Many people submit claims without realising that their group health insurance policy might not cover everything. As a result, some parts of the claims get resolved, while others do not. This often leads to situations where claims are only partially settled. This piece will explore the typical reasons behind partial claim settlements in group health insurance, along with examples.
9 Reasons Why Your Claim Is Not Completely Settled
- Non-Medical Expenses Involved
Tarun underwent medical treatment and submitted a cashless claim. However, the insurer covered only 95% of the medical bill. The remaining 5%, which included non-medical expenses like gloves, cotton, admin fees, registration fees, etc., was not covered under the Group Health Insurance Policy. Consequently, Tarun had to personally cover these non-medical expenses.
During the claim settlement process, numerous insurers may have exclusions in group health insurance, they are non-medical expenses such as tissues, gowns, gloves, handwash, or cotton used during a patient's hospital admission. Patients are typically expected to cover these expenses themselves.
- Ignoring Changes in Policy Terms and Conditions
Saanvi had a Group health insurance policy with a 'No Copay' feature last year. However, when she filed a surgery claim this year, she was unexpectedly required to pay a 10% copay. Saanvi was unaware that her organisation had changed the policy terms during renewal. This experience made her realise the importance of regularly checking policy terms to prevent future surprises.
- Room Rent Capping
Consider Aman, with a group health insurance coverage of 5 lakhs and a daily room rent allowance of 1% for normal rooms and 2% for ICU. This implies that his room rent is limited to 5,000 per day for a normal hospital room and 10,000 per day for an ICU. Once during hospitalisation, he opted for a normal room priced at 8,000 per day. When he filed a claim for the total amount, the claim was partially approved. Exceeding the room rent limit by 3,000 resulted in an out-of-pocket expense for him, with a proportionate deduction.
Therefore, it is important to check your group insurance policy's room rent capping and adhere to it to prevent partial claim settlements.
- Disease Wise Capping
Swathi has a group health insurance coverage of 3 lakh, but she is unaware of the disease-specific limits outlined in the policy. She underwent cataract surgery for one eye which cost her 30,000. When she filed a claim with the insurer, the insurer notified her that certain diseases have predetermined maximum payouts. In her case, the cataract maximum payout is 20,000 and hence, only 20,000 of her claim will be approved.
Learn from Swathi. Always review your group health insurance policy, including disease-specific limits and maximum payouts for each ailment to avoid such situations.
- Maternity Benefits
Ria underwent a C-section labour which cost her 75,000. However, her group health insurance had a maternity benefit limit of 50,000. Hence, the insurer covered only 50,000, and she had to bear the remaining cost.
Many insurers cap maternity-related expenses at 50,000, with a few extending it to 1,00,000. It's crucial to know your insurance company's limits for such expenses.
- Copay Involved
Ravi holds a group health insurance policy of 3 lakh coverage with a 20% copay. He underwent a treatment costing 10,000, resulting in a copay of 2,000 (20% copay) from his pocket, while the insurance company covered the remaining 8,000.
A copay represents a percentage or fixed amount that you must pay against the medical expenses while the insurance company settles the remaining amount. However, some policies have a 'No Copay' option too. It's essential to review the policy terms and conditions provided by the insurance company to determine if a copay is applicable.
- Modern Treatment
Jayanth needed cardiac surgery, and the doctors advised him to a robotic surgery. Since IRDAI has mandated all health insurance to cover modern treatments in their policy, he assumed that this would be completely covered under his group health insurance policy. However, he later discovered that his policy only covered 50% of the sum insured for such treatments. Consequently, he had to cover the remaining amount for the surgery.
- Sum insured < Claim amount
Akash utilized 3 lakhs from his 4 lakh company-provided sum insured for himself and his family in a single year. His recent hospital stay cost him 1,50,000. He filed a claim for the entire amount without realizing he had reached the limit. As a result, he received only the remaining sum insured, and he had to cover the remaining expenses.
This teaches us to always monitor our sum insured during multiple hospitalizations or if our claim exceeds the sum insured to avoid unexpected financial burdens.
- R&C Clause - Reasonable and Customary Charges
Rahul, aged 55 years old, undergoes a heart surgery. His hospital bills him 6 lakhs. He files a claim with his group health insurance company. But when the insurer checks the bills, they discover that the hospital has overcharged, and the reasonable and acceptable cost for the surgery in that locality is only 4 lakhs. Consequently, the insurer covers only 4 lakh, leaving Rahul responsible for the remaining amount.
Insurance companies have a 'Reasonable and Customary Clause' in their policies to protect themselves from having to pay unreasonable and excessive hospital bills. It's the amount of money your health insurance company thinks is fair for a specific medical service or procedure.
As a policyholder, you expect financial security as you constantly pay your group health insurance premiums. However, certain aspects of claims may occasionally not be covered for various reasons outlined above. It's vital to keep these considerations in mind to avoid unforeseen financial strains and ensure you receive the coverage you're entitled to.