Page 26 - Insurance Times December 2020

require policyholder to meet certain medical expenses out to unproven treatments are excluded in health insurance
of his pocket for in-patient medical episodes. products.

COVID-19 was declared a global pandemic by the WHO on The average cost of consumables in health insurance claims
March 11, 2020. Since then the scientific understanding of normally remain less than 10% but considering the nature
the virus, medical response to deal with its treatment at of illness and its treatment protocol the consumable cost
care centers and action taken by the Government to provide for treating COVID-19 patients was found up to 50% of total
access to health care and tests, efforts by the Regulator to cost bill. The virus is highly infectious in nature and it is
ensure relevant products providing coverage for its necessary to contain its severity by use of such consumables
treatment and by Insurers to provide financial protection which remain single use item for its treatment. Longer stay
to reduce out of pocket expenses are fast evolving. in hospital and social distancing to contain spread
significantly raises the cost of consumables.
Insurance Regulator remained pro-actively engaged with
the insurers to protect the interest of policyholders and to Further the terms and conditions of the health insurance
drive out common misconceptions about coverage in policies covered only in-patient care and some of the policies
existing policies it issued necessary instructions to insurers provide cover for domiciliary treatment. Disallowed
to clarify and notify them that pandemic claims were expenses included nebulization kit, steam inhaler and oxygen
covered in existing health insurance policies. IRDAI also cylinder outside hospital, gloves & oxygen mask.
issued guidelines to quickly settle the COVID-19 claims
against health insurance policies. However, the contractual Gap in coverage to such an extent created a situation that
liability of insurers is governed by insurance contract. even those who were having the health insurance policy
remained underinsured for substantial share of treatment
Since the existing health insurance products were not cost. Trust went missing and grievance shoot up to
designed to deal with this pandemic and the treatment maximum. Realizing the evolving needs of policyholders and
protocol was unknown, the policyholders were surprised to the gap in actual treatment expenses and indemnified
find that significant share of total care bill was not covered protection available in existing products the Regulator
in the policy contract. Apart from it the treatment costs quickly recalibrated the product design to bridge these gaps
during quarantine at home were also not admitted as liability and prescribed two standardized COVID products w.e.f July
by the insurers. This increased the share of already high out 10, 2020.
of pocket expenses much higher on customers.
Single Risk COVID-19 Health Insurance
Personal Protective Equipment (PPE Kit), gloves, Products:
sanitization, sterilization, consumables, masks, face shields In wake of pandemic the concern of policyholders was
that are unavoidable to contain the spread of the novel recognized by the Regulator and after careful analysis of
corona virus and which are frequently used in Covid treatment protocol and prognosis around COVID-19, though
treatments were considered as non-medical items in existing
policies and insured patients were not indemnified against
cost of such consumables. Insurers maintained that these
fall under disallowed expenses so were not payable as per
the terms and conditions of health insurance contracts.

Non-transparency in hospital billing pattern at the end of
hospitals was also observed when PPE and other
consumables were subsumed in room rent by some of the
providers. Capping of room rent and proportionate linking
of associated medical costs further complicated the
reimbursements in such cases. Hospitals maintained that
apportionment of PPE kit across patients was not medically
advisable as these were not used for treatment of multiple
patients.Plasma therapy cost was not considered by certain
insurers being an experimental therapy. Expenses related
The Insurance Times, December 2020