Health Insurance: Up to 26% of reimbursement claim amount gets deducted by insurers – Findings

Settlement of health insurance reimbursement claims on an average takes about 20 to 46 days from the date of intimation to the insurer, reveals a survey conducted by leading insurer broker SecureNow.

The survey points out that patients are quite prompt in informing the insurer about the claim with most of them intimating the concerned insurance company within a week of hospitalization.

However, on the other hand, the insurance companies take on an average between 7 to 108 days to settle the claims related to maternity. Caesarean sections take the longest time 9 to 135 days and chemotherapy the shortest period—12 to 35 days.

The data tabulated by the SecureNow makes it clear that “while patients don’t take a lot of time intimating the insurer for a claim reimbursement upon being admitted, the average time for an insurer to settle the claims is way higher. In a typical claims processing timeline, the maximum time is taken between intimation and settlement.”

Interestingly, Caesarean section delivery claim settlement time takes 25 per cent more than a typical normal delivery case.

According to the SecureNow survey, about 13 to 26 percent of the claimed amount is deducted from the final claim as they are deemed as “uncovered consumables and administrative expenses”.

As regards the cost and duration of hospitalization, the survey said that maternity and chemotherapy have the highest per-day hospitalization costs, while dengue and other viral infections, including Covid, have the longest hospitalization of 4 to 5 days.

Chemotherapy, according to the Survey, “unsurprisingly, is very heavy on pockets for an average person despite the duration of stay for the patient being hardly a day.”

It further observed that public sector insurers are often able to negotiate hospitalization costs that are significantly lower than private sector insurers, sometimes by as much as 50 per cent.

The public sector insurers under the General Insurance Public Sector Association (GIPSA) have a significant advantage through lower hospital rates. This translates into lower claim costs for group health insurance and consequently lower premiums.

The claims cost could be 10 to 30 per cent cheaper when insurance is bought from the PSU insurers that have GIPSA rates, said the Survey.

Kapil Mehta, co-founder of SecureNow, said “There are close to 10 million health insurance claims each year. This in itself is a sign of how the health insurance industry has evolved. The next step is to publish detailed claims information. This shines a light on the strengths and improvement areas in settling claims. Our report is an important step in that direction.”

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