Insurance Article, The Insurance Times 2020, The Insurance Times September 2020

HEALTH INSURANCE&HEALTHCAREIN INDIA DURING THE LOCK DOWN PERIOD & THEREAFTER

INTRODUCTION:

Health is a fundamental human right. It is pertinent for the realization of basic human needs and for a better quality of life. Expanding the nation’s capacity to meet currently evolved corona crisis & thereby posing difficulty in planning, management and resource allocation problems even if it just involved enlarging an existing well-structured and functioning of health care system. Current Corona crisis and other communicable diseases, changing lifestyle, ageing population, inadequate medical infrastructure; all these take heavy tolls in India crushing the universal health access and pushing up out-of-pocket expenses and health insurance premiums – creating a wide chasm in our health management aspects, but it should be bridged by taking a preventive approach, promoting healthy living and making good use of medical technology. At personal level, buying health insurance as a priority will provide more people with medical security reducing their financial anxiety, thus empowering the community to hold their legislative body accountable for the status of healthcare in the country.

Predicament comes in diverse intensities. As a “landscape scale” event, the coronavirus has created great ambiguity, elevated stress and anxiety, and prompted tunnel vision, in which people focus only on the present rather than towards the future. During such a crisis, when illness may be inevitable information is unavailable or inconsistent, and when people feel unsure about what they know, behavioral science points to an increased human desire for transparency, guidance, and making sense out of what has happened.

COVID-19’s parallel unfolding crises present in our country with infinitely complicated challenges and with no easy answers. Never have administrators been put under such an intense spotlight by a skeptical public gauging the care, authenticity, and purpose that organizations demonstrate. Leaders lack a clear playbook to quickly connect with rattled public and communities about immediate matters of great importance, much less reassure them as they ponder about the future. The health insurance & healthcare industry is facing many changes that pose new challenges to insurers, providers and healthcare organizations big and small. In particular, the fast-evolving government regulations, technological innovations, and patient expectations create a new environment in which running a medical practice aren’t just about treating patients anymore.

FACTORS DETERMINING HEALTH OF INDIVIDUAL:

The factors that determine the health of any individual are given below:

a) Lifestyle factors:

Lifestyle factors are those which are typically in the control of the individual concerned e.g. exercising and eating within limits, avoiding worry and the like leading to good health; and bad lifestyles & habits such as smoking, drug abuse, unprotected sex and sedentary life style features (with no exercise) etc. leading to diseases such as cancer, aids, hypertension and diabetes, to name a few. Though the Government plays a critical role in controlling/influencing such behaviour (e.g. punishing people with non-boilable imprisonment who abuse drugs, imposing high taxes on tobacco products etc.), the personal responsibility of an individual plays a deciding role in controlling diseases due to life style factors.

b) Environmental factors:

Safe drinking water, sanitation and nutrition are crucial to health, lack of which leads to serious health issues as seen all over the world, especially in developing countries. Communicable diseases like Influenza and Chickenpox etc. are spread due to bad hygiene, diseases like Malaria, Dengue, Ebola, are spread due to bad environmental sanitation, while certain diseases are also caused due to environmental factors e.g. people working in certain manufacturing industries are prone to diseases related to occupational hazards such as Asbestosis in workers in asbestos manufacture and also diseases of the lungs in coal miners. Recently coronavirus is speeded as a pandemic originated from China creating the disaster and imposing the wide spread lock down in several countries, even in India.

c) Genetic factors:

Diseases may be passed on from parents to children through genes. Such genetic factors result in differing health trends amongst the population spread across the globe based on race, geographical location and even communities. It is quite obvious that a country’s social and economic progress depends on the health of its people. A healthy population not only provides productive workforce for economic activity but also frees precious resources which is all the more crucial for a developing country like India. At an individual level, ill health can cause loss of livelihood, inability to perform daily essential activities and push people to poverty and even commit suicide.

Covid-19 – now emerging as the fear factor:

COVID-19 is an infectious disease caused by a new coronavirus first identified in December 2019. Coronavirus is a family of viruses known to cause respiratory infections. There is no vaccine yet to prevent COVID-19, and no specific treatment for it, other than managing the symptoms. China’s government initially withheld basic information about the coronavirus from the public, underreported cases of infection, downplayed the severity of the infection, and dismissed the likelihood of transmission between humans. Authorities detained people for reporting on the epidemic on social media and internet users for “rumor-mongering,” censored online discussions of the epidemic, and curbed media reporting. In early January, Li Wenliang, a doctor at a hospital in Wuhan where infected patients were being treated, was summoned by police for “spreading rumors” after he warned of the new virus in an online chat room. He died in early February from the virus. On March 11, 2020, the World Health Organization (WHO) declared that an outbreak of the viral disease COVID-19 – first identified in December 2019 in Wuhan, China – had reached the level of a global pandemic. Citing concerns with “the alarming levels of spread and severity,” the WHO called for governments to take urgent and aggressive action to stop the spread of the virus. India was officially under lockdown from March 25, 2020 onwards [in India, a complete nationwide lockdown was in place up to 14th April (first term), extended up to 3rd May (second term), further extended up to 17th May (third term)& finally up to 30th May, 2020 and subsequently lock down was continued differently for different states being based on different zones turning from green to orange and orange to red or vice versa]– during the entire period there was no traditional socializing, no takeaway food, no trips to the mall, cinemas, and theaters and, crucially for students as schools & colleges are under shutdown, no going to work. The challenges presented to citizens who were working from home are many. Internet connections was initially only to resort, businesses wanted to make sure that their system security was not compromised, and an increased effort to manage communication within workforces not physically working together was mainly the hurdles to overcome. Communication and providing the services were crucial at the best of times, and the world is not in the best of times right then. To ensure business continuity throughout COVID-19 and thereafter, proper and functional communication had to be maintained. IT & digital communication platform were aimed at transforming internal communications and company culture needed to flow beyond the physical office to keep ‘business as usual’ – also knowing the health status and wellbeing of the people.

