Health Insurance: In today's times, illness can strike at any moment. Driven by this fear, people pay premiums amounting to lakhs of rupees to purchase health insurance, ensuring their pockets aren't emptied during a crisis. But are you aware that many major private insurance companies in the country are not paying out the full claim amount? Statistics reveal that, in many instances, patients receive less than 80% of their total medical expenses. Let's understand the methods insurance companies employ to deduct amounts from claims.

Case Studies: When Courts Taught Companies a Lesson

• Bengaluru: A woman filed a claim for breast cancer treatment, which the insurance company rejected under the pretext of a 'pre-existing heart condition.' The court deemed this a 'deficiency in service' and ordered the company to pay ₹5 lakh.


• Chandigarh: Against a hospital bill of ₹2.25 lakh, the insurance company paid a mere ₹69,958. Following the intervention of the Consumer Commission, the company was compelled to pay the full amount, including interest.


• Noida: Here too, a claim was rejected on technical grounds; however, the District Consumer Commission subsequently ruled the rejection invalid and directed the company to pay compensation.

Where Do Insurance Companies Deduct Your Money?

• Non-Medical Expenses (The Non-Medical Trap): According to experts from the IRDAI, hospital bills often include charges for items such as surgical blades, cotton, gowns, gloves, and even hand-washing soap and tissue paper. Insurance companies do not consider these items to be an "integral part of the medical treatment" and, consequently, deduct these costs from the final bill settlement.


• Room Rent Limits and Proportionate Deductions: If your insurance policy stipulates a room rent limit of ₹5,000, but you opt for a room costing ₹8,000, the insurance company will not merely deduct the excess room rent; it will also apply a proportionate deduction to other costs, such as doctors' fees and surgical expenses. Pre-existing Conditions and Allegations of Non-disclosure: Companies often withhold claims by citing ‘pre-existing diseases,’ even if the condition in question has no bearing on the current medical treatment.


• The Co-pay Clause: Nowadays, many insurance policies include a ‘co-pay’ stipulation. This implies that regardless of the total bill amount, the patient is required to personally bear a fixed portion of it (such as 10% or 20%).