Archive · 16 Aug 2026
Six Common Reasons Health Insurers Deduct Money From Claims
Health insurance is like a promise that someone else will pay your hospital bills when you are sick.
But sometimes the insurance company pays less than the full bill.
It can take money off for several reasons.
For example, it may say some charges were higher than normal and it will only pay the usual price.
It may also say you were in the hospital without getting active treatment.
Treatments that are still experimental may not be covered either.
Small items like gloves, bandages and syringes might not be included in coverage.
If the hospital paperwork is unclear, the insurance company may say it cannot work out how much to pay.
That is why it is important to read the letter you get from the insurance company and ask questions.
If you think a deduction is unfair, you can complain to an ombudsman or a consumer court.
Insurers deduct amounts above 'reasonable and customary' charge benchmarks, most often in reimbursement claims and at non-network hospitals.
MoU discounts negotiated between hospitals and insurers should not be passed to policyholders if the settlement letter says they cannot be recovered.
Claims may be reduced when hospitalisation lacked active treatment or when treatment is classified as experimental or investigational.
Consumables such as gloves, syringes and IV sets may be excluded unless the policy or an add-on explicitly covers them.
Insurers may state 'liability could not be ascertained' when medical documentation is insufficient, prompting policyholders to resubmit documents.
- Who
- Health insurance policyholders in India, insurers, and the Insurance Regulatory and Development Authority of India (IRDAI).
- What
- A guide to common reasons insurers deduct money from health insurance claim settlements, including unreasonable charges, MoU discounts, lack of active treatment, experimental treatments, consumables, and unascertained liability.
- When
- Not specified in the article.
- Where
- India, with particular focus on non-network hospitals and hospital billing across the country.
- Why
- Insurers restrict payouts to amounts they consider reasonable and medically necessary under each policy; the article aims to help policyholders understand and question claim deductions.
- Topic
- Health insurance claim settlement deductions
- Number of reasons listed
- Six common reasons (plus room category deductions)
- Regulator
- Insurance Regulatory and Development Authority of India (IRDAI)
- Common deductions
- Reasonable and customary charges, MoU discounts, no active line of treatment, experimental treatment, consumables, unascertained liability
- Consumables examples
- Gloves, syringes, gauze, surgical tape, IV sets
- Consumer recourse
- Insurance Ombudsman or consumer court
- Recommended action
- Ask insurers for itemised bills, written charge explanations, and the benchmark used for R&C deductions