Insurance Claim for Bariatric Surgery Rejected as “Obesity Treatment,” Consumer Court Orders Insurer to Pay in Full
An insurance claim for bariatric surgery was rejected as obesity treatment, but a consumer court has ordered the insurer to pay the claim in full.
An insurance claim for bariatric surgery was rejected as an obesity treatment, but a consumer court has directed the insurer to pay the claim in full.
Insurance Claim: The Ernakulam District Consumer Disputes Redressal Commission has directed an insurance company to pay Rs 3,50,266 to a policyholder whose mediclaim was rejected on the ground that the treatment undergone was a weight-loss procedure excluded under the policy.
The commission found that the insurer had classified the surgery as obesity treatment without producing any medical evidence to support that position, and ruled that the rejection amounted to an unfair trade practice.
Insurance Claim: Background of the Claim
The complainant had purchased a health insurance policy from National Insurance Company in February 2020, covering the family for one year from mid-March 2020, at a premium of approximately Rs 22,000 including taxes.
In June 2020, a few months into the policy period, the complainant’s spouse was admitted to Lakeshore Hospital in Kochi for four days and underwent Laparoscopic Sleeve Gastrectomy, a bariatric surgical procedure. The treatment cost Rs 3,20,266, for which a claim was subsequently filed with the insurer.
Two months later, the insurer rejected the claim, citing a policy exclusion clause that bars coverage for obesity, conditions arising from obesity, and any weight-control programme or related treatment.
The complainant subsequently approached the insurer’s internal grievance officer, whose decision also went against the claim. The dispute was then taken to the Insurance Ombudsman, which likewise dismissed it. Only after these three rejections did the complainant approach the consumer commission.
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Insurance Claim: What the Commission Examined
Insurance Claim: During the hearing, the complainant submitted medical certificates showing that the patient had a documented history of weight gain over 18 months, hypertension for two years, breathlessness on exertion, and knee joint problems. Based on these records, the complainant argued that the surgery had been performed to address this combination of conditions rather than obesity in isolation.
The commission noted that the insurance company had not submitted any independent medical opinion to substantiate its claim that the treatment was solely for obesity. It held that an insurer cannot reject a claim on the strength of an exclusion clause alone, without medical evidence establishing that the exclusion applies.
The insurer separately argued that a 2019 circular issued by the Insurance Regulatory and Development Authority of India (IRDAI), aimed at standardising exclusions across health insurance policies, entitled policyholders to broader coverage from the date it was issued, in exchange for higher premiums. The commission rejected this argument, pointing out that the circular explicitly stated its provisions would apply to new policies issued from 1 October 2020 onward. Since the complainant’s policy had been issued on 3 February 2020, it fell outside the circular’s applicability.
Insurance Claim: The Order
The commission, comprising President D.B. Binu along with members V. Ramachandran and Sreevidhya T.N., ruled that the claim rejection amounted to an unfair trade practice and directed the insurance company and its co-respondents to jointly pay:
Rs 3,20,266 towards the treatment cost
Rs 20,000 as compensation for mental agony and hardship
Rs 10,000 towards litigation costs
The company has been given 45 days from the date of the order to make the payment. Any delay beyond this period will attract 7.25 percent annual interest on the treatment cost component, calculated from the date the original complaint was filed.
The commission based its findings on the medical records and policy documents placed before it during the proceedings, and reiterated that an exclusion clause cannot be invoked to deny a claim without expert medical opinion establishing that it applies to the specific treatment undergone by the insured. It further noted that the burden of proving an exclusion lies with the insurer, and that a policy clause, by itself, does not amount to conclusive evidence of the purpose behind a medical procedure. The commission held that insurers are expected to support such defences with documented clinical assessment rather than relying solely on the wording of the policy at the time of repudiation.
