Health insurance to cost up to 25% more, cover more diseases

KEY HIGHLIGHTS

• Soon all health policies will have similar inclusions, exclusions and policy wording

• Some insurers have already introduced some of the features

• IRDA has specified September 30 deadline to implement all changes and additions

• Once implemented, premium on health cover may rise in the range of 5-15%

At a time when the world is facing its biggest medical challenge due to coronavirus, health insurance policies in India are poised for an overhaul that will make them more customer friendly. However, it will not come without a cost. Many people, who didn't have a health insurance policy, have realised its need during the current coronavirus pandemic and may be planning to buy one. Whether you are an existing policyholder or planning to a buy a policy now, it is imperative to know how these changes will affect you.

Buying a health insurance cover is complex, not only in terms of deciphering policy inclusions and exclusions but also because one has to shell out entire premium in one go. Thankfully, IRDA has taken cognisance 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. September 30 is the deadline to implement all changes.

While the move is indeed in the favour of customers, one obvious 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 per cent. "Religare, which revised the pricing in January, was the first insurer to implement these changes," says Amit Chhabra, head-health insurance, Policybazaar.com, who believes the price hike could go as high as 25 per cent.

"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, lot of companies may hike the premium only by 5 per cent, but some may also go for 20-25 per cent," he says.

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

"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," says Rashmi Nandargi, Head - Retail Health, PA and Travel Underwriting, Bajaj Allianz General Insurance.

What changes are expected

The scope of pre-existing diseases has been widened. "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," says Chhabra of Policybazaar.com.

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.

Also, 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 behaviour and neurodevelopment 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, says Chhabra. However, the insurer must specify a waiting period of 30 days to one year after which the coverage should begin, he adds.

Twelve modern treatment methods such as immunotherapy, oral chemotherapy and robotic surgeries will also be covered under new policies. Nandargi of Bajaj Allianz says policyholders will also have flexibility in paying the instalments. "Customers will be given options to pay premium on monthly, quarterly, half-yearly or yearly basis," she says.

Interestingly, IRDA has also mandated a moratorium period of eight years. It means if your policy has completed eight years and at the time of claim, 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 premium for such a long time."

Although most consumables during treatment period such as gloves, injections, clothes given to patient, food given to attendant are not covered under the health policy, there is no uniformity as to which ones will be included or excluded. "Now 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," says Chhabra.  

Should you buy a health plan now or wait?

If you can afford it is always wise to buy a health cover now than later, especially at a time when the cases of coronavirus are fast rising. However, you also need to remember that a new policy will have a cooling period typically of 30 days during which only accidental cases are covered. If you are buying a policy that is yet to include these changes then you will only have to wait for few months. Once your 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 higher premium on your health insurance after these changes are implemented.

Also read: Coronavirus impact: Should you pay your EMIs or not?