The health insurance system in India is failing to deliver on its promise of providing a safety net for families in need of medical care. Despite the industry’s rapid expansion, with a growth rate of 9% in the full financial year FY25, and a gross premium collection of approximately Rs. 1.18 lakh crore, the system is plagued by bureaucracy, delayed responses, and claim denials. Insurers are rejecting claims at an alarming rate, with only 71.3% of claims being approved by value in FY24.
The cost of staying insured is also skyrocketing, with premium hikes of 20-25% each year, far outpacing wage growth. Medical inflation is running at 13-14% annually, and families are struggling to keep up with the rising costs. A LocalCircles survey found that nearly half of policyholders had faced partial or total claim rejections in the past three years.
The health insurance process is also overly complex, with multiple layers of approval and a lack of transparency. Third-Party Administrators (TPAs) are often incentivized to reject claims, and hospitals are frequently left waiting for reimbursement. Patients are being forced to foot the bill or chase updates, leading to a cycle of frustration and uncertainty.
The regulatory oversight is also patchy, with the Insurance Regulatory and Development Authority of India (IRDAI) failing to effectively enforce regulations. There is a need for a common regulator to cover hospitals, TPAs, and insurers under one umbrella to address the nexus between them.
To fix the system, bold and systemic reforms are needed. This includes digitization, automation, and healthcare exchanges to improve claim processing, as well as providing clear and simplified policy documents to consumers. Regulators must strengthen awareness campaigns and provide accessible channels for patients to escalate complaints.
Until reforms take hold, families are being forced to fight every step of the way to get their claims approved. The health insurance system in India has become a high-stakes test of patience, persistence, and luck, rather than a safety net. It is essential for consumers to be vigilant and keep meticulous records, push for escalation within insurers, and file complaints on the Bima Bharosa portal or approach the Insurance Ombudsman or a Consumer Court if necessary.
The stories of Sumit Kumar, Rahul Bansal, and Vipin Vishnu Ajayan, who have all faced claim rejections and delays, highlight the human impact of the failing health insurance system. It is crucial for the government and regulators to take immediate action to address the issues and ensure that health insurance in India becomes a reliable and trustworthy safety net for families in need.
Experts like Dr. Girdhar Gyani and Dr. KC Haridas are emphasizing the need for a common health regulator, digitization, and automation to improve the claim processing. Dr. Haridas also suggests that using a technically competent insurance broker can help in getting claims settled, and it does not increase premiums as the commission is already built in.
In conclusion, the health insurance system in India is in dire need of reform. The current system is failing to deliver on its promise, and families are suffering as a result. It is essential for the government, regulators, and insurers to work together to create a more efficient, transparent, and patient-centric system that provides a reliable safety net for those in need.