General Insurance Council will be responding to a PIL on high costs of COVID-19 treatment in private hospital. During the hearing of this PIL, senior advocate Harish Salve had said that insured customers need not worry about hospital bills since insurers are bearing the cost.
The General Insurance (GI) Council is planning to file an appeal to implead in a matter regarding an ongoing public interest litigation (PIL) in the Supreme Court on charges incurred in hospitals for Coronavirus (COVID-19) treatment.
The GI Council wants to point out that insurers cannot compensate by paying high costs for infection-control measures in hospitals.
In July, a PIL was filed by lawyer Sachin Jain against exorbitant charges in the private hospitals for COVID-19 costs. During the hearing, senior advocate Harish Salve representing Healthcare Foundation of India had said that health insurance customers who can afford the costs should not mind as the insurers will foot these bills.
Salve had also said that hospitals are not making money and that there is a tremendous financial burden due to COVID-19 treatment and decrease in footfalls of non-Coronavirus patients.
GI Council is the industry body of the non-life insurance and standalone health insurance companies in India. This body will be making an appeal to implead with the industry consensus.
“There is a perception that insurers have deep pockets and keep paying out high claims. However, that is not the case. If insured customers keep overcompensating for uninsured persons in hospitals, the premiums will go up,” said an official.
Insurance works on a pool concept. So whatever money is collected as a premium is paid out as claim. If in a year the claim paid out exceeds the premium collected, the excess amount is passed on to customers in the next year in the form of a premium hike.
"Already there is an under-penetration of insurance. If premiums keep going up then insurance will become unaffordable. We want to bring this to the notice of the apex court,” the official from GI Council added.
GI Council is engaging lawyers and will file an appeal to implead in the PIL and offer their viewpoint on the perception that general insurers are able to pay high claims. This appeal will be filed by August 18.
Till now, close to 100,000 claims related to COVID-19 have been filed with general insurance and health insurance companies. These claims amount close to Rs 1,500 crore. However, less than half of this amount has been settled so far by general/health insurers.
A standard package was devised by the GI Council so that there is a reference rate for insurers when COVID-19 claims are filed. However, insurance company executives told Moneycontrol that charges are not being equally divided.
“For masks, gloves and PPE kits, only the insured persons are being charged and not others. How is this fair? Why should only insurers keep paying for others just because a person has bought a health insurance,” said the claims head of a mid-sized private insurer.
If the SC accepts the plea to appeal in this matter, the GI Council will present its views on the COVID-19 charges being incurred by insurers and how it is not sustainable to keep paying.Moneycontrol had reported earlier how customers are being presented with higher bills amidst the COVID-19 outbreak.