India’s endeavour to protect every citizen with appropriate health insurance policy, along with life and property insurances by 1947, may be under threat due to growing distrust between the policy holders and the insurers. According to the latest data released by IRDAI, private health insurers on average have rejected claims worth INR 22 for every INR 100 in 2024, making a mockery of the idea to allow private players in the insurance sector to make it inclusive and competitive. It is saddening to note that while the demand for insurances have grown by 18 per cent, claim rejection rate by the private insurers have risen to 19 per cent in previous fiscal. Further worrying is the fact that insurance companies have rejected the claims of aged policy holders more than the younger ones on slightest pretext like pre-existing diseases or non-disclosure of diseases excluded under the policy. While the policy holders allege that they are never told about the terms and conditions of the policy, the insurance providers deny the allegation by saying that it is the duty of every customer to read all the policy-related documents carefully before purchasing it.
Here lies the actual problem as the policyholders often find it difficult to understand the real meaning of the jargonized policy documents, which results in rampant mis-selling of products. Many times, it has been found that the insurance providers have sold unsuitable policies to their clients. This has put a huge burden on the clients as they are finding it difficult to meet healthcare expenses that are continuing to rise for the last couple of years. Moreover, it has been roughly estimated that due to the non-cooperation of the insurers, people have to meet 40 per cent of the healthcare expenses from their pockets. As a result, people always find themselves in a difficult situation in case of a medical emergency and face a deep financial crisis. Clearly, it is time for the government to rethink its policy about the entry of private parties in the insurance sector and asking for strict adherence of government guidelines to continue their business activities in the country as these companies are more after profits than ensuring the well-being of the people.
If this trend continues, it will be difficult for the government to provide healthcare insurance to all Indians as promised. This is why the government cannot sit idle and allow the private insurance firms to make hefty profits. In such a scenario, the entire purpose of allowing private players in the insurance sector in the country will be badly defeated and the aim of achieving high insurance penetration will remain elusive. As India is a welfare nation, it can’t allow such a situation to dominate the health insurance sector. The government may adopt a two-pronged strategy to deal with the situation. It may either go all out to bring all the citizens under the cover of government health insurance companies, or ask for complete transparency in the functioning of the private insurance companies, especially regarding claim rejections.