Thousands of health insurance policyholders in India are facing unexpected financial strain as a little-known provision—Reasonable and Customary Charges (R&C)—is increasingly being used by insurers to scale back claim reimbursements. Frustrated patients say the clause, often buried deep in policy documents, has turned their promise of “comprehensive coverage” into a costly illusion.
A Costly Discovery After the Hospital Stay
When a Delhi resident underwent knee replacement surgery at a premium hospital this year, he assumed his ₹3.8 lakh bill would be fully covered under his health insurance. Instead, he was reimbursed only ₹2.75 lakh. The insurer cited the R&C clause, claiming the procedure’s cost exceeded what was “reasonable” for the Delhi NCR region.
In Indore, a retired teacher faced a similar shock. After cataract surgery costing ₹70,000, she was reimbursed just ₹40,000. The explanation? Her chosen hospital charged more than the internal benchmarks set by the insurer.
No Leeway for Emergencies Either
The clause has even been applied in life-threatening situations. In emergency ICU admissions at non-network hospitals—often the only viable option—patients find themselves reimbursed at arbitrary, lower rates. One Mumbai resident was forced to pay ₹60,000 out-of-pocket after an emergency angioplasty when the insurer deemed the procedure “overpriced.”
“I didn’t have time to compare hospitals—I went to the one nearest to me,” the patient said. “It feels like I’m being punished for acting quickly in an emergency.”
Insurers Justify, Experts Warn
Insurers argue that the R&C clause is necessary to prevent inflated billing and misuse of the insurance pool. They recommend policyholders stick to network hospitals and seek pre-approvals for elective procedures.
“The clause exists to ensure that claims are paid fairly and sustainably,” said a senior official at a major private insurer. “But we do acknowledge that more transparency is needed.”
Policy experts, however, question the fairness of the practice. “Most people aren’t told about these hidden benchmarks, nor are they available publicly,” said Dr. Ananya Mehra, a health insurance researcher. “The unpredictability in how this clause is enforced makes it less about fairness and more about cost-cutting.”
Growing Demand for Reform
As the number of complaints rises, calls are mounting for the Insurance Regulatory and Development Authority of India (IRDAI) to intervene. Experts and consumer advocates are urging the regulator to mandate:
- Public disclosure of benchmark treatment rates
- Standardization of R&C application across insurers
- Protections for policyholders seeking emergency care
- Clear upfront communication about such clauses
For now, many policyholders are learning the hard way that understanding the fine print in their insurance policy isn’t just advisable—it’s essential.
“Health insurance should be a safety net,” said a patient rights advocate. “But right now, too many people are slipping through the gaps.”
