From a consumer advocacy website CERC:
Mediclaim policies, considered a panacea, prove a headache when one goes for a claim or renewal. A recent judgement of the Gujarat High Court mitigates the grievances of the policy holders to a large extent by directing the insurance companies to renew Mediclaim policies on existing terms and conditions.
For details go to their website:
http://www.cercindia.org/
And click on Menu Law -> Some Cases. The mediclaim related information is at the end of page.