Times of India
09 July 2010
By Viju B
Health Insurance Disputes Rise As Companies Cite ‘Frivolous’ Cases
Urmila Shah got a shock when the insurance claim for her knee operation was rejected as the insurer claimed it was a degenerative disease and so came under the category of pre–existing illnesses. Shah then filed a case against the insurer, Royal Sundaram, with the Central Mumbai consumer forum, which directed the firm to pay Rs 5.5 lakh–the expenses incurred for the operation.

Dadar resident Hoshi Khan’s insurance premium was jacked up by 400% to Rs 55,952 when it came up for annual renewal. He sent a cheque of the original premium amount and then lodged a complaint against United India Insurance Company. The South Mumbai consumer forum not only directed the firm to reduce the premium to the original amount, Rs 10,555, but also asked it to pay a compensation of Rs 10,000.

Bandra resident Amina Sheikh’s (80) annual premium was jacked up 200% within a year. When she protested, National Insurance reduced it to 150%. Sheikh approached the consumer forum which directed it to remove the extra load of around Rs 28,800 and retain the original premium of Rs 13,112. The forum also awarded a compensation of Rs 17,000.

Consumer activists say there has been a drastic increase in the number of health insurance cases that reach consumer courts in the past two years, as insurers deny consumers’ claims citing frivolous reasons.

It is estimated that nearly 65–70% of all insurance claims cases that reach the consumer forums are health–related. On Thursday alone, at the South Mumbai consumer forum, 20 of the 24 insurance cases that came up for hearing were related to health insurance.

“We are seeing a spurt in the insurance claims as insurance firms have been denying mediclaims stating that the policy holders have some kind of pre–existing illness or other,” said consumer activist Jehangir Gai.

The latest bone of contention is the circular issued by some insurance firms stating claims beyond 30 days will not accepted. Activists said this is one way for insurance firms to wriggle out of post–hospitalisation claims which can go up to 60 days. “The policy also gives provision for claiming post–hospitalisation expenses like follow ups and consultations. But insurance firms reject these claims,” Gai said.

Policy holders are not aware of the fact that they have a provision to select the Third Party Administrators (TPAs), who act as facilitator to look into the claims and speed the claim amount. “But insurance firms do not tell the policy holders about this provision and decide on the TPAs according to their preferences,” Gai said.

Arun Saxena, president of the International Consumer Rights Protection Council said in the last one year alone ICRPC has got 250 health insurance cases from across the country. “A majority of the cases relate to claims rejected ostensibly due to pre–existing illness. The Insurance Regulatory Development Authority (IRDA) should look into this issue and take action against the firms,” Saxena said.

Dos And Don’ts When Taking A Policy

• Properly answer all questions in the policy like the preexisting illness clause. Do not hide any ailments as it can be disputed later on
• Scrutinise the policy, all its terms and conditions
• Read the fine print carefully
• The renewal has to be sent to the insurance company and proper acknowledgement has to be taken from the company. A photo copy of the cheque and the covering letter has to be kept with the insured
• Look at the track record of the insurance company
• Insist on your right to chose the Third Party Administrator
• Do not fill up a fresh proposal form after the policy is being issued