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Coronavirus pandemic | General insurers to negotiate new package rates for COVID-19

Unlike regular surgical procedures, COVID-19 treatment requires interventions of varied kinds that cannot be covered under one single package

April 20, 2020 / 02:19 PM IST

With the rise in the number of coronavirus (COVID-19) cases in India, general insurance companies are set to come out with new package rates for treatment.

Unlike regular surgical procedures, COVID-19 treatment requires interventions of varied kinds that cannot be covered under one single package of a health cover.

Hospitals had sought intervention from insurers seeking a higher package rate than those for regular ailments since infection-prevention costs like protective gear, ventilators and specialised treatment push up COVID-19 hospitalisation costs by at least 30 percent.

The package rate depends on the type of procedure, hospital and location. In Mumbai, this could range between Rs 4 lakh for a simple surgery to as high as Rs 50 lakh for advanced treatments like cancer.

Health insurance policyholders may not immediately feel the pinch as product renewals are on a yearly basis. Once the new packages for COVID-19 are finalised between hospitals and insurers, new premiums could be applicable for customers next year onwards. Currently, there is no fixed COVID-19 package rates and treatment costs are being decided on a case-to-case basis.

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A vaccine works by mimicking a natural infection. A vaccine not only induces immune response to protect people from any future COVID-19 infection, but also helps quickly build herd immunity to put an end to the pandemic. Herd immunity occurs when a sufficient percentage of a population becomes immune to a disease, making the spread of disease from person to person unlikely. The good news is that SARS-CoV-2 virus has been fairly stable, which increases the viability of a vaccine.

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There are broadly four types of vaccine — one, a vaccine based on the whole virus (this could be either inactivated, or an attenuated [weakened] virus vaccine); two, a non-replicating viral vector vaccine that uses a benign virus as vector that carries the antigen of SARS-CoV; three, nucleic-acid vaccines that have genetic material like DNA and RNA of antigens like spike protein given to a person, helping human cells decode genetic material and produce the vaccine; and four, protein subunit vaccine wherein the recombinant proteins of SARS-COV-2 along with an adjuvant (booster) is given as a vaccine.

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Vaccine development is a long, complex process. Unlike drugs that are given to people with a diseased, vaccines are given to healthy people and also vulnerable sections such as children, pregnant women and the elderly. So rigorous tests are compulsory. History says that the fastest time it took to develop a vaccine is five years, but it usually takes double or sometimes triple that time.

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S Prakash, managing director of Star Health Insurance, told Moneycontrol that it (COVID-19 treatment) is not a regular surgery where a fixed amount is decided upon for a package.

“We can fix a cost for room rent, personal protective equipment (PPE) and the type of treatment and number of days of treatment, and also decide on the criteria for admission, number of days of hospitalisation, criteria for discharge among others. This will ensure a fair pricing. A wide interaction between hospitals and medically qualified insurance professionals is required to reach a consensus. This will enable a sustainable pricing,” he added.

Also Read: Live updates on Coronavirus outbreak in India

Unlike regular treatments, COVID-19 requires tests to be done multiple times. Plus, use of PPE kits on a daily basis and days of hospitalisation also influences the cost.

Further, treatments like Convalescent Plasma Therapy and Monoclonal Antibody have also been identified for COVID-19. For instance, Prakash explained the cost for Monoclonal Antibody treatment costs between Rs 1 lakh to Rs 1.5 lakh.

Moneycontrol had reported how hospitals are having to bear the additional cost of infection control due to COVID-19. These hospitals are now seeking higher limits under insurance for treating COVID-19 positive patients.

"This is different than regular hospitalisation cases. We have to see the kind of expenses incurred and then decide on the cost. It will be a continuous dialogue," said a senior general insurance executive.

India now has a total of 17,265 COVID-19 reported cases. Of this, 14,175 cases are active, 2,546 have been cured/discharged, one migrated. The total number of deaths in India among these reported cases is 543.

Industry sources said the government is also looking at bringing out certain treatment protocols and cost protocols. This will help pave the way for how insurance costs will be decided over the next few weeks.

Under a regular hospitalisation cover, a set package rate is decided for each procedure. For instance, if an individual is undergoing angioplasty a set package of say Rs 4 lakh could be fixed that includes surgery, room rent, doctor fees and other medical expenses.

The insurance regulator (IRDAI) has asked companies to cover COVID-19 hospitalisation under medical covers if the policy includes any type of hospitalisation. Further, IRDAI has said that insurers have to establish systems, procedures to enable efficient issuance of pre-authorisations on a 24-hour basis and for prompt settlement of claims.

Further, IRDAI has said decision on authorisation for cashless treatment for COVID-19 has to be communicated to the network provider (hospital) within two hours from the time of receipt of the request.

Follow our full coverage of the coronavirus pandemic here.
M Saraswathy
first published: Apr 20, 2020 02:19 pm

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