WHO already declared that human being now need to accept the blatant fact that this Coronavirus will remain forever like AIDS, Dengue etc. So everyone needs to live with this. Every crisis has a life cycle and emotional states and needs vary with the cycle’s stages. The COVID-19 crisis may be divided in five stages: resolve, resilience, return, re-imagination, and reform. These stages span the crisis of today to the next normal that will emerge after COVID-19 has been controlled. The duration of each stage may vary based on geographic and population density context, and all related entities may find themselves operating in more than one stage simultaneously.

Types of Health Insurance Policy:

A health insurance policy is a contract between an insurer and the insured (an individual or a group) in which the insurer agrees to provide certain specified health insurance cover at a specific premium subject to fulfillment of certain terms and conditions specified in the policy. In case of need, the insured may pay the expenses out of his/her own pocket and then may claim for reimbursement. Alternatively, under “cashless” facility, the insurer pays the expenses directly to the service provider. The hos­pi­tal­iza­tion cov­er­age generally includes cost of sur­gi­cal oper­a­tions, doctors’ fees, nurs­ing care, charges associated with pathol­ogical and diag­nos­tic tests, hos­pi­tal accom­mo­da­tion, and pre/post hos­pi­tal­iza­tion expenses.

Health insurance policy as available beforehand may be of various types like (a) Hospitalization policy, (b) Hospital Daily Cash Benefit policy, (c) Critical Illness benefit policy, and (d) Surgical Cash Benefit policy. The first one is the most comprehensive one and it covers pre and post hospitalization expenses in addition to the expenses incurred during the period of admission into the hospital. Under Hospital Daily Cash Benefit policy, a fixed sum is paid per day up to certain days specified in the policy; and there may be provision for increased amount per day for admission in Intensive Care Unit (ICU). A fixed lump-sum amount is paid to the insured in case of diagnosis of a specified illness or on undergoing a specified procedure under Critical Illness benefit policy. This amount may not be dependent on the actual cost of the treatment. However, the drawback of this type of policy is that the policy ceases to remain in force once the lump sum amount is paid. Under Surgical Cash Benefit policy, lump sum payment is made on undergoing a specified surgery. Further, there are policies for senior citizens too. Apart from the Hospitalization policy, the others should be viewed as “add-ons” or riders; and these policies can be taken separately or in addition to the Hospitalization policy. Moreover, there is “Cumulative Bonus” clause in Hospitalization policy under which for every claim-free year; the Sum Insured is increased by a certain percentage at the time of renewal subject to a maximum percentage (generally 50%). But in case of a claim, “Cumulative Bonus” is reduced by certain percent (usually 10%) at the time of next renewal. There may also be a provision for reimbursement of cost of health check up at the end of certain claim-free period like four years. In order to be eligible to make claims under health insurance policies, certain minimum duration of stay (usually for 24 hours) in the hospital is required; but this time limit is not applicable for treatment of injuries arising out of accident and for certain specified treatments.

Again, health insurance policies may be individual policy or “Family Floater Policy”. The ‘floater’ policy has one single sum insured, which can be utilized by any or all insured persons of the family in any proportion or amount subject to maximum ceiling of the policy sum insured.

Health insurance schemes can be broadly categorized as:

  1. Voluntary health insurance schemes of public and private sector insurers.
  2. Mandatory health insurance schemes or government run schemes like Employer State Insurance Scheme (ESI) and Central Government Health Insurance Scheme (CGHS).
  3. Insurance offered by NGOs/Community based health insurance (CBHI) like, Self-Employed Women’s Association (SEWA), Tribuvandas Foundation (TF) etc.
  4. Employer-based schemes.

 

Recent Introduction of new uniform Health Insurance Policy by IRDAI – to be complied by all insurers:

The Insurance Regulatory and Development Authority of India (IRDAI), on January 2, 2020 issued a circular mandating health and general insurance companies to offer a standardized product that will take care of the basic requirements of policyholders. According to IRDAI, the policy will be named as Arogya Sanjeevani Policy, succeeded by the name of the insurance company. Insurers will have to start offering the policy from 01/04/2020.

