Most health insurance companies have a healthy claim payment ratio and are taking all possible efforts to improve it further. However, there are certain instances where the health insurance company rejects the claim as a last resort. As a policyholder, you would never like to face this situation of a health insurance claim getting rejected. The event of a self or family member getting hospitalized is stressful, and the claim getting rejected only adds further to the stress. In this article, we will understand the 9 top reasons why health insurance claims get rejected and what you can, as a policyholder, do to avoid them.
9 top reasons why health insurance claims get denied and steps to overcome them
The following are some common reasons why most health insurance claims get rejected. We have also advised the steps you should take to avoid rejection.
1) Incorrect information or misrepresentation
While filling out the health insurance application form, you should ensure that all the information you are filling out is accurate. There should be no intentional or unintentional misrepresentation of any information; else, it can lead to claim rejection. The information may be about your:
a. Age,
b. Income,
c. Existing medical insurance policies,
d. Profession (specifically if you are in a hazardous occupation),
e. Hobbies (specifically if you are into adventure sports like hiking or scuba diving), etc.
All the above is material information for the health insurance company to decide whether they should accept the health insurance application and at what premium.
You should fill out the application form yourself rather than asking your agent or someone else to fill it out. They may not have all the required information about you to fill out the form accurately.
2) Information about pre-existing illnesses and bad habits
Non-disclosure of information about own pre-existing illnesses, family history of illnesses, sedentary lifestyle, habits like smoking, alcohol drinking, etc., can lead to rejection of health insurance claims. Some people may conceal this information to avoid paying higher premiums and policy rejection.
While filling out the health insurance application form, you must disclose the details of any pre-existing illnesses that you may be suffering from. If some disease runs in your family, you should mention it in the family history or medical history section.
If you smoke, the insurance company may ask about how many cigarettes you smoke daily. If you consume alcohol, you may be required to disclose the quantity of alcohol you consume and the frequency.
All the above information helps the health insurance company to price the risk appropriately. If required, the insurance company may include an exclusion or appropriate waiting period for coverage of a specific pre-existing illness.
3) Making a claim during the waiting period
Every health insurance plan may have certain waiting periods. If a claim is made during this waiting period, it will be rejected. Some of these waiting periods include:
a) 30-day waiting period
When a new policy is issued, there is a 30-day waiting period during which no claim can be made. The exception for this is any claim arising due to an accident.
b) Maternity waiting period
If the policy provides maternity cover, it is usually applicable after a waiting period of 24 to 36 months. Also, the cover may be limited to 2 pregnancies.
c) Waiting period for specified diseases/procedures
The treatment for specified diseases/procedures can be claimed after a 24-month waiting period from the policy’s inception. Some of these include cataracts, varicose veins, piles, sinusitis, etc. The complete list of these diseases/procedures is specified in the insurance policy document.
d) Waiting period for pre-existing diseases
The claim for treatment for pre-existing diseases can be availed after a waiting period of 24 to 48 months from the date of commencement of coverage.
e) Critical illness waiting period
The claim for treatment of any critical illness may be covered after a waiting period of 90 days from the policy inception date.
Please read the policy wording for details of all the above waiting periods to understand how and when you can make a claim to avoid rejection.
4) Making a cashless claim at a non-network hospital
If a cashless claim is made at a hospital that is not a part of the insurance company’s hospital network, it will be rejected. Hence, if you want to make a cashless claim, check with the hospital before admission if it is impaneled with the insurance company as a network hospital.
You will have to pay the hospitalization bill from your pocket for treatment taken at a non-network hospital. Later, you can submit a reimbursement claim with the health insurance company.
5) Claims for services not covered
Certain services are not covered under every health insurance plan. They may be included in some policies with certain limits or other terms and conditions. If you make a claim for any of these services that are not covered, the health insurance company will reject the claim. Some of these services can include:
If you want to make a claim for any of the above, read your policy document to check whether they are covered. If they are covered, check the extent to which they are covered and the related terms and conditions.
6) Exclusions
Certain treatments/procedures may be considered standard exclusions by all insurance companies. It means most plans will not cover them. Some of these may include:
a. Cosmetic or plastic surgery
b. Change of gender treatment
c. Treatment due to participation in hazardous or adventure sports, such as rock climbing, motor racing, horse racing, scuba diving, gliding, etc.
d. Treatment due to a person committing or attempting to commit a breach of law with criminal intent
e. Treatment for alcoholism, drug abuse, or any other addictive condition
f. Expenses related to sterility and fertility, etc.
The above of some of the exclusions included in most health insurance policies. For exclusions specific to your policy, check the policy wordings (Exclusions Section)
7) A claim under a lapsed policy
A health insurance policy is valid for a specific duration, i.e., one year or multiple years for which the premium has been paid. Once the specified duration is over, the policy must be renewed by paying the renewal premium.
The policy will lapse if you don’t pay the renewal premium within the specified time. If you make a claim under a lapsed policy, the insurance company will reject the claim. Hence, check the expiry date of your policy and pay the renewal premium before or on time to keep the policy active. It is recommended that you set up an auto-debit mandate for your policy to pay the renewal premium.
8) The claim amount is higher than the sum assured
Every health insurance policy has a specified sum insured. What if the claim amount is higher than the sum insured left (in case you have made claims earlier in the same year)? The insurance company will approve the claim up to the sum insured left, subject to policy terms and conditions.
With medical inflation increasing every year, you should review your health insurance coverage amount every few years. Buy/upgrade to a higher cover amount to keep pace with medical inflation.
9) Not informing the insurance company on time
If you don’t inform the insurance company about hospitalization within the stipulated time, the insurance company can reject your cashless treatment claim. If it is a planned hospitalization, you may get the authorization prior to hospital admission. If it is an emergency hospitalization due to an accident or any other reason, inform the insurance company within 24 to 48 hours of hospitalization, as per policy terms.
Ensuring that your claim is accepted
We have understood the top reasons why health insurance claims get denied and what you can do to avoid that. Make sure you fill out the health insurance form yourself and disclose all information accurately. Once you get the policy document, read all terms and conditions relating to the various waiting periods, the network hospitals, exclusions, etc. Pay the renewal premiums on time. In the event of a hospitalization, inform the insurance company within 24 hours. If you follow these suggestions, it is very likely that your health insurance claim will be accepted.
