Health Insurance Claim: When it comes to health insurance, most companies strive for a high claim-payment ratio. However, there are situations where your health insurance claim might get denied, and that’s something no policyholder wants to face. Dealing with a rejected claim during a hospitalization can be incredibly stressful. In this article, we’ll tell the top reasons why health insurance claims can be denied and provide you with essential tips to prevent such denials. So, let’s explore the key factors behind claim rejections and what you, as a policyholder, can do to avoid them.
Below are common reasons why many health insurance claims end up being rejected. We’ve also included advice on what steps you can take to prevent these rejections.
1) Providing Inaccurate Information
When you’re applying for health insurance, it’s crucial to be completely honest and accurate on the application form. Don’t provide any false information, whether on purpose or by mistake, as it can result in your claim being denied later. The information you provide, such as your age, income, existing insurance policies, job (especially if it’s risky), and hobbies (especially if they’re adventurous), is essential for the insurance company to determine whether they will accept your application and how much you’ll need to pay for your premium.
It’s best to fill out the application form yourself rather than having someone else, like an agent, do it for you. That way, you can ensure that all the information is correct and complete.
2) Full Disclosure of Pre-Existing Conditions and Habits
Not telling the truth about your existing health conditions, family’s health history, inactive lifestyle, and habits like smoking or drinking when applying for health insurance can result in your claims being denied. Some people hide this information to avoid paying higher premiums or getting rejected for coverage.
When completing your health insurance application, it’s crucial to be truthful about any preexisting health conditions you may have. Additionally, if there are specific illnesses that run in your family, be sure to include them in the family history or medical history section of the application.
If you are a smoker, you should be prepared to inform the insurance company about your daily cigarette consumption. Likewise, if you consume alcohol, it’s important to disclose the quantity you drink and how frequently you do so.
All of this information helps the insurance company determine the right price for your coverage. In some cases, they might exclude coverage for specific pre-existing conditions or impose waiting periods. Being truthful ensures you’re properly covered when you need it.
3) Making Claims During Waiting Periods
Most health insurance plans have waiting periods before you can make certain types of claims. Here are some common waiting periods you should know:
- 30-day waiting period: When you get a new policy, there’s usually a 30-day waiting period where you can’t make any claims, except for accidents.
- Maternity waiting period: If your policy covers maternity, you might need to wait for 24 to 36 months before using it, and it might only cover up to 2 pregnancies.
- Waiting period for specific diseases/procedures: Treatment for certain diseases or procedures can only be claimed after a 24-month waiting period from when your policy starts. These might include conditions like cataracts, varicose veins, piles, or sinusitis. You can find the complete list in your policy document.
- Waiting period for pre-existing diseases: If you have pre-existing conditions, you might need to wait for 24 to 48 months from the start of your coverage before making a claim for their treatment.
- Critical illness waiting period: If you’re dealing with a critical illness, you might have to wait for 90 days from when your policy starts before making a claim.
It’s important to read your policy details to understand these waiting periods fully, so you know when and how you can make a claim without facing rejection.
4) Opting for Non-Network Hospitals for Cashless Claims
If you’re planning to make a cashless claim for your hospital stay, it’s essential to choose a hospital that’s part of your insurance company’s network. Before you get admitted, make sure to confirm with the hospital whether they are in the insurance company’s network.
If you receive treatment at a hospital that’s not part of the network, your cashless claim will be rejected. In such cases, you’ll need to pay for the hospitalization expenses from your own pocket. Afterward, you can file a reimbursement claim with your health insurance company to get your expenses covered.
5) Claiming Services Not Covered
Some health insurance plans do not cover certain services, or they might have limitations and conditions for coverage. If you try to claim expenses for services that aren’t covered, your health insurance claim will be denied. These services may include:
- Dental treatment
- AYUSH treatment (alternative medicine like Ayurveda, Yoga, Unani, Siddha, and Homeopathy)
- Outpatient department (OPD) services
- Maternity-related expenses
To avoid claim rejection, review your policy document to see if these services are covered. If they are, also check the extent of coverage and any associated terms and conditions.
6) Policy Exclusions
Certain medical treatments or procedures are typically excluded by most insurance companies, which means they won’t be covered by your health insurance plan. Some of these common exclusions include:
- Cosmetic or plastic surgery
- Gender change treatments
- Injuries or treatments related to hazardous or adventure sports like rock climbing, motor racing, horse racing, scuba diving, and gliding
- Treatment resulting from illegal activities or criminal intent
- Treatment for alcoholism, drug abuse, or other addictive conditions
- Expenses related to sterility and fertility treatments
These are general exclusions found in many health insurance policies. For exclusions specific to your policy, refer to the policy’s exclusion section in the policy wording document.
7) Lapsed Policy
A health insurance policy is like a membership that lasts for a certain period, usually a year or more, as long as you pay the fee called a premium. When that time is up, you need to renew or continue your membership by paying the fee again.
If you forget to pay on time, your membership will expire, and you won’t be able to use it anymore. If you try to use it when it’s expired, the insurance company will say no. So, make sure to check when your membership expires and pay the fee before that date. It’s a good idea to set up an automatic payment so you don’t forget.
8) Claim Amount Exceeds Sum Insured
Every health insurance policy comes with a limit on how much money it will pay for your medical bills. What if your bills are more than that limit (if you’ve already used some of it earlier in the same year)? The insurance company will only pay up to that limit, according to the policy rules.
Because the cost of medical care goes up every year, it’s a good idea to check if your limit is enough every few years. If not, you can buy or increase your limit to make sure you’re covered for the higher costs.
9) Failure to Notify the Insurance Company Promptly
If you find yourself hospitalized and wish for your insurance to handle the expenses, it’s important to inform your insurance company within a specified timeframe. For planned hospital visits, you might require prior approval from the insurance company before admission. In cases of emergencies, such as accidents, it’s crucial to notify them within 24 to 48 hours after your hospitalization, in accordance with your policy’s guidelines. Failing to do so could result in your medical bills not being covered.
Ensuring Claim Approval
We’ve covered the main reasons why health insurance claim can be rejected and how you can prevent that. To improve your chances of getting your claims approved:
- Fill out the insurance application form yourself and provide accurate information.
- Read your policy document carefully, including details about waiting periods, network hospitals, and exclusions.
- Pay your renewal premiums on time to keep your policy active.
- If you’re hospitalized, inform the insurance company within 24 hours.
By following these steps, you can increase the likelihood of your health insurance claim being accepted.