It is a welcome move to increase penetration in the lower-middle-income segment as this will come with a facility of paying a premium in installments. Thus, making it an attractive avenue for people as it will not only be easy on their pocket but will also give them enhanced coverage. Moreover, since all the insurers have been directed to have the same coverage and exclusions, it will be simpler for the customer to understand. It’s no doubt a prudent move for Health insurance policy to take care of basic health needs of insuring public and uniformity of coverage as offered-

  1. To have a standard product with common policy wordings across the industry.
  2. To facilitate seamless portability among insurers.

The health insurance plan will have the basic mandatory covers as specified which will be uniform across the health insurance sector. The following health insurance plan will be offered on indemnity basis, as a standalone product. It will not be combined with defined benefit-based insurance covers such as critical illness covers.

The most important issues to notice – about this health insurance plan, as per IRDAI notification:

  1. Minimum and maximum sum insured:The minimum sum insured under the health insurance plan will be Rs 1 lakh and the maximum sum insured limit should be Rs 5 lakh (in multiples of 50,000). In the case of individual health policy, the sum insured will apply to each individual family member and in the case of the floater health insurance plan; the sum insured will apply to the entire family.
  2. Eligibility:Minimum entry age is 18 years and the maximum age at entry is 65. However, there is no exit age. The policy is subject to lifelong renewability. A proposer with higher age can obtain a policy for the family without covering one’s self. The policy can be availed for self and the following family members:
  3. Legally wedded spouse,
  4. Parents and parents-in-laws,
  5. Dependent children (i.e., natural or legally adopted) between the age of 3 months and 25 years.
  6. Modes of premium payment:All the premium payment modes are available, that is, you can pay the insurance premium either annually, half-yearly, quarterly or in monthly mode. There will be uniformity in premium pricing. Also, the premium under this health insurance plan will be pan India basis. No geographic location/ zone-based pricing are allowed.
  7. Expenses to be covered:The expenses incurred on treatment of cataract will be covered up to 25 percent of the sum insured or Rs 40,000 whichever is lower, per eye. Dental treatment & Plastic surgery necessitated due to disease or injury, all daycare treatments and expenses incurred on road whereby ambulance cost subject to a maximum of Rs 2,000 per hospitalization.
  8. Free look period: The insured will be allowed a period of at least 15 days from the date of receipt of the policy to cancel the policy if not acceptable.
  9. Co-pay:Fixed co-pay of 5 percent on all claims will be applicable across all the ages.
  10. Cumulative bonus, grace period, pre & post-hospitalization – all remains unchanged.
  11. Specific waiting period for certain disease:According to the guidelines issued in IRDAI circular:
    A. Disease which will have a waiting period of 24 months – Benign ENT disorders, Benign prostate hypertrophy, Cataract and age-related eye ailments, Gastric/ Duodenal Ulcer, Calculi in the urinary system, Gall Bladder and Bile duct(excluding malignancy), Varicose Veins and Varicose Ulcers and Internal Congenital Anomalies.etc.
  12. Disease which will have a waiting period of 48 months Treatment for joint replacement unless arising from an accident and age-related Osteoarthritis & Osteoporosis, as per the guidelines issued in the circular.
    Apart from the factors mentioned above, the health insurance policy also includes expense incurred on hospitalisation under AYUSH treatment; any medical expenses incurred for inpatient care treatment under Ayurveda, Yoga and Naturopathy, Unani, Siddha and Homeopathy systems of medicines are covered up to sum insured, are reimbursed.

,This step taken by IRDAI, is absolutely a good move to provide uniformity of service by all insurers and ease the process of Portability of the insured’s policy if he/she has a complaint in the service provided by the earlier insurer and will no doubt give some justice to the insured.

Health Insurance related to Coronavirus:

The novel COVID-19 Coronavirus disease has affected lakhs of people worldwide. The contagious disease, caused by a family of viruses, results in acute respiratory illnesses including pneumonia, impaired kidney and lung functions, and even multi-organ failure. In a situation when there are uncertainty and possible health risks, having coronavirus insurance in the form of a protective cover is essential. It helps one to deal with any medical emergency with hopes of leading a worry-free life ahead. Coronavirus health insurance helps insured to access quality medical care and offers coverage for hospitalization based treatment for coronavirus disease.

Importance of Coronavirus Insurance:

With the outbreak of the Coronavirus disease (COVID-19), the world has been witnessing unprecedented events. It has confined people to their homes and impacted business operations, thus affecting the world economy.In times when financial problems are likely to occur, having to deal with a medical emergency without any safety cushion can be challenging. Staying prepared through prior planning is a sensible idea to keep worries at bay. So, people need to choose coronavirus health insurance and also ensure the well-being of their loved ones.

As the contagious coronavirus (COVID-19) disease has spread to various parts of the world, it has alarmed people and affected their normal lives. The sick and elderly, in particular, are being urged to avoid going to crowded places.Despite the growing fears due to this pandemic, it is important to stay calm and take steps to avoid health risks by keeping oneself protected by following hygienic habits. Talking about financial protection, many people are eager to know if their health insurance plans would cover them in case of treatment resulting from Coronavirus disease. Experts say that if a person already has an existing health insurance policy, then treatment cover for Coronavirus disease will be included. However, if a person opts for a policy after contracting the disease, in such cases, he or she will not be entitled to get coverage for the treatment.For those who already have an existing health cover, they must have a clear understanding of the type of expenses their policy would cover, the sum insured they need and much more.

