Last year, the Insurance Regulatory and Development Authority of India (IRDAI) set the ball rolling for a complete overhaul of health insurance policy structures, with standardisation of exclusion regulations. In April, it had allowed insurers to make minor changes to policies and premiums at the time of renewal. And, there has been no let-up in the pace of change in 2020 either. Since January 2020, the insurance regulator has announced a host of proposals, given clarifications and suggested changes. Read on to understand how these affect you as a policyholder.
Promise in the pipeline
Proposal to rein in hospitals
There have been plenty of anecdotes of hospitals charging their patients more if the latter have a health insurance policy. Insurers and policyholders have always detested this practice. However, despite efforts, including the creation of a preferred providers’ network (PPN) – by public sector general insurers – no solution seems to be in sight. Now, IRDAI member (non-life), T Alamelu, recently announced the regulator’s plan of standardising charges for some medical procedures, as per a PTI report. “It has been noticed that the rate of inflation of hospital charges at present is around 10-15 per cent and tariffs are being changed on a regular basis,” Alamelu noted at an industry event recently. This, coupled with the fact that insurers are not allowed to raise premiums every year, has led to a mismatch. "The General Insurance Council is in talks with third-party administrators (TPA) to standardise charges for some procedures such as cataract surgery and hysterectomy," she said.
Impact: Unclear until implementation
It will all boil down to how well it is executed. Lower hospitalisation costs will mean more of policyholders’ sums insured will be available for use during the year. However, it remains to be seen whether the IRDAI will be able to unilaterally push forward its objectives, given that it does not regulate hospitals.
Proposal to disclose hospitals’ quality parameters
The IRDAI has mooted a proposal, which if implemented, will give policyholders access to certain quality parameters at their insurers’ network hospitals. That is, hospitals they have tied up with to offer cashless facilities to their policyholders. For instance, they could be required to put up these hospitals’ total bed strength, number of full-time doctors, surgeons as well as consultant doctors at the hospitals, their qualifications and the number of qualified nurses, among other factors. Also in public domain will be these hospitals’ doctor-to-bed ratio, nurse-to-patient ratio, average admission time, discharge time, caesarean section rates and so on
Impact: Positive
You could use these ratios to your advantage. For instance, the higher the doctor-to-bed or nurse-to-patient ratios, the better equipped is the hospital to take care of you. Shorter average admission time and discharge time, on the other hand, will point to higher service efficiency.
Standard health product from April
All health insurers will have to sell a standard health insurance product – termed Aarogya Sanjeevani, followed by the insurer’s name – starting April 1, 2020. They are free to offer this product before this date too. The features, terms and conditions, will be uniform across insurers, but they will be free to decide the premiums. These will be basic plans with no riders or zone-based differential pricing.
Impact: Favourable
Policyholders will get simple-to-understand products.
Removing ambiguity over pre-existing illnesses
When the IRDAI issued guidelines on the standardisation of health exclusions in September last year, it had defined pre-existing diseases (PED). These are often the cause of disputes. One of the definition clauses permitted insurers to treat a condition, “for which any symptoms and or signs if presented… and has resulted in a diagnostic illness or medical condition” within three months of policy issuance as a PED. Due to the presence of this clause, policyholders who were unaware of their medical conditions – for instance, onset of diabetes, hypertension, high cholesterol – before buying a health policy faced the risk of claim rejection for no fault of theirs.
Recently, this clause was deleted, bringing much relief to policyholders. With this deletion, the definition of pre-existing diseases is quite simple: it means any condition, ailment, injury or disease that is diagnosed by a physician within 48 months prior to policy issuance or for which medical advice or treatment was recommended by, or received from, a physician within 48 months prior to the effective date of the policy or its reinstatement.
Impact: positive for policyholders
Removing such ambiguous sections will reduce grievances and heartburn for the common man.
Access to blacklisted hospitals during emergencies
In an attempt to crack down on errant hospitals, IRDAI allows insurers to disallow claims for treatment by medical practitioners and hospitals blacklisted by them. This rule, however, is not applicable when it comes to undergoing treatment after an accident. Recently, the insurance regulator extended this relaxation to emergency hospitalisation due to life-threatening ailments too.
Impact: positive for policyholders
Coming down on errant hospital is fine, but a relaxation to provide for emergency services is a welcome move. Ensure that you go through the list of such hospitals that insurers are required to notify customers about through email, text messages or their websites. Relief for group insurance policyholders
The process of merger of weaker and smaller public sector banks (PSB) with their larger state-owned peers has had unintended victims: their accountholders who were covered under group health policies. Customers of some banks were forced to port to individual health policies, which were expensive, after the one-year term expired, as acquiring PSBs had tie-ups with other insurers. Porting from one group health policy to another is not allowed. However, the insurance regulator stepped in to provide some relief and customers whose policies were yet to come up for renewal could heave a sigh of relief. IRDAI has given acquiring banks the option to continue with the acquired bank’s insurer even after the end of the policy tenure.
Impact: Favourable
Public sector bank customers with group covers can hope to renew their policies at reasonable premiums.
Pilot products under sandbox regulations
The IRDAI has laid the ground for innovation in health insurance products with its sandbox regulations. Within this framework, insurers can sell products that they could not offer otherwise. For example, ordinarily, you cannot form a group specifically to buy insurance, but under the sandbox framework, insurers can offer such products.
The insurance regulator has approved 30 health and motor insurance products that will be offered to customers between February 1 and July 31, 2020. In the health insurance space, products that will be provided include friend assurance – where a group of friends or acquaintances can come together to buy a group policy covering them collectively, app-monitored wellness programmes which could offer discounts based on improvement in health parameters for, say, diabetics and OPD (outpatient department) plans, which cover out-of-pocket medical expenses .
You can approach insurers directly through their branches or call centres ascertain the process and your eligibility to sign up for these products. After this period, the regulator may grant an extension, if there’s demand and the products have justified their existence. Once the extended period comes to an end, insurers will have to go back to the regulator to know about the product’s future.
Impact:
For policyholders, this will provide an opportunity to try out products with novel features. But you ought to remember that sandbox products are offered for a limited period, so a regular, comprehensive policy remains indispensable.
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