Disclosure, Consumer Protection, And Adjudication in Indian Health Insurance: Evidence from Insurance Ombudsman Decisions

Cost-sharing provisions are an established feature of health insurance contracts, but their effectiveness depends on whether policyholders can anticipate their financial consequences and whether insurers apply them consistently with regulatory requirements. This study examines how cost-sharing disputes are resolved within India's insurance adjudication system. Using a comparative analysis of fifteen Insurance Ombudsman decisions involving room-rent caps, proportional deductions, copayments, and sub-limits, the study develops a structured framework based on transparency, predictability, and regulatory application. The evidence indicates that adjudicated outcomes are closely associated with a combined disclosure-andapplication standard rather than with the magnitude of the policyholder's financial loss. Among thirteen cases classified as decisive, all eight cases involving inadequate disclosure and/or non-compliant application resulted in relief for policyholders, whereas all five cases satisfying the disclosure-and-application standard were upheld for insurers. Fisher's exact test provides descriptive support for this association (p = 0.0008), while no comparable association is observed for the magnitude of financial harm (p = 0.565). Process tracing of the Ombudsmen's stated reasoning supports the same pattern: relief is linked primarily to whether the relevant provision was adequately disclosed and correctly applied, rather than to the size of the resulting out-of-pocket burden. The evidence does not permit disclosure and regulatory application to be identified separately, nor does it support causal inference for the wider health insurance market. Further, the small adjudicated sample and outcome-informed initial coding impose important limits on generalisability. Blind recoding provides a sensitivity analysis for outcome-informed classification, with weighted Cohen’s ranging from 0.54 to 0.75 and Krippendorff’s = 0.77 after revision of the coding instrument. The findings highlight the role of disclosure quality and regulatory compliance in insurance contract enforcement and suggest that improved standardisation of cost-sharing information may strengthen consumer protection without eliminating cost-sharing as an insurance-design mechanism.