New-look Health Plans
IRDA HAS MADE CHANGES IN HEALTH POLICIES FOR MORE TRANSPARENCY IN PRODUCTS AND PRICES. THE LOW-DOWN ON WHATAT THE CHANGES MEAN FOR YOU
IRDA has made changes in health policies for more transparency in products and prices. The low-down on what the changes mean for you
Difficult times often expose vulnerabilities of life. Coronavirus has made people realise how easily life can be taken away. It has also made them understand the importance of health insurance. We are in a situation where there may be possibility of the entire family requiring medical care. To increase health insurance penetration, the Insurance Regulatory And Development Authority (IRDA) has introduced a number of changes to improve coverage, service quality and claim experience of policyholders. Some have already been implemented.
These changes are a good point for you to take stock of your health insurance cover. And if you do not have health insurance, it can be a good time to buy one considering customer-friendly changes IRDA has brought about and the health crisis we are facing.
Corona Cover
Many policyholders are not sure if their policy covers coronavirus infection or not. “Viral infections are covered. This is one of the common infections a policyholder can contract. All Covid-related diseases and complications are covered by the basic health policy,” says Dr. S Prakash, Managing Director, Star Health and Allied Insurance.
IRDA has issued guidelines to remove doubts among policyholders. “A basic health policy covers medical expenses, that is, hospitalisation expenses, for any viral infection, including coronavirus. Also, as instructed by IRDA, insurers are liable to pay for treatment of coronavirus,” says Ravi Vishwanath, President, Accident & Health, HDFC ERGO General Insurance.
However, this does not mean everything is hunky- dory. As the pandemic spreads, finding a bed in a hospital is not easy. Even if you do, you may have to bear high out- ofpocket expenses due to corona-specific disposable items.
“There are a lot of consumables such as PPE kits that are not paid for in a standard policy. Patients can end up spending as much as one-fourth of their bill on PPE kits during extended hospitalisation,” says Krishnan Ramachandran, MD & CEO, Max Bupa Health Insurance.
The costs being charged are not uniform. “Hospitals are charging ` 400 to ` 12,000 per PPE kit. Different hospitals are claiming different prices for same product and brand. We can accept some difference due to quality of material and type of product but such a huge difference is difficult to understand,” says Dr. Prakash of Star Health and Allied Insurance.
Some insurers are paying for these consumables but only to an extent. “We are paying for reasonable PPE costs. PPE kits have become a necessity. We understand their importance in safeguarding people,” says Ramachandran of Max Bupa.
Unless there is a mechanism to prevent levy of arbitrary charges, patients will keep bearing significant out- of-pocket expenses despite having a good policy. “Representation has been submitted to the regulator. I hope it will look into it,” says Dr. Prakash.
State governments have also swung into action to ease the process. “With state governments’ efforts to standardise costs for Covid-19 treatment, the insurance industry is also working towards standardisation of costs paid for consumables such as PPE kits. This is expected to ease Covid-19 treatment payouts,” says Vishwanath of HDFC Ergo.
Many insurers have launched or plan to launch corona-specific plans. “We are in the process of filing a coronavirus policy which may offer wider coverage, including quarantine and hospitalisation expenses,” says Subrata Mondal, EVP (Underwriting), IFFCO Tokio General Insurance.
Understand coverage details while buying a new policy. “A regular health policy does not cover infectious diseases for the first 30 days. Apart from this, standard exclusions, mentioned in the policy, will be applicable in case of hospitalisation. OPD consultations/treatments are covered if they are part of pre- and post-hospitalisation expenses of the main claim,” says Vishwanath of HDFC ERGO.
Universal Plan/Eight-year Rule
The extent of coverage, list of diseases covered, diseases excluded, waiting period for pre- existing diseases, all these vary widely from one health plan to another and one insurer to another. There is no way for a layman to differentiate between plans offered by different insures. This makes porting tedious.
To address this, IRDA has come up with a standard plan called Arogya Sanjeevani that all health insurers will have to offer from June 15. “Arogya Sanjeevani is a base plan with limited features. It should work in the
current environment in Tier-II and Tier-III markets as people are worried about expenses for coronavirus treatment. This can be a starting point for customers looking to secure health of their families,” says Ramachandran of Max Bupa Health Insurance.
Those looking for a basic and affordable plan can go for it. “One reason people don’t buy health insurance is confusion created by plethora of products. Arogya Sanjeevani offers common features and exclusions. This makes it an ideal product for base coverage,” says Mondal of IFFCO Tokio.
While buying, you just have to compare the price and find the best service quality. “We will later offer easy upgrade to more comprehensive plans,” says Ramachandran of Max Bupa.
IRDA has also said that once a policy completes eight years with continuous renewal, insurers cannot apply a look-back. “After the expiry of the period, no claim shall be contestable except for proven fraud and permanent exclusions specified in the contract. The policies would, however, be subject to limits, sub-limits, co-payments, deductibles, as per the contract.”
AYUSH Coverage
A lot of people take treatment from alternative medicine systems. There are few plans for these treatments. IRDA has asked health insurers to encourage other medicine systems. “Coverage for alternative treatments such as Ayurveda, Unani, Sidhha and Homeopathy is included in indemnity-based health plans and Arogya Sanjeevani,” says Ashutosh Shrotriya, Head, Products & Business Process, Religare Health Insurance. Insurers have also started designing products keeping requirements of senior citizens in mind. “Such products have a shorter waiting period for pre- existing ailments, easier co-payment options, coverage for multiple co-morbidities and comprehensive health check packages,” he says .
Late Renewal/Health Incentives
You will now get a longer grace period for policy renewal. “The insurer shall provide a mechanism to condone a delay of up to 30 days from the due date without deeming such condonation as break in policy. However, coverage need not be available for such period,” says IRDA. This means you can carry forward no- claim bonuses if you renew your policy during the grace period. However, you cannot claim anything in the gap period.
The industry is also encouraging healthy habits. “In our flagship product, every claim-free year is rewarded with 10 per cent cumulative bonus, up to 50 per cent. We also reward customers for fitness activities. The wellness points accumulated can be redeemed against reimbursement of out-patient expenses that the customer incurs in a policy year,” says Sanjay Datta, Chief of Claims, Underwriting and Reinsurance, ICICI Lombard General Insurance. “Some other benefits are annual health check-ups, discount on pharmacy bills, complementary doctor consultations, online consultations, etc,” says Shrotriya.
Many issuers were charging prohibitive premiums from senior citizens. The regulator has taken note of this. “The premium for health insurance products offered by life insurers, general insurers and health insurers to senior citizens shall be fair, justified, transparent and duly disclosed upfront,” it has said.
Claim from Multiple Policies
It is not uncommon for many people to have two or more active policies such as corporate, family floater, top-up and individual. The regulator wants insurers to make it easy for policyholders to make simultaneous claims from multiple policies for single hospitalisation. “Efforts are being made by insurers in this direction. Customers who hold multiple
VIRAL INFECTIONS ARE COVERED. THIS IS ONE OF THE COMMON INFECTIONS A POLICY HOLDER CAN CONTRACT. ALL COVIDRELATED DISEASES AND COMPLICATIONS ARE COVERED BY THE BASIC HEALTH POLICY ISSUED BY INSURERS”
Dr. S. Prakash MD, Star Health and Allied Insurance