Claim settlement: The moment of truth in health insurance

Abstract

A customer centric claim settlement system goes a long way in mitigating the anxiety of patients. At the time of buying Health Insurance, a customer is assured that the Health Insurance Company (HIC) will take care of the medical expenses, in case of his hospitalization. But when such an eventuality happens, many times HICs go back on their words based on procedural non-compliance or because of some conditions written in fine prints. Therefore, how HICs respond to the financial needs of the patients during the claim settlement is the real Moment of Truth. Failure on the part of the HICs in honoring their commitment leads to high Out of Pocket (OOP) Expenses and acute financial hardship to the patients. This article is important primarily because a customer always has an apprehension about the claim settlement. Hurdles one faces during claim settlement is a big contributor to the low customer satisfaction (LCS) which in turn contributes to poor Health Insurance penetration. On the other hand, false, ineligible and inflated claims adversely affect the business model of HICs. The article also highlights why the Incurred Claim Ratio (ICR) in Health Insurance is very high in India and why this has become a roadblock towards expansion of Health Insurance Market (HIM).