The Indian government clarifies that health insurers will retain the authority to decide claim outcomes, amidst concerns over rejection rates and data transparency, as industry and regulators aim for clearer explanations and improved settlement ratios.
India’s health insurers will retain the final say on whether claims are paid, after the government told the Lok Sabha on July 24 that a treating doctor’s view cannot be made binding on claim decisions. The clarification confirms that insurers weigh several elements when assessing a claim, including clinical records, the attending doctor’s assessment, accepted medical standards, standard treatment protocols and the policy wording itself.
That position matters in a market where claim outcomes are often contested. According to data cited by Business Standard and the Economic Times, health insurers disallowed claims worth ₹15,100 crore in the financial year 2023-24, equal to 12.9% of all claims filed. Of the ₹1.17 lakh crore submitted, ₹83,493.17 crore was paid, while insurers processed 3.26 crore claims in total.
The government’s response also drew attention to a data gap at the Insurance Regulatory and Development Authority of India. IRDAI tracks overall repudiation figures, but it does not publish insurer-by-insurer breakdowns explaining why individual claims are rejected, such as exclusions or a finding that treatment was not medically necessary. That has limited visibility into the precise grounds on which claims are turned down, even as the regulator has moved to require clearer explanations from insurers when they reject claims.
IRDAI’s latest annual report shows the sector settled 87% of health claims in 2024-25, with 8% repudiated and 5% still pending at the end of the year. The report said insurers paid ₹94,248 crore across 3.26 crore claims, with about 58% settled cashless and 41% through reimbursement. Industry figures also show the broader insurance market paid out 70% of total premium received as claims in fiscal 2025, up from 68% a year earlier, pointing to a modest improvement in settlement ratios.
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