Claim rejections and delayed discharges remain among the main worries for people who hold health insurance in India, even though the regulator has set strict timelines for insurers to follow. Health insurance claims are now governed by master circulars issued by the Insurance Regulatory and Development Authority of India, or IRDAI, in 2024, which set limits on how long an insurer can take to decide a cashless request or settle a claim. The rules were written to stop patients waiting hours in hospital for billing clearances, yet complaints about rejections and delays continue to reach the regulator.
Health insurance claims and the one-hour rule
Under the IRDAI circulars, an insurer or third-party administrator must decide on a cashless request within one hour of receiving it from the hospital. Final discharge authorisation must follow within three hours of the hospital submitting the discharge summary and itemised bill. If the insurer takes longer than three hours, it must bear any extra room rent, bed charges or hospital penalties caused by the delay, from its shareholders’ funds. Hospitals are also barred from detaining patients or delaying the release of mortal remains over unpaid bills. The one-hour and three-hour limits are the sharpest part of the rules on health insurance claims.
The rules also cover reimbursement claims, where the patient pays first and claims the money back. An insurer must decide on a reimbursement claim within 30 days of receiving the last document it needs, and the period can extend to 45 days if the claim needs investigation. If payment runs past the deadline, the insurer must pay interest at 2 percent above the prevailing bank rate. No claim can be rejected or closed because documents arrived late or because the patient informed the insurer late, the circulars say. The interest rule is meant to give insurers a reason to settle health insurance claims on time.
Why health insurance claims are rejected
Most rejections and deductions trace back to a small set of causes. These include medical history that was not disclosed when the policy was bought, treatment claimed inside a waiting period, exclusions written into the policy, room rent limits and sub-limits, and treatment that the insurer says did not need hospitalisation. Insurers also cite non-compliance with policy terms, exhaustion of the sum insured and hospital stays that did not meet minimum-duration requirements. Every rejection must cite the specific policy terms it relies on, and no claim can be turned down without the approval of the insurer’s Product Management Committee or a three-member Claims Review Committee. The committee rule is meant to stop health insurance claims being turned down by a single desk.
A cashless refusal does not by itself end the cover. The National Consumer Disputes Redressal Commission has held, in National Insurance Co. Ltd. v. Nitin Khandelwal, that an insurer cannot reject a later reimbursement claim only because cashless authorisation was withheld. The patient can pay under protest, keep the documents and claim reimbursement, with the insurer required to judge that claim on its own merits. The ruling matters because health insurance claims often start with a cashless request at the hospital.
Health insurance claims complaints keep rising
The scale of the problem shows in grievance figures. Health insurance grievances rose by about 41 percent to 1,37,361 in the financial year 2025, largely driven by claim rejection, delays and partial settlements. In the financial year 2026, health insurers received 1,17,979 complaints and disposed of 1,12,315, leaving 5,664 pending. Health insurance alone accounted for nearly 57 percent of all pending cases on the regulator’s Bima Bharosa portal, the highest share of any segment. Health insurance premiums in India have crossed Rs 1.2 lakh crore, so the number of claims passing through the system keeps growing. The figures suggest health insurance claims will stay a source of friction as the market grows.
Policyholders who are unhappy with a decision have a set path to follow. The first step is the insurer’s grievance team, which has 14 days to respond. The next step is the IRDAI’s Bima Bharosa portal, and after that the Insurance Ombudsman, which hears claims free of charge for amounts up to Rs 50 lakh. The rules give policyholders clear rights on paper, and the test for health insurance claims in India is whether those rights hold when a family is standing at a hospital billing desk.