bhaskar, Religare’s Bengaluru manager and 13 others including doctors at Diya Healthcare, for producing fake medical bills on her insurance policy and claiming it without her knowledge. She alleged in her complaint that the accused forged medical certificates of her health checkup and despite knowing they are fake, Dr Vijay S, product head of Religare, submitted them to the insurance ombudsman in Bengaluru in June, 2018. Following directions from the 45th Additional Chief Metropolitan Magistrate, Koramangala police booked all the 14 accused under IPC sections 420 (cheating), 384 (punishment for extortion), 426 (punishment for mischief), 464 (making a false document), 471 (using as genuine a forged), 465 (punishment for forgery) among others. Care Health Insurance's NBFC arm Religare Finvest Limited (REL) has been barred from undertaking fresh business as it is under corrective action plan (CAP) of the Reserve Bank of India (RBI) since January 2018 due to weak financial health. In line with its debt restructuring plan, the company paid Rs 400 crore to lenders on March 31, 2021. The executive chairperson of Care Health Insurance and RFL CMD Dr Rashmi Saluja admitted in her interview to Business Today on Feb 15,200, the alleged fraud perpetuated by its (RFL) erstwhile promoters and management. It is to be noted the erstwhile promoters Malvinder and Shivinder Mohan Singh, who had allegedly siphoned off funds, are currently serving their prison term. On account of REL's dire need for funds to settle accounts and debt restructuring the Care Health Insurance is possibly treated as a cash cow. The repudiation of pre-authorisation of cashless hospitalisation and reimbursement of legit claims seem to be serving the company's financial goals. The IRDA publishes the Incurred Claims Ratio for health insurance companies in India. Incurred Claim Ratio is basically the overall value of every claim a company has paid divided by the total sum of premium collected during the same period. Incurred Claims Ratio (ICR) shows the ability of a company to make payments towards claims. If the ICR of a company is more than 100%, it indicates that the amount of money given away by the company as claimed is more than the amount of money collected by the company as premium. In such cases, the company will find it hard to sustain itself, and as a result, will either resort to rejecting some borderline claims, raise the price to better manage claims, or change their product altogether. In the last financial year, despite the raging pandemics, the Incurred Claims Ratio (ICR) of the majority of the private and standalone health insurers have been well below 100 percent. A financial year 2017-18 reveals Universal SOMPO had an ICR of 104.17% and Reliance of 106.54 percent while Care had an ICR of 51.97 percent and Raheja QBE Insurance had a jaw-dropping 18.19 percent. The ICR is a revelation. It tells who is amassing as the patients go through the angst and on the dumps. If a cashless reimbursement claim gets rejected by an insurance company, the policy holder should first approach the company’s internal grievance redressal mechanism and the Integrated Grievance Management System (IGMS), which has been set up by the IRDA. If the policyholder’s claim is not settled or if the claimant is not satisfied with the resolution provided by the grievance redressal mechanism, the next option is to approach the insurance ombudsman. But for a lay person, it seems to be a long trek down the pitch-dark tunnel. Will there be light at the end, no one knows! By Sarat C. Das