To reduce risks, insurers earlier had a list of exclusions in health insurance. “We are now making the product more liberal. Instead of putting restrictions in policies, we are engaging with healthcare providers for tariffs, discounts, rate agreements and so on," said Rajagopal Rudraraju, senior vice-president and product head, health and health claims, Tata AIG General Insurance Co. Ltd.
Rudraraju said insurers added more exclusions and complex conditions due to higher claims ratio and because insurers couldn’t control healthcare cost. “It was easier to put restrictions on products. So, there were co-pay, room rent restrictions, proportionate deductions. Now exclusions are standardized, and covers are wider," he said.
Until recently, insurers were more liberal with group policies. They came without any waiting period, gave maternity benefit, included senior parents, and so on.
According to the panelists, now retail policies pay better than corporate plans. That’s because corporates want to control the payout and many are asking employees to bear part of the premium. Out-of-pocket expenses for the insured in corporate policies is also higher. For instance, while a group policy may give maternity benefit, but put a limit of ₹50,000 on it.
Retail covers are also better than government schemes such as Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (PMJAY). “Retail health insurance comes with lifetime renewability. PMJAY depends on the government’s funding, which can change," said Sanjay Datta, chief, underwriting and claims, ICICI Lombard General Insurance Co. Ltd.
From October, there’s more standardization. Some of the changes include widening the scope of coverage by including ailments such as mental illness, congenital diseases and so on. But the product is still complex. “This is due to the information asymmetry between hospitals, insurers and customers. New treatment, equipment and drugs, too, add to the level of complexity," said Bhabatosh Mishra, director, claims, underwriting and product, Max Bupa Health Insurance.
cost of healthcare
In the initial months of the pandemic, policyholders faced problems. Some hospitals were overcharging, some disallowed cashless treatment and insurers were not willing to pay for higher nursing charges and expensive consumables such as personal protective equipment (PPE) kits.
The government did try to publish a cap on rates for covid-19 treatment, but that didn’t help much. “There was confusion whether insurers will cover covid-19 or not. Irdai then came out with a clarification that insurers will cover it," said P.K. Rath, senior vice-president and business head, bancassurance, DBS Bank India.
Later, general insurers got together for the first time and negotiated standard rates for the treatment of covid-19. According to panelists, insurers would take this learning forward.
ADOPTION ON THE RISE
Given the pandemic and increasing awareness about health insurance, insurers saw more sales in the first half of FY21. According to data from General Insurance Council, an industry body, the retail segment grew by 34%, one of the highest half-yearly growth figures the industry has seen.
“While the overall health insurance penetration is low, we are witnessing people from all walks of life buying it, and many of them are first-time buyers. Even a large chunk of existing policyholders opted for a higher sum assured. Even a lot of young customers are signing up for insurance," said Himanshu Walia, joint executive director, Star Health and Allied Insurance. The demand is not just confined to the metros, he added.
Health insurance is a must-have given rising healthcare costs, so ensure you have adequate cover.