Health Insurance In India: Understand What Constitutes As Fraud

With the gradual rise in the awareness about health insurance in India, the number of people buying health insurance plans is increasing. While this is a very welcoming move, the only downside that the health insurance industry has faced is the rise in the number of health insurance frauds.

It is understandable that many times the frauds are not committed intentionally, but they affect both, the policyholders as well as the insurance companies. By reading further, we hope that you get more clarity on what constitutes a fraud and steer clear of making these errors.

Types of health insurance frauds

• Claim Fraud : This is the most common health insurance fraud that is committed. Any illegal claim that leads to getting an undue financial gain to the policyholder is an insurance claim fraud. Following are some of the scenarios that are considered to be health insurance claim frauds:
  • Submission of fraud/duplicate medical bills
  • Overstating the expenses incurred for health care services
  • False accidental injury claim
  • Filing a claim for a treatment which has not been received
  • Forging the medical documents (like changing the name, date etc.)
• Application fraud : A person has to fill out a proposal form of the insurance company from whom he/she intends to buy a health insurance policy. The details requested in this proposal form are the personal details of the people who are to be covered under the policy, details about any pre-existing medical conditions and information about other health insurance policies (if any).
  Now there is a possibility that while filling out this proposal form you may miss out on details of any pre-existing disease or mistakenly enter an incorrect date of birth. While these errors may seem minor initially, but they will be considered an application fraud. Non-disclosure of pre-existing illnesses or providing inaccurate details about the members covered under the policy are some scenarios that come under application fraud cases.
• Eligibility fraud : Many times, people file a health insurance claim, without knowing if the said illness is covered under the policy or submitting a claim for a person (relative or dependent) who is not covered under the policy. All such cases fall under eligibility fraud.

The frauds committed by policyholders might be unintentional, but they can certainly lead to very unpleasant situations, including denial of claim or even worse, denial of coverage in the future.

Consequences of committing health insurance frauds

Health insurance companies implement stern actions against those who either willfully or unknowingly try to commit fraud. In India, the consequences of being charged with health insurance fraud are:

• Your health insurance policy might get cancelled if the fraud is very severe.
• Your claim can get rejected if you are found guilty of committing the fraud.
• You might end up paying all the expenses of the medical treatment yourself.
• You might lose the opportunity of getting quality health care services in the network hospitals.
• You might also face issues while renewing your existing policy.

Many people believe that insurance companies will never pay the full amount of the claim and thus, they quote a higher claim, which many times result in frauds. Also, there are many people who are not aware of the features and coverages of their health insurance policies and thus either end up committing fraud or paying huge sums of money from out of their pocket for the treatment received.

It is very essential that you read your policy document carefully and get your queries clarified before the commencement of the policy period. In fact, In India, health insurance policies also come with a free look period of 15 days. You can check out the usefulness and relevancy of the health insurance policy in these 15 days and choose to either continue or discontinue with the same.

In today’s uncertain world, where the chances of falling ill are very high, it is better to have financial security in times of distress. The rising medical costs have led to the gradual increase in the penetration of health insurance in India, however, the road to successful and sustainable usage of health insurance policies is still bumpy.

We hope that this write-up clears airs about different types of health insurance frauds and that you never are faced with an awkward situation as a result of unknowingly committing a fraud.