Case Details

The case centered around Ranjan Mohapatra, a 67-year-old resident of Bhubaneswar, who had purchased Star Health’s Senior Citizens Red Carpet Health Insurance Policy. In January 2018, he was hospitalized for high fever, diabetes complications, and pneumonia. Under the policy, which covered pre-existing conditions like diabetes, Mohapatra applied for cashless hospitalization but was denied by the insurance company.

Star Health rejected his pre-authorization request and later turned down a reimbursement claim, demanding medical documents related to Chronic Obstructive Pulmonary Disease (COPD) and Rheumatoid Arthritis (RA)—conditions that were not linked to his current hospitalization. Mohapatra then filed a complaint with the Odisha State Consumer Commission, which ruled in his favor, prompting Star Health to appeal the decision to the NCDRC.

NCDRC’s Ruling

In its September 4 ruling, the NCDRC upheld the key findings of the State Commission. The bench, comprising Presiding Member Mr. Subhash Chandra and Member Dr. Sadhna Shanker, concluded that Star Health had acted unfairly by requesting unrelated medical records and denying the claim. The court ruled that the insurance company’s actions amounted to unfair trade practices and deficiency in service.

The NCDRC directed Star Health to:

• Reimburse Rs. 3,20,000/- for the medical expenses incurred by Mohapatra, with an interest rate of 10% per annum from the date of hospital discharge.
• Pay litigation costs of Rs. 1,00,000/-.
• Pay punitive damages of Rs. 2,00,000/- (reduced from Rs. 5,00,000/- initially awarded by the State Commission).

The court, however, set aside the Rs. 15,00,000/- compensation that the State Commission had earlier awarded, stating that the interest granted on the reimbursement sufficiently covered the damages.

Key Observations by the Court

The NCDRC found that Star Health’s insistence on medical records for conditions such as COPD and RA—unrelated to the respondent’s hospitalization—was unjustified. The court noted that these conditions were not the reason for Mohapatra’s admission to the hospital, and the insurer's demand for these documents seemed intended to avoid settling the claim.

The court remarked that the policy, specifically designed for senior citizens, carried higher premiums and was marketed as providing special treatment for this vulnerable demographic. However, the insurer failed to uphold its promises by delaying and ultimately denying the claim based on irrelevant documentation.

Background of the Insurance Policy

The Senior Citizens Red Carpet Health Insurance Policy by Star Health was designed for individuals above the age of 60, offering coverage for pre-existing conditions like diabetes and hypertension. In Mohapatra’s case, the policy explicitly covered his medical condition, making the denial of his claim particularly contentious.

Lower Court Rulings

Before reaching the NCDRC, the Odisha State Consumer Disputes Redressal Commission had ruled in favor of Mohapatra in July 2022. The State Commission ordered Star Health to pay Rs. 3,20,000/- in hospitalization costs, along with Rs. 15,00,000/- as compensation, Rs. 5,00,000/- in punitive damages, and Rs. 25,000/- in litigation costs. Star Health appealed the order, claiming that the respondent failed to provide adequate medical documentation.

Legal and Industry Impact

This case highlights the court’s scrutiny of health insurance practices, especially those targeting senior citizens. The ruling sends a clear message to insurance companies that denial of claims on arbitrary grounds will not be tolerated. The NCDRC’s judgment reinforces the obligation of insurers to act in good faith and handle claims with fairness and transparency.

The decision may influence future cases where insurers are accused of denying claims based on irrelevant or excessive documentation demands, particularly in senior citizen health policies.

Conclusion

The NCDRC’s ruling in Star Health & Allied Insurance Co. Ltd. v. Ranjan Mohapatra underscores the importance of fair practices in the insurance industry. By holding the insurer accountable for unfair trade practices and deficiency in service, the court has reaffirmed the rights of consumers, especially vulnerable senior citizens, in receiving the benefits they are entitled to under their health insurance policies.

Legal Disclaimer: The information provided in this news article is for general informational purposes only and does not constitute legal advice. The article covers the case Star Health & Allied Insurance Co. Ltd. v. Ranjan Mohapatra (First Appeal No. 668 of 2022) as adjudicated by the National Consumer Disputes Redressal Commission (NCDRC) on September 4, 2024. The details included, such as the ruling, court observations, and case facts, are based on publicly available records and the court's final decision.

Readers are advised not to rely solely on the information provided herein for any legal decisions. For specific legal advice or concerns regarding consumer rights or insurance claims, it is recommended to consult with a qualified legal professional. The publisher disclaims any liability for any losses or damages resulting from reliance on the content of this article.

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