Health insurance wrap 2019: How policies were streamlined during the year

Let us understand how health insurance just got better during the year.

Pre-Existing illness

There were several changes in the conditions of coverage of existing health conditions in favour of policyholders. The regulator has asked insurance companies to mention the list of pre-existing diseases, which would not be covered up to a specified period of not more than 48 months from the start of the coverage with the firm.

The policyholder also has the option of declaring any disease contracted up to three months after taking the policy. “If the policyholder is diagnosed with any disease within three months of the issuance, then the same will be considered as a pre-existing disease, if disclosed by the policyholder,” says Amit Chhabra, Head- Health Insurance, Policybazaar.com. This would help in reducing the waiting period for that particular disease by at least 9 months.

Permanently excluded diseases

In a major relief to those denied health insurance coverage due to adverse illnesses, the regulator IRDA has notified a list of 14 diseases, any of which can be mentioned as a permanent exclusion under a health insurance policy, while the person gets a valid coverage for other health-related hospitalisation or day care expenses. This means someone who has contracted HIV, develops a loss of hearing, has chronic kidney issues, Hepatitis B, stroke, epilepsy or heart ailments, can still get a health cover for protection against other hospitalisation expenses not related to these diseases.

Rationalising Exclusions

IRDA instructed the insurance companies to include a standard list of exclusions and mandated the code number of each exclusion to be mentioned at the time of claim rejection.

“Standardising most common exclusions is a good step ahead, which would bring uniformity in interpretation as well as simplification and ease of understanding to the policyholder. This would go a long way in reducing grievances. Coding these standardised exclusions would help in excellent data and analysis for the insurers as well as the industry as a whole,” said Dr. Shreeraj Deshpande, Chief Operating Officer, Future Generali India Insurance Company Limited.

Several exclusions, which were found to be irrational, have been done away with. For instance, diseases contracted after taking the policy, artificial life maintenance, mental illness, menopause and puberty related exclusions would no longer be permitted by the regulator. The other exclusion that has been done away with is the rejection of a claim on the basis of a clause claiming the policyholder’s failure in seeking or following medical advice or treatment. “Earlier, claims could be rejected on these grounds. Now that’s excluded. It is definitely good for the customer as it helps remove any ambiguity,” says Chhabra.

Premium Payment Frequency

In the guideline on filing minor policy changes and implementing without IRDA approval, the regulator had mentioned that premium payment at frequencies such as monthly, quarterly, semi annually can be considered. However, Moneycontrol found that none of the new policies filed with the regulator offered this instalment system in health insurance premium payment.

Chances are that policyholders might not see this happen in the near future, as the guideline doesn’t bind insurance companies to offer the monthly, quarterly, half-yearly health premium payment options. “The circular on minor modifications doesn’t make it mandatory for an insurance company to offer higher frequency in premium payment,” says Subramanyam Brahmajosyula, Head - Underwriting & Reinsurance, SBI General Insurance. A major concern among insurers with respect to offering premium payment options in instalments is fear that the policyholder might not pay the premium for the year after a major claim.

Fitness discounts

The insurance regulator paved the way for advancing the health and wellness specific initiatives  offered by general insurance companies through an exposure draft. Apart from giving discounts in premium for fitness initiatives, health specific benefits or redeemable vouchers can be offered with respect to gymnasium or yoga memberships, out-patient consultation, health check-ups, pharmaceuticals, protein supplements and the like.

Select TPA

Policyholders often faced deficiency in service due to the third party administrator (TPA) that acts as the middle-man between the hospital and insurance companie while settling claims, can heave a sigh of relief. IRDA has introduced a concept paper that discusses the idea of permitting policyholders to select the TPA they prefer either while buying the policy or during renewal.