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How To Understand Refused Health Insurance Claims



One of the biggest bones of contention between health insurance companies and customers is over understanding of the terms of policies surrounding acute and chronic conditions.  This is one of the main sources of complaints to the Financial Ombudsman.

Generally, private medical insurance policies cover acute conditions, but not chronic conditions.  It is useful to check these definitions out at the point of signing up.  Sometimes, health insurance providers refuse to pay out for treatment arguing that the customer’s condition is chronic and thus falls under the exclusion clauses.  A customer may, however, believe their condition to be acute.

Understanding Medical Terms

We often use the words ‘acute’ and ‘chronic’ interchangeably when we talk about symptoms or elements of an illness, but in medical and insurance contexts, their meanings are very specific, albeit medical professionals may not always use the terms appropriately, which leads to confusion and problems when making an insurance claim.

If intending to undergo medical treatment, policy holders should check with their insurance company first to see how they define their particular condition.  Definitions of the terms will vary across health insurance policies.  According to the Ombudsman, the terms generally are understood in private health insurance plans as follows: 

·         acute conditions will arise suddenly and unexpectedly; they may be curable

·         chronic conditions are on-going; treatment and intervention will merely relieve your symptoms; the underlying condition may persist intermittently

Getting A Definitive Decision on Insurance Claim Disputes

The Ombudsman will often determine the outcome to insurance claim disputes.  They review medical evidence from the doctor treating the patient.  Their statements are looked at on balance. 

They will also investigate if an insurance claimant’s condition is “an acute flare-up of a chronic condition – or an acute condition that has become chronic.” 

Acute Conditions

Payouts for acute conditions will not be withheld if the claimant’s Private Medical Insurance policy covers referrals by a GP for short term treatment by specialists for surgical and other interventions for acute illness or injury.

Health insurance companies are expected to pay for treatment if it is likely to “lead to a full recovery or restore the consumer to their previous state of health and activity”, according to the Ombudsman.

Even conditions that arise from a chronic illness could be free from exemption if they can either be completely cured or “substantially cured”.  

Chronic Conditions

Chronic’ for health insurance purposes means long-term conditions, where symptoms can merely be alleviated, but not cured. Such conditions are not generally covered by private medical insurance  policies, even when symptoms occur after you take out your policy. 

When deciding on disputes, the Ombudsman will want evidence that the insurance company or broker explained these terms fully to the consumer before they took out the policy.  A good provider will check their customer’s understanding of terms and conditions before signing up.  Failure of a provider to explain terms effectively can mean customers will win their disputed insurance claim. 

It is reassuring to know that the ‘burden of evidence’ of believing that a condition is chronic rather than acute will be on the insurance company.

Acute Episodes of Chronic Conditions

Sometimes the situation is blurred when acute ‘flare ups’ of chronic conditions happen.  If the condition is treatable with surgery and isn’t explicitly listed as an exclusion in your policy, this too may be paid for by private health insurance companies.

The Ombudsman will always look to see what is reasonable under the circumstances.  For instance, if your insurer has paid for treatment before when you were critically-ill, if you subsequently need further treatment, recommended by your GP to stabilise your  condition and continue to lead a more normal life, this may be seen favourably by the insurance industry overseer.  Turning a claim down has to have a ‘reasonable’ basis.  

What If Your Insurance Provider Argues Your Acute Condition Is Now Chronic?

Some illnesses, (e.g. cancer), can create differences of opinion on what is reasonable to exclude from an insurance policy.  A condition which is originally defined as acute may later be redefined as chronic.  This can be when interventions, treatments or operations have not been effective, or if your condition deteriorates.  Any further treatment may only relieve your symptoms rather than cure the problem, so may not be covered by your insurance provider.

This shift can sometimes seem unclear and it can seem like your insurance company do not expect you to recover, which can be upsetting.   Your own doctor may not even have reached such a severe diagnosis.  Insurance companies should always handle such decisions sensitively.

Termination of cover a short time before you undergo a major operation, or at the time of a claim are unlikely, but can happen.  Remaining in communication with your insurer throughout any progression of your condition, or after any recommended treatments is vital to protect yourself.

Your health insurance company or broker should inform you as soon as possible when they decide that your condition had become chronic and they do not intend to cover the costs of further treatment and explain their decision.  If you have any questions when making a claim, speak to your broker immediately.  This can save a lot of headache and heartache later.


Image by PhasinPhoto @ FreeStockImages.net



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