The COVID-19 pandemic has brought into focus the need for health insurance coverage. As hospital bills run into lakhs of rupees, and families of COVID patients find themselves in desperate situations at the time of hospital admission, insurance companies can play a major role in easing the financial burden. Four months into the pandemic, health insurance and general insurance companies in India are bringing in specific policies to cover hospitalisation and treatment charges. However, when the time comes to pay up the claims, are these companies delivering on their promises? Why are consumables, which include the PPE kits among others, not included despite the fact that they form a major chunk of a hospital's bill?
The Insurance Regulatory and Development Authority of India (IRDAI) has now allowed insurance companies providing life insurance, general insurance and health insurance to offer COVID-19 specific, short term insurance policies for a period of 3-11 months. In a circular issued on June 23, the insurance regulator made clear the guidelines for the introduction of short term health insurance policies providing coverage for COVID-19, which will remain valid till March 31, 2021.
According to experts, those who do not have health insurance coverage at all or want only an insurance policy specific to COVID-19 will benefit the most as these policies are framed with a view of helping patients in cases of emergencies caused by the novel coronavirus. The essential features of a COVID-19 policy is that the costs are substantially lower than a comprehensive policy. It does not exclude pre-existing diseases or co-morbidities. The company either reimburses for the medical treatment cost which the patient incurs or pays a lumpsum amount at the start, when a patient tests positive for the disease.
For instance, ICICI Lombard General Insurance, a private sector non-life insurance company, has introduced new benefits in its health insurance policies as measures to help customers amid COVID-19 pandemic. Waiting period on new health indemnity policies has been reduced to 15 days (from 30 days earlier) for COVID-related inpatient claims and customers can get themselves treated at home instead of having to avail hospitalisation to claim the insurance amount.
Sanjeev Mantri, executive director, ICICI Lombard GIC, said, “At ICICI Lombard, we believe in hand holding our customers in their hour of need. As the COVID-19 pandemic continues to throw new challenges, we thought it important to embellish our health insurance proposition to ensure that we effectively meet the emerging needs of our customers. The additional benefits, offered at no extra cost, should enable our policyholders to derive maximum benefit from their health insurance cover.”
However, India