Health Insurance Premiums Hiked By Upto 20%; Big Change In Pre-Existing Diseases Clause
Why Would This Happen?
Reportedly, the Insurance Regulatory and Development Authority of India (Irdai) has introduced a lot of changes to health insurance products in the last year in the hopes of making it more ‘customer-centric’.
Further, the insurance companies will have to follow these guidelines and implement the changes in products with effect from October as the insurance regulator made it mandatory.
They have also made an effort to standardize the exclusions as Irdai asked the insurer to remove ambiguities in the diseases or medical conditions that are not covered under a policy.
Changes In Health Policy
According to these conditions, any disease or ailment that is diagnosed by a physician 48 months prior to the issuance of the health cover will be classified as pre-existing diseases.
In addition to that, any condition whose symptoms have resulted within three months of the policy issuance will also be classified under pre-existing diseases.
Apart from these, now the treatment for mental illness and stress will also be covered under health insurance policies.
Cost For Health Insurance
According to the chief underwriter, Universal Sompo General Insurance Company, Nirmal Bhattacharya, “Insurers are using this time to revamp their offerings by adding new features and standardizing products, according to IRDAI’s guidelines. They will launch the revamped products at a higher price. The rise in premiums could be in the range of 5-20%,”.
Further, he added, “Removal of ambiguity in exclusions and inclusion of modern treatment methods such as oral chemotherapy, balloon sinuplasty, deep brain stimulation will widen the scope of health insurance. Treatment for mental illness, stress or psychological and neurodegenerative disorders have also been brought under the purview of health insurance. This inclusion would have pricing impact on the basis of the increment in the procedure expenses,”.
How Does This Help?
Bhattacharya said that the standardization of health insurance products aims to help the customer.
“Due to the availability of multiple health insurance products in the Indian insurance market, people are often confused about which one to take because they don’t have time or energy to go through bulky policy documents. Standardization of health insurance will help to know about the product and claim settlement process merely through word of mouth”, he said while talking about the benefits.
In terms of applicability, these standardized clauses should be incorporated in the new policies filed by insurers on or after October 1, 2020, and also be applicable for existing products due for renewal from April 1, 2021.
“You must know that by paying an extra premium, health insurance products will become more inclusive, less complicated and more attractive for customers,” Bhattacharya said while answering the query on why consumers should pay the extra premiums.
Additionally, the regulator has advised the insurers to provide more customer-friendly claim deductions to policyholders.
Irdai has also asked insurance companies to ensure coverage for telemedicine in the wake of the coronavirus outbreak.
While it all seems rational, still the question arises as to why consumers would want to pay an extra premium for the simplification of the documents as it is their right to get a standardized document in the first place.