Health Insurers Lose ₹10K Crore Annually Due to Fraud, Abuse: Report

Mumbai: India’s health insurance system is losing around Rs 8,000–10,000 crore annually on claim-payout leakages arising from fraud, waste and abuse, according to a report by Boston Consulting Group (BCG) and Medi Assist Healthcare (country’s largest Third-party administrator (TPA)).

The findings, published in a new joint report titled “From Suspicion to Solution: A Strategic Approach to Health Insurance Fraud,” stresses how data gaps, weak controls, and misaligned incentives are driving systemic leakages across the sector.

The report states that fraudulent and unnecessary claims not only inflate premiums but also strain insurers’ margins and strain public resources. The study found that fraud tends to concentrate in mid-ticket claims ranging from Rs 50,000 to Rs 2.5 lakh, where incentives are significant but oversight remains moderate.

According to their analysis, around 90 per cent of claims pose no risk, 2 per cent are confirmed fraudulent, and the remaining 8 per cent fall into a grey zone where inefficiencies and abuse remain unaddressed. The report states that the real opportunity lies in the remaining 8 per cent where inefficiencies and abuse can be addressed without inconveniencing genuine policyholders.

To address these challenges, the report recommends a three-pillar framework—Prevention, Detection, and Deterrence-supported by a unified national codebook, governed GenAI tools, and real-time data exchange through platforms such as Ayushman Bharat Digital Mission and the National Health Claim Exchange.