Health Insurance Will Be 25% Expensive; Mental Illness, & Other Diseases Will Be Mandatory To Cover

As the  world is facing its biggest medical crisis due to the COVId-19 pandemic, health insurance policies in India are self-assured for an overhaul that will make them more customer friendly. However, it will come at a cost. 

Read to find out more…

New And Better Changes to be Implemented in Your Health Cover!

Many people till now, who didn’t have a health insurance policy, have realised its importance and need during the current coronavirus pandemic and may be planning to buy one. 

Everyone- an existing policyholder or someone planning to buy a policy now- should know how these changes will affect you.

Buying a health insurance cover is complex, in terms of deciphering policy inclusions and exclusions and also because one has to shell out the entire premium in one go. 

However Insurance Regulatory and Development Authority (IRDA) has taken awareness of it and soon all health policies will be standardised across health insurers with similar inclusions and exclusions and uniform language in policy documents and brochures. Besides, the coverage will widen, including diseases such as mental illness, obesity, menopause, alzheimer, parkinson and even robotic surgeries. 

Insurance companies have already started the process with September 30 being the deadline to implement all changes.

What are the Expected Changes in the Health Policies?

Amit Chhabra, head-health insurance, Policybazaar.com says, “Any disease/s or ailment/s that is/are diagnosed by a physician 48 months prior to the issuance of the health cover will be classified under PED. Also, any disease/s or ailment/s for which any type of medical advice or treatment was recommended by a qualified doctor 48 months prior to the issuance of the policy will also be qualified under PED. Apart from this, any condition whose symptoms or signs have resulted within three months of the issuance of the policy will also be classified under Pre-existing Diseases.” The scope of pre-existing diseases has been widened.

Currently, not all insurers cover diseases such as alzheimer, parkinson, AIDS/HIV and morbid obesity even after the waiting period is over. Now all such health conditions and illnesses acquired after the issuance of policy will be covered under the policy.

Meanwhile, insurers cannot exclude ailments contracted due to hazardous activity, treatment of mental illness, artificial life maintenance, age-related degeneration and internal congenital diseases. Other barred exclusions include behavioral and neurodevelopmental disorders, puberty and menopause-related disorders, genetic diseases and disorders. Age-related ailments such as cataract surgery and knee-cap replacements and respiratory or skin ailments that arise due to workplace conditions will also be covered.

And if an insurer does not want to cover some specific ailments such as epilepsy, chronic kidney diseases and HIV/AIDS, it must use specific wordings as defined by the IRDA in the policy terms.. However, the insurer must specify a waiting period of 30 days to one year after which the coverage should begin, says Chhabra. Twelve modern treatment methods such as immunotherapy, oral chemotherapy and robotic surgeries will also be covered under new policies. 

Rashmi Nandargi, Head – Retail Health, PA and Travel Underwriting, Bajaj Allianz General Insurance says policyholders will also have flexibility in paying the instalments. She says, “Customers will be given options to pay premium on a monthly, quarterly, half-yearly or yearly basis.”

IRDA has also made a moratorium period of 8 years compulsory meaning if your policy has completed 8 years and at the time of claim, the insurer discovers that a material information had not been disclosed, still it cannot reject the claim. ‘It doesn’t mean that non-disclosure of key information should be promoted. It is only to protect policyholders who have consistently paid a premium for such a long time.’

Although most consumables during treatment periods such as gloves, injections, clothes given to patients, and food given to attendants are not covered under the health policy, there is no uniformity as to which ones will be included or excluded. Chhabra says,  “Now the list of consumables will be standardised so that customers don’t get surprised if the amount of non-payable consumables is deducted from the sum insured.”

What are the Downside of These Changes?

While the move favours the customers, one downside is the rise in the premium to accommodate these changes. 

Religare Health Insurance and ICICI Lombard that have already included some features have hiked the premium up to 5%. Chhabra from Policybazaar.com, who believes the price hike could go as high as 25% says,  “Religare, which revised the pricing in January, was the first insurer to implement these changes.”

He further says, “While insurers are including new features as per the IRDA guidelines, some of them are looking to comprehensively modify their products which requires bigger price hike. So, a lot of companies may hike the premium only by 5%, but some may also go for 20-25%.”

As per IRDA guidelines, a rise of 5% only requires certification, while a hike beyond 5% will involve the regular process of filing the product with the regulator and getting approval on the same.

Nandargi of Bajaj Allianz says, “We are working on the changes and evaluating the impact of the proposed changes. The product pricing will depend on previous experience, changing age demographics, changing disease demographics, age band, product benefits, upgradation of benefits and new regulations.”

Once the insurer complies with IRDA guidelines and makes changes, the new features will be passed on to existing policyholders. If you are an existing policyholder, get ready to pay a higher premium on your health insurance after these changes are implemented.

The ones looking to buy a policy should wait a few months till these changes are implemented.

However,  if you can afford to buy a health cover it is always wise to buy it now than later, especially at a time when the cases of coronavirus are fast rising. 

This move in favour of the people covering illnesses across a wide range but at a hike should encourage more people to buy them amidst the coronavirus challenge!