Health Insurance Claims Speed Up, But Average Amount Declines, Report Reveals

New Delhi: The health insurance sector is witnessing significant changes. According to the annual report of the Insurance Regulatory and Development Authority of India (IRDAI), the speed at which claims are being settled has increased, and the number of rejected claims has reduced. However, the average payout per claim has slightly decreased.

What Do the Numbers Say?
In FY 2024-25, health insurance companies settled a record number of claims. Around 87% of the total claims (3.26 crore claims) made during the year were processed, up from 83% the previous year (2023-24). The rejection rate has also dropped from 11% to 8%, and pending claims have reduced from 6% to about 5% by the end of March.

Decline in Average Payout
In terms of money, the total claims paid out by companies amounted to ₹94,248 crore, a significant increase from ₹83,493 crore the previous year. However, the average payout per claim dropped from ₹31,086 to ₹28,910. The dominance of cashless settlements continues, with 66.35% of the total claim amount paid via cashless methods, which is nearly the same as last year (66.17%).

The share of reimbursement claims has decreased from 31.35% to 29.34%. Around 3% of the claims used both cashless and reimbursement methods.

Reasons for Improvement
This improvement in the claim settlement process is attributed to the stricter regulations imposed by the IRDAI. According to the new rules, pre-authorization for hospital admissions must be granted within one hour, and final approval for discharge must be given within three hours. If there is any delay, insurance companies will have to compensate the loss from their shareholder funds. Furthermore, before rejecting any claim, insurance companies are now required to pass it through a review committee.