One of the worst suspicions of insurance buyers has been confirmed. Hard data presented to the court following a petition filed by an activist reveals that claim payouts are far higher for cashless health covers than the conventional reimbursement facility - where a patient's family has to fork out cash before recovering the money from insurer.
Indeed, the average cashless claim disbursal is nearly double that of reimbursement claim payouts in case of several ailments, according to numbers disclosed by the insurance watchdog Irdai to the Bombay High Court. For instance, the average claim payout during 2013-14 for diseases of the circulatory system (including cardiac ailments) was Rs 81,384 through the cashless facility, but was just Rs 38,048 under the reimbursement mode. Likewise, for diseases involving blood and blood-forming organs and immune disorders, the average claim paid out through the cashless mode was Rs 35,958 while that through the reimbursement route was just Rs 17,726.
Activists believe that reimbursement claims get partially settled as individual policyholders do not have the bargaining power at that stage, while hospitals can get claims fully settled due to their relationship with insurers. "The general perception amongst policyholders has always been that insurers tend to pay out a relatively lower amount in case of reimbursement claims. Now, there is data to back this view," said consumer activist Gaurang Damani who in 2012 had filed a petition before the High Court, following which, the Irdai framed health insurance regulations in 2013.
The disclosure on reimbursement and cashless claims is an outcome of the ongoing court proceedings concerning the same case. It was found that out of the 22 diseases, reimbursement amount is lower in all cases except mental disorder. Insurers, however, insist that this does not qualify as an apple-to-apple comparison. "Even within the same ailment categories, the variations could be due to several reasons. Unless the classification is done on the basis of treatment procedures, you cannot come to a conclusion that insurers discriminate between cashless and reimbursement modes," said a senior executive of a leading general insurance company who did not wish to be named.
Policyholders also tend to opt for 'cashless' where expenses are higher and use the reimbursement route in case of lowticket expenses, say insurers.