While most health insurance policies in India claim to be providing cover for the coronavirus infection, there are various criteria under which policyholders are also denied a claim for its treatment. To help to tackle the outbreak, many insurance companies have come up with insurance products that will cover an individual against the coronavirus disease (COVID-19).With a high rate of detection of the virus in India, the country is heading towards a nationwide panic.While most health insurance policies in India claim to be providing cover for the coronavirus infection, there are various criteria under which policyholders are also denied a claim for its treatment. Also, the policyholders’ claim will be limited by the maximum sum insured under their health insurance policies. To help to tackle the outbreak, many insurance companies have come up with insurance products that will cover an individual against the coronavirus disease (COVID-19).

The Coronavirus spreads through the droplets when an infected person coughs or sneezes; through direct contact with an infected person; or by touching infected surfaces. People above the age of 60 years as well as those having a weakened immune system and pre-existing medical conditions such as cardiovascular disease, diabetes, high blood pressure, chronic respiratory ailments or cancer are more prone to Coronavirus. Hence, these vulnerable groups must be safeguarded and they must take suitable measures to avoid contact with infected persons.

Coronavirus is a family of viruses that causes acute respiratory illnesses due to infection in the nose, sinuses or upper throat. It spreads through the air droplets when an infected person coughs or sneezes. It also spreads through direct contact or by touching infected surfaces. Coronavirus Symptoms may be categorized as Mild, Moderate and Severe. Mild symptoms of Coronavirus disease include dry cough, sneezing, sore throat, and fever. In addition to cough, moderate symptoms also include high fever and chills, shortness of breath, headache, body ache and dizziness. In severe cases, the symptoms include confusion, pressure in the chest, pneumonia, bronchitis, gastrointestinal problems and impaired kidney and lung functions. The virus gets transferred through the air droplets when an infected person coughs or sneezes; by direct contact with infected persons; or by touching infected surfaces. Thus, by practicing self-isolation and following social distancing norms, the chances of getting infected from the virus significantly reduce.

Sum insured: COVID-19 is a serious disease. People with a weak immune system and elderly are at greater risk. The treatment is mainly focused on providing relief to the patients from symptoms they are showing and efforts to prevent any organ damage. Having a family health cover with a high sum insured is recommended for anyone, especially when healthcare costs are expensive.

Waiting Period: Usually, medical insurance policies come with an initial waiting period of 30 days. This implies that for getting cover for any treatment, except for emergencies like accidents, the policyholder must wait for 30 days.

Coverage: Coronavirus health insurance plans provide a range of medical costs including in-patient hospitalization, pre-hospitalization care – usually from 60 days prior to getting hospitalized, post-hospitalization care – usually for a period of 30 days, ambulance, OPD and ICU charges, etc.

Treatment for COVID-19 requires expensive medical care. The focus of every individual should be to avoid the risk factors of this disease. Keeping the immune system strong and taking precautions like washing hands regularly, using face masks, covering a cough or sneeze with using disposable tissues, etc. are some healthy practices that must be followed.

In addition, having the support of coronavirus insurance is always recommended. Coronavirus health insurance provides coverage for medical expenses due to various illnesses including COVID-19. Getting affected by Coronavirus is considered as a medical emergency. Thus, a person can get cover for the treatment and make a claim on his/her coronavirus health insurance in any of the two ways as discussed below:

Cashless treatment: By applying for a claim under cashless health insurance if the treatment is availed in any of the network hospitals of the insurer. This is beneficial as the policyholder is not required to make any payment; instead, the insurer is responsible for settling the expenses directly with the hospital.

Reimbursement: By filing for reimbursement of expenses. In this case, the policyholder has to first bear the burden of paying hospital bills from his/her own pocket. He or she can later submit the necessary documents like reports, bills, etc. to get the expenses reimbursed.

Both cashless and reimbursement facilities are applicable for coronavirus health insurance. Cashless facility is available only at empanelled network hospitals but Homecare or related treatment expenses are not covered under in-patient hospitalization benefit.

Anyone can avail health insurance for coronavirus through online mode conveniently which involves a few simple steps. Visit the official website of Health Insurance Companies, choose the health plan and proceed to pay the premium digitally. The coronavirus health insurance offers coverage for hospitalization based expenses due to treatment for the coronavirus diseases. Coronavirus insurance includes coverage for in-patient care, ICU Charges and quarantine period at a registered facility. As per the guidelines of IRDAI, those health insurance policies which offer hospitalization cover will also offer cover for medical expenses related to coronavirus. The expenses will be settled on the basis of the terms and conditions of the policy. The Coronavirus health insurance policy aims to provide complete coverage for the medical expenses arising due to the treatment of Coronavirus disease. With a financial back-up in the form of Coronavirus health insurance, individuals can rest assured of getting quality medical care at any healthcare facility in India.

Insured can claim coronavirus insurance claim provided the facility where Quarantine is conducted is recognized and it’s been carried outpost a registered medical practitioner. Coronavirus health insurance plan will not provide cover if the insured is under Quarantine at home or has undergone quarantine at any non-recognized facility (for treating Coronavirus case). Also, it is recommended to read the terms and conditions of the insurance policy to understand the exclusions which are scenarios where the insured person cannot raise a coronavirus insurance claim.

A policyholder cannot get coronavirus insurance cover if he/she raises a claim for treatment of coronavirus disease within the waiting period of the health insurance policy in case the treatment cover is excluded within the waiting period. Insurance companies started offering exclusive pandemic policies; partnering with online payment firms.

Most of the insurance companies, which are offering the specific polices, are not asking their potential customers to go for medical checkup, but making sure that they do not have corona-virus-like symptoms, an industry expert said.

Some of the insurers are also offering products to cover expenses, including treatment during quarantine period, he said, adding that terms of claim settlement by these companies vary and a proposer must read the proposal form, prospectus like documents carefully before purchasing the insurance policy. However, many industry experts “don’t see much value” in buying separate policies to protect from this disease for people who are covered under general health insurance plans. During the dengue outbreak, several insurance companies came up with policies to protect from the vector-borne diseases, they said, adding that there are many existing health insurance plans in the market, which provide protection from the COVID-19 disease.

The Insurance Regulatory Development Authority of India has already asked health insurance companies to offer medical coverage for corona virus infection in the country, an official said. The Life Insurance Council also said the clause of ‘force majeure’ will not apply in case of COVID-19 death claims, he said. The regulator has also instructed insurance companies to design specific health policies covering the treatment cost of COVID-19, including medical expenses incurred during the quarantine period, and some have already introduced the same.Life Insurance Policy holders & their nominees must check & know whether the deaths due to corona virus are covered by life insurance policies taken by them.

The World Health Organization (WHO) has declared the COVID-19 or corona virus as pandemic. It is predicted that Covid-19 will be here for 100 years and it will change our lives.  It is reasonable to assume that a global health crisis like this corona virus would have some brunt on the life insurance policy acceptance and increase in premium (in deed the hike is effective from April, 2020). The virus has spread to all corners of the world, even in India. In India, the virus infected more than 1 lakh people till now according to the Ministry of Health and Family Welfare. So, now the question rises, will a life insurance policy cover the death of a policyholder due to corona virus? Also, will the insured be able to get a life insurance policy after contracting the virus? If the individual who passes away due to the corona virus had a life insurance policy, the nominee of the policy holder will get the sum assured as the death benefit. If the deceased person had a life insurance policy, then the nominee or the beneficiary nominee must know that the death caused by health-related such issues are generally covered under a life insurance policy including term insurance. This means that when the insured person dies, the death benefit is paid to the nominee or the beneficiary nominee after a valid life insurance claim is filed. Death benefit is the agreed amount of money (sum assured) payable by the insurer upon the death of the insured person to the nominee or the beneficiary. At the time of buying the policy, the policyholder lists out the name/s of that nominee/s who will receive the death benefit in case the insured person dies. Nominees must check vividly the sum assured in the policy document and specific policy coverage.

This new corona virus policy provides a lump sum benefit to the person who is hospitalized and diagnosed with the virus. The entire sum assured is paid irrespective of the hospitalization. The existing medical policy also covers the hospitalization, as directed by the insurance regulator, where the amount will be paid based on the hospitalization expenses. But the idea of a corona virus-specific policy is to cover those who don’t have any medical insurance. In fact, majority of Indian population is without a medical policy. The premium rates offered by the companies for corona virus-specific policy are affordable. In partnership with Bajaj Allianz General Insurance, digital payment service provider PhonePe, operated by Flipkart Online Services, also launched a corona virus hospitalization insurance policy called “Corona Care”, another official said. The policy is priced at Rs 156 with an insurance cover of Rs 50,000 for a person aged less than 55 years, and the cover is applicable at any hospital offering corona virus treatment, he said. Star Health Insurance and Edelweiss General Insurance are among others which have also come up with exclusive insurance policies for COVID-19.Bharti AXA General Insurance has tied up with Airtel through payments Bank to launch two health insurance plans – one offering a lump sum amount of Rs 25,000 and another with daily benefit starting Rs 500 per day-to provide protection from COVID-19. ICICI Lombard has priced its COVID-19 policy at an attractive premium of Rs 149 for a sum assured of Rs 25,000 including value added benefits such as tele consultation and ambulance assistance etc. The corona virus policy is a need-based cover available for a limited period of one year. To be fair to the general insurance industry, the COVID-19 policy should be sold when there is no pandemic. The very concept of insurance is that you buy it for covering future risk whether death, medical emergency or fire. “It is a huge risk that we are taking in our books. In a pandemic like corona virus, you cannot model things like total estimated cases, spread and re-occurrence etc.” -says an executive of a reputed insurer. The temporary nature of the product is based on the individual strength of the company’s balance sheet, the likely losses and the risk-taking ability of the insurers.

Taking notice of the disease outbreak, Insurance Regulatory and Development Authority of India (IRDAI) recently advised insurance companies to ensure that the affected patients be expeditiously handled and to design products covering the treatment cost for corona virus. “Corona virus cases will be covered in almost 90 per cent of the indemnity-based health insurances in India and does not require a new product on an urgent basis,” said a health insurance firm executive on condition of anonymity. Corona viruses (CoV) are a large family of viruses that cause illness ranging from the common cold to more severe diseases such as Middle East Respiratory Syndrome (MERS-CoV) and Severe Acute Respiratory Syndrome (SARS-CoV), stated the WHO. According to insurance companies, COVID-19 outbreak has created panic and fear globally and in India.

People have been inquiring about whether their health insurance policy provides coverage for the infectious disease and about COVID-19 specific insurance cover. Seeing the rapid spread and anxiety among customers, many insurance firms have notified about their products providing corona virus cover on the websites and issued statements to reduce panic. We are seeing 30-40 per cent jump in enquires from customers asking about corona virus and health insurance coverage. India being a very under-penetrated market when it comes to insurance, corona virus is increasing the awareness among people on the importance of health insurances,” said Amit Chhabra, Head- Health Insurance, Policybazaar.com. The panic and fear seen in people was noticed with rising concerns on whether they are insured for corona virus. Indian health insurances are designed for care setup and not for the care which is why 24 hours hospitalization is required for claiming health insurance in almost 99 per cent of the indemnity-based health insurance policies in India. Speaking on how SBI General Insurance is prepared to deal with COVID-19 cases, Head – Market Underwriting Operation, PankajVerma, said, “Our standard health policy is capable to take care of coronavirus coverage. As of now, we are evaluating if there is any requirement for a corona specific cover. Going forward, if the need arises, we will look at bringing out a specific product to address for such diseases as appropriate. SBI General is not rejecting any claim without minimum compliance of regulatory requirements as prescribed.”

Currently, all symptomatic corona virus patients if found positive from any of the authorized centers of ICMR – National Institute of Virology, Pune, are being admitted to isolation wards for their quarantine. The positive cases of coronavirus are being treated in the hospital, so insurance firms will pay the sum insured. “All cases are covered on your health insurance product up to the sum assured. Our policy covers the entire quarantine period. Patients can visit the nearby hospital for immediate treatment, we will reimburse all expenses. In case of cashless benefits, patients are requested to visit our network hospital with the TPA card, the rest will be taken care of,” said Shanai Ghosh, CEO, Edelweiss General Insurance. In the current procedure of treatment, suspected patients have to be isolated and treated in an outpatient facility and if the symptoms are later diagnosed as COVID-19 virus- those cases will be provided pre and post hospitalization coverage in accordance to the applicable terms and conditions of policy contract and the extant regulatory framework.
Online insurance service provider, Digit is the first insurer to roll out a coronavirus insurance plan called Digit Health Care Plus filed under IRDAI’s Sandbox Regulations. Under the regulation, insurers can sell innovative products on a pilot basis for a limited period. Digit’s fixed benefit insurance product is available from February 1, 2020, to July 31, 2020, for one year only and cannot be renewed. Some of the major limitations that exist in Digit’s need-based health insurance include:

  1. Policy can be availed only if you are not suffering from any respiratory-related systems like cough, respiratory diseases, and breathlessness from the last four weeks.
  2. The policy does not cover people who have travelled or are planning to travel to countries like China, Japan, Singapore, South Korea, Thailand, Malaysia, Hong Kong, Macau, Taiwan, Italy, Iran, Kuwait and Bahrain since December 1, 2019.
  3. Also, if you contract it from a family member who has travelled to these places even then it will not be covered. Home quarantine, pre-existing respiratory conditions or already exhibiting symptoms of the diseases are also not covered under the product.

While this policy may be a quick solution for people who are not insured under any health cover policy, it dissolves the importance of health insurances which is a powerful solution in financial distress occurring because of sudden health conditions, accidents and injuries. Our attitude as larger public towards corona virus is more alarming because it is spreading very fast and there is a lot of care associated with it. People should buy health insurance not because of the alarm, but rather as a defense. A new product is not necessarily required as of now. Providing need-based health insurance leads to panic buying which may in times of need lead to poor compliance. Experts believe that people should look at insurance as a risk mitigation measure which is the right thing to do. The current focus should be on prevention of disease with the help of right information from credible websites and not be a party to spreading misleading information which triggers panic among people. Health insurance companies and councils also should actively invest in building awareness towards the prevention of diseases.

IRDAI issued guidelines on handling of claims:

The costs of hospitalization including the treatment during the quarantine period have to be settled by insurers as per the terms and conditions of the policy. The Coronavirus is spreading fast and several cases have been reported in India. For those holding a health insurance policy, the pertinent question that comes to mind is, whether their claims will be settled or not and will the policy cover Coronavirus? Dispelling all sorts of confusions, this is what Dr. Shreeraj Deshpande, Chief Operating Officer, Future Generali India Insurance, has to say, “Any person who is hospitalized as a result of Coronavirus and takes treatment will be covered as any other illness. The subsequent claims will be processed as per regular norms, provided the individual has been hospitalized for 24 hours. The government has issued advisories on Corona virus infection and insurance companies will be guided by that.”

Incidentally, the IRDAI has recently issued a set of guidelines to be followed by the insurance companies in settlement of claims arising under Corona virus. In the health insurance policies that cover hospitalization expenses, in order to alleviate the hardships that may be caused to the policyholders, IRDAI has stated that all claims reported under corona virus shall be handled as per the following norms.

i)Where hospitalization is covered in a product, insurers shall ensure that the cases related to Coronavirus disease (COVID-19) need to be expeditiously handled.

ii)The costs of admissible medical expenses during the course of treatment including the treatment during the quarantine period have to be settled in accordance with the applicable terms and conditions of the policy contract.

iii) All the claims reported under COVID 19 shall be thoroughly reviewed by the claims review committee before repudiating the claims.

The regulator has also asked insurers to design products covering the costs of treatment for Corona Virus similar to products introduced by them for various specific diseases including vector-borne diseases.

There is, however, a condition in most health insurance policies that exclude treatment of any pandemic disease. Till now, WHO has not declared Coronavirus as a pandemic but the risks exists. “ If Coronavirus is declared as a pandemic by WHO or Indian government, then claims may or might not be payable as such claims are excluded under many health insurance policies,” says SubramanyamBrahmajoysula, Head – Underwriting and Reinsurance, SBI General Insurance.As of now, Coronavirus is to be fully covered as it is not even considered as a pre-existing ailment. Therefore, there is no waiting period specific to such ailments.

 

Concept of HealthCare WITHIN THE AMBIT OF HEALTH INSURANCE:

Healthcare is the maintenance or improvement of health via the prevention, diagnosis, treatment, recovery, or cure of disease, illness, injury, and other physical and mental impairments in people. Healthcare is delivered by health professionals in allied health fields.

Dentistry, pharmacy, midwifery, nursing, medicine, optometry, audiology, psychology, occupational therapy, physical therapy, athletic training and other health professions are all part of healthcare. It includes work done in providing primary care, secondary care, and tertiary care, quaternary care as well as in public health.

Sound healthcare system is a pre-requisite for the socio-economic development of a nation. The economic development of the country has witnessed a great momentum, particularly since 1990s. But unfortunately, India’s healthcare system is at crossroads. Healthcare system is really a complex one having multiple goals, different products and different beneficiaries. It has its unique ethical and moral issues. Since independence, the Government of India has been taking many initiatives for all sections of the society by way of enacting different schemes. But government spending towards health-care is not encouraging at all.

Healthcare system has become overburdened because of continuous increase in population. A large section of population is outside the ambit of health insurance. The rising cost of medicines and treatment have further aggravated the problem. Moreover, some private insurers may prefer to serve the affluent middle-class who can afford to pay reasonably high premiums. This is a risky proposition for the overall health insurance industry as no one is ready to cover the poor. In countries like the UK or Canada, healthcare is viewed as every citizen’s right and as such, healthcare coverage is provided by the state. But in countries like the US, it is the duty of an individual to get him/her insured. US administration has made it mandatory to have some sort of health insurance for all citizens and there are penal provisions for the defaulters. But in India – no such involvement by state – what a pity? Here, majority are without insurance.

Proper balance between privatization and development of health insurance is of utmost importance because it will ensure smooth functioning of the system. Even the insured are sometimes denied of health insurance benefits on trivial reasons. IRDAI has been trying hard to create a favourable environment for all the stakeholders associated with health insurance. Public awareness and active involvement of all concerned are the need of the hour.

The constitution of India, Article 41, deals with the fact that the nation has to provide means within its economic capabilities in such a way that every citizen can find assistance for a happy life with regards to old age, illness, disability etc. The only health insurance has power and ability to lessen the intensity of any types of financial burden that occur due to any kind of emergency hospitalization. Access to healthcare may vary across communities, and individuals, influenced by social and economic conditions as well as health policies. Providing healthcare services means “the timely use of personal health services to achieve the best possible health outcomes”. Factors to consider in terms of healthcare access include financial limitations (such as insurance coverage), geographic barriers (such as additional transportation costs, possibility to take paid time off of work to use such services), and personal limitations (lack of ability to communicate with healthcare providers, poor health literacy, low income). Limitations to healthcare services affect negatively the use of medical services, the efficacy of treatments, and overall outcome (well-being, mortality rates).

According to the WHO, a well-functioning healthcare system requires a financing mechanism, a well-trained and adequately paid workforce, reliable information on which to base decisions and policies, and well maintained health facilities to deliver quality medicines and technologies.

An efficient healthcare system can contribute to a significant part of country’s economy, development and industrialization. Healthcare is conventionally regarded as an important determinant in promoting the general physical/mental health and well-being of people.

Healthcare is nothing but a set of services provided by various agencies and providers including the government, to promote, maintain, monitor or restore health of people. Healthcare to be effective must be:

  1. Appropriate to the needs of the people;
  2. Comprehensive;
  3. Adequate;
  4. Easily available;

Health status of an individual varies from person to person. It is neither possible nor essential to make the infrastructure available at same level for all types of health tribulations. The healthcare facilities ought to be based upon the probability of the incidence of disease for the populace. For example, a person may get fever, cold, cough, skin allergies etc. many times a year, but the probability of him/her suffering from Hepatitis B is less as compared to cold and cough. The probability of the same person suffering from a critical illness such as heart disease or Cancer is less as compared to Hepatitis B. Hence, the need to set up the healthcare facilities in any area whether in village/district/state will be based upon the various health care factors called indicators of that area such as:

  1. Extent of population;
  2. Mortality rate;
  3. Morbidity rate;
  4. Disability rate;
  5. Social and mental health of the people;
  6. General nutritional / dietetic status of the people;
  7. Environmental factors such as if it is a mining area or an industrial area;
  8. Social factor whether insular or cosmopolitan area;
  9. The possible health care provider system e.g. heart doctors may not be readily available in a rural community but may be in a district township;
  10. How much of the health care system is likely to be used;
  11. Socio-economic factors such as affordability.

WHILE SUMMING UP:

Long-term care benefits are too expensive and their projected future cost too difficult to predict. A strategy of long-term-care is required that makes it possible for the elderly to obtain care without first becoming destitute. Overall, the challenge of long-term-care is to develop a viable financing structure that is within a meaningful community context and consistent with efforts to sustain voluntary long-term-care efforts. Persistent and seemingly intractable increases in health expenditures have led to dramatic changes in the health-care environment. The country should increase its gross national product (GNP) on health-care – as there is no significant increase for the last one decade.

The healthcare industry is facing many changes that pose new challenges to healthcare organizations. In particular, the fast-evolving government instructions, new regulations, technological innovations, and patient expectations create a new environment in which running a medical insurance practice isn’t just about dealing patients anymore.

Health insurance continues to be an evasive commodity to a large part of the population. The topic of providing insurance for the all-important purpose of health safeguarding and disease prevention hasn’t even been proposed in the conscience of the general public. The combination of minimal access to and inadequate protection provided by most healthcare plans has resulted in people having to bear heavy medical expenses out of their pockets, thus affecting the quality of life on a huge scale. Couple this with a serious dearth of awareness about the benefits of health insurance; many people in India don’t consider healthcare plans a worthwhile investment. However, one can barely blame these individuals in that respect. Because on the few occasions that there is talk of health-related policies, it is primarily focused on family welfare or diseases like corona, polio, tuberculosis, and HIV.

According to a ex-official of planning commission, more attention is paid by political / legislative body to sectors like defense, agriculture and commerce, letting health-care descend too small on the list of priorities. Inevitably, the poorer public receive primary and hospital-care that is of an deplorable quality, which, given the increasing burden of corona & other chronic diseases in the country, making health insurance & care all the more essential. In order for health insurance plans to become family circle products in India, we have to insist changes on a structural echelon. Increasing knowledge on the subject as well as the accountability among providers, insurers and governance systems is the first step towards ensuring low-cost, high-feature, and impartial health-care for all. There’s also an urgent need to regulate healthcare spending and make sure the corona & other chronic diseases ailing the country’s community are not left unattended. At a personal level, buying health insurance as precedence for all introducing segment-wise products will provide more people with medical security and ultimately reduce their monetary anxiety, thus empowering the citizenry to hold their legislative body accountable for the status of medical insurance &health-care in the country.

The aspect of evidence of moral hazard in insurance parlance has not been addressed adequately. “Fraud management” is grey area and TPAs or insurers have not been very successful in detecting and preventing healthcare frauds. Insurers must be careful about the fraudulent activities at the backdrop of Coronavirus disequilibrium. The lack of objective measures in treatment protocols and standard treatment guidelines are the causes of the healthcare provider related frauds being inflicted on the insurer community. Three parties may be associated with commission of Health insurance frauds: (a) Service providers which include doctors, hospitals, ambulance companies and laboratories, (b) Insurance companies and intermediaries like TPAs, and (c) Customers. Service providers’ fraud include for:-

  1. Billing for services which are not actually performed.
  2. Carrying on unnecessary diagnostic and other tests by way of falsification of medical history of the patient.
  3. Providing unnecessary services to attract more money from the insurers.
  4. Billing more costly services than the one actually performed.

Commitment of fraud by insurance companies or intermediaries may be due to –

  1. Involvement of employees in creating false claims.
  2. Illegal gratification from the healthcare service providers.

Customers may also be involved in healthcare fraud in some ways like –

  1. Filing claims for such medical services which are not actually received by him/her.
  2. Falsification of records for illegally obtaining insurance benefits.

Minimizing moral & morale hazards, frauds, hassle-free and quick settlement of claims, and employing specialists for claims management will increase the transparency of health insurance which will increase the confidence of the customers on the entire system. Special plans should be designed for the poor and disadvantaged people. Ill-health and cost associated with such ill-health are one of the major causes of rural indebtedness in India. NGOs need to be involved in a greater emphasis in order to bring the remote villagers within the ambit of health insurance.

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