Health insurance policyholders suffer premium hikes, claim delays and rejections

Hyderabad: Paying through the nose for hefty health-insurance premiums but left high and dry when it was time for the insurer to pay up? Or did your claim go through, but you still waited hours to get discharged because insurer approval was pending? Did you struggle to get reimbursement cleared, or find that modern treatments like robotic surgery required extra out-of-pocket payment?If this reflected your experience over the past three years—marked by steep premium hikes and frustrating claims processing—you were not alone. A Local Circles survey, conducted after the platform received over 1,000 complaints in the last 12 months, found that four out of 10 health-insurance policyholders faced full or partial claim rejection without any valid reason being provided.The survey, shared with TOI, covered 54,000 consumers across 323 districts. It reported that five out of 10 policyholders who filed claims between 2023 and 2025 waited between six and 48 hours for discharge because their cashless claims were pending insurer approval. More than seven out of 10 respondents said premiums rose cumulatively by 50% to 200% over the past three years.Local Circles said IRDAI data reflected similar concerns, especially for senior citizens, indicating that claim processing and settlement performance in 2024-26 left much to be desired. In FY2023–24, insurers recorded over 3 crore health-insurance claims worth about Rs 1.2 lakh crore. Of these, around 2.7 crore claims worth Rs 83,493 crore were settled—about 82% by number but only 71.3% by value—suggesting many claims were partially settled or not paid in full.Claims disallowed totalled about Rs 15,100 crore, while claims worth Rs 10,937 crore were rejected. The average claim size was about Rs 31,086. A little over 66% of claims were processed cashless, indicating some improvement, but not enough to address consumer frustration.Local Circles said settlement practices remained a major pain point, with health-insurance complaints rising 41% to 1,37,361 in FY2025, driven largely by claim rejections, delays and partial settlements. It added that more than half the grievances handled by insurance ombudsmen related to health-insurance claims, highlighting persistent dissatisfaction."Many health policy holders believe they are getting much less for more. They feel that they paid significantly higher premiums in the last 3 years, co-pays were introduced in many policies and now they also have to pay extra separately for modern treatments, whereas in markets like US procedures like robotic surgery, if available, are covered without a separate charge," said Sachin Taparia, founder of LocalCircles.He said claims processing remained slow, with exclusions and delays pushing policyholders to accept lower payouts after long waits, even as premiums continued to rise, drawing regulatory scrutiny. In FY2024-25, total health-insurance premiums increased about 9.19% to Rs 1.27 lakh crore, according to IRDAI, which attributed the trend to medical inflation and higher claim costs.The regulator initiated measures to improve predictability, fairness and transparency in premium revisions with one key intervention focused on senior citizens. In early 2025, IRDAI issued a circular stating insurers cannot increase premiums for senior-citizen health-insurance policies by more than 10% in a single policy year without prior regulatory approval. The cap aimed to address sharp and unpredictable hikes for seniors, which in some cases exceeded 30% to 40%, making coverage unaffordable.Insurers now also have to consult IRDAI before withdrawing senior-specific products to ensure continuity of coverage. The framework was intended to curb volatility, promote actuarially sound pricing and prevent abrupt repricing of existing products.For other age groups, though there is no fixed annual cap, insurers remain subject to actuarial standards and regulatory oversight. IRDAI has reiterated that premium increases must be actuarially justified and based on credible claims experience, and insurers must clearly communicate reasons for any hike at renewal.It also said fresh underwriting cannot be undertaken at renewal solely to penalise policyholders with prior claims, and fundamental policy terms cannot be unilaterally altered during renewal cycles. The regulator also encouraged insurers to contain healthcare costs, including negotiating standardised treatment package rates with hospitals, which could help moderate future premium increases.