Expansion of health insurance coverage is a vital step in India’s effort to achieve Universal Health Coverage. With the increasing cost of quality healthcare, higher life expectancy, and epidemiological transition towards non-communicable diseases, health coverage has become imperative.

The average policyholder experiences friction when getting a health insurance claim process. Common challenges faced include lack of clarity about the claim process, delays in settlement, and the partial amount being reimbursed.

We understand the health insurance market in India and the challenges faced by stakeholders during the claims process below.

As per a PGA Labs study, in FY20 the penetration of health insurance in India was 3% via retail, 7% via group health schemes, and 26% via Govt schemes. In FY25, this penetration is expected to increase to 7% via retail, 9% via group health schemes, and ~28% /via Govt schemes, on the lines of the experience of countries like Mexico and Germany.'

TPAs (Third Party Administrators) form a vital link between the insurers, hospitals, and patients/ policyholders. They handle the entire patient documentation and play a key role in smooth claim processing and settlement. The last few years have seen the emergence of several new-age players looking to digitize certain processes in the patient journey for hospitals and insurers thus facilitating smooth claims settlement process.

Each stakeholder in the value chain is plagued with challenges, all of which ultimately hurts the customer. Hospitals complain of issues at the start of the treatment as well as post-discharge, primarily due to high TAT from insurers for relevant approvals. Most of the TPAs have low technology enablement and limited offerings which significantly dilute their proposition to hospitals and insurers. This leads to a resource crunch, limited technical skillset, and slow document processing by insurers. All this results in a lack of process visibility for the customer resulting in delayed/ partial claim settlement.

New age insurtech players are using algorithms to arrive at mutually acceptable procedure pricing between insurers and hospitals. This leads to faster approval from insurers and minimization of disallowances. Additionally, they are helping check insurance eligibility, filing pre-approvals, getting final approvals, and eliminating fraudulent claims by digitizing the claims process. All in all, this results in a superior claims settlement experience for the customer and provides a seamless process for all stakeholders. Measures like these will only help drive further health insurance penetration in the country.