Many people who have health insurance and choose to get reimbursed by their insurance companies for their medical expenses often find themselves having to borrow money or use their long-term savings to pay for their medical bills. This is because they don’t have enough money readily available to cover these costs.
A survey conducted by PolicyBazaar found that 68% of people who used reimbursement for their medical claims didn’t have enough savings to pay for their medical bills. Borrowing money became more common for treatments that cost over Rs 1 lakh, especially in smaller towns where financial resources are limited.
The survey also emphasized the importance of increasing the number of cashless claims in line with recent initiatives by the Insurance Regulatory and Development Authority of India (Irdai). It revealed that about 70% of respondents said they would have needed financial assistance or had to use their investments if cashless claims were not available.
The insights from the survey were gathered through face-to-face interviews with 2,128 insurance claimants. The aim was to assess their satisfaction with the claims process.
Although policyholders prefer cashless treatment, there are still issues with accessing their preferred healthcare providers. Even with expanded insurance coverage, approximately 47% of health expenditures in India still require out-of-pocket payments, which is much higher than the global average of 18%.
The survey also highlighted that cashless claimants expressed higher levels of satisfaction compared to reimbursement claimants. 89% of cashless claimants were satisfied, while only 79% of reimbursement claimants felt the same. Dissatisfaction was notably higher among reimbursement users, with 12% expressing dissatisfaction, compared to just 4% among cashless claim users.
In the cashless category, the average wait time for approval after being discharged from the hospital was 3.8 hours. However, 6% of claimants were dissatisfied because their approvals took longer than 8.5 hours. New health insurance guidelines now require insurers to approve cashless treatment applications within one hour and settle discharge claims within three hours. Delays after discharge often occurred because insurers requested additional information, which complicated the process for caregivers.
Of all the claimants surveyed, 94% had their claims approved, and there was a higher approval rate of 97% for those who purchased their insurance policies online. Overall, 86% of claimants expressed satisfaction. Among the 6% of claims that were rejected, half were due to undisclosed pre-existing conditions, which often happened because people were not aware of these conditions. The integration of online platforms has helped reduce the rejection rate from 6% to 2.5%.
The study also found that the average claim size was highest in South India, exceeding Rs 2 lakh, which is higher than the metro average of Rs 1.6 lakh. Among different age groups, the 56-65 age bracket had the highest average claim size of Rs 2.1 lakh, while the 18-35 age group had an average claim size of Rs 1.3 lakh.