With the ongoing COVID-19 pandemic, and other contagious diseases that have surfaced all across the globe in the past few decades, there are genuine concerns that despite your best efforts to stay fit and healthy, your chances of falling prey to such a pandemic is a distinct possibility. A sudden tryst with hospitalisation is no more an unforeseen medical adversity considering the rising incidence of accidents, communicable, vector-borne and lifestyle diseases. Over the years, most of us must have experienced multiple cases of hospitalisation within our immediate family.
Health Insurance–The Solution
Fortunately, health insurance is available for us to take care of various unforeseen medical emergencies. A health insurance policy usually covers not only the cost of hospitalisation but even related medical expenses, such as diagnostic tests and medication, incurred before and after the event of hospitalisation. Unlike other insurance policies, which are usually considered push products, a large number of policyholders are opting to buy medical policies voluntarily. Over the years, health insurance plans have become quite popular as they can be bought online and are cheap.
Moreover, in view of the ongoing coronavirus outbreak, most health insurers are now offering health insurance through tele medical mode for the convenience of customers. While taking health insurance policy through telemedical, you will be required to make a declaration about your health condition through a call with a doctor appointed by the insurer who will be asking you simple questions regarding your current health conditions and lifestyle habits.
Rising Cost of Health Insurance
Health insurance premiums are likely to rise by 5-20 per cent in the next 2-3 months as specialised health and general insurers plan to refile their products by revamping the existing products and making them more standardised as per the guidelines issued by the Insurance Regulatory and Development Authority of India (IRDAI). In 2019, the IRDAI issued numerous guidelines throughout the year barring health insurers from denying a health insurance policy for genetic disorders, mental health procedures, puberty and menopause-related illnesses, among many others. Now, in order to accommodate the more extensive coverage requirements stated in the new guidelines, insurance companies are refiling their products and increasing prices.
Making the Policy More Comprehensive
As part of its regulations issued in October 2019 on standardising exclusions in health insurance, IRDAI listed out several instances where a health cover to an individual cannot be denied under any circumstances. For instance, all health conditions and illnesses acquired after the issuance of policy will be covered by the health policy. Some of the important and major diseases that must be added to the list include Alzheimer, Parkinson, AIDS/HIV and morbid obesity. However, if an insurer does not want to cover some specific ailments like epilepsy, chronic kidney diseases and HIV/AIDS must use specific wordings as defined by the regulatory body in the policy terms. As per the IRDAI guidelines, the insurer must also specify a waiting period i.e. 30 days to 1 year after which the coverage would begin of the ailment.
Take another example of Mental Health care, the Mental Healthcare Act 2017, which came into force from May 29, 2018, mandates every insurer to ensure medical insurance for mental health ailments. The insurers have been directed that they cannot deny coverage to policyholders who have used opioids or anti-depressants in the past. Also, insurers can’t deny coverage to people with a proven history of clinical depression, personality or neurodegenerative disorders, sociopathy and psychopathy. Apart from these, in the up-coming policies, age-related ailments including cataract surgery and knee-cap replacements would also have to be covered in the health insurance policy. Also factory employees, working with harmful chemicals, which impact health over a long-term period, cannot be refused respiratory or skin ailments that arise as a result of workplace conditions.
Why the price increase?
In order to implement it right on time, IRDAI has made it mandatory for all insurance companies to get these guidelines implemented in the health insurance products within one year of the issuance of the guidelines. As per the underwriting guidelines, health insurance policies are generally priced depending on the extent of coverage and the list of ailments being covered by the policy. With the increase in the number of ailments being covered within the health insurance plan including genetic disorders, mental health and other critical ailments, insurers will get compensated by charging a higher premium. This results in the increase of health insurance premium for customers.
In future, once the revamped and revised health insurance products are introduced in the market, it will be important for the people to wisely choose their plans. There are numerous factors that one must keep in mind while choosing the insurer and the insurance plans that include the claim settlement rate of the insurer, some prominent features including the total number of critical and pre-existing ailments covered along with their waiting period, the number of network hospitals of each insurer, no claim bonus, co-payment clause and room rent eligibility.(The writer is Health Business Head, Policybazaar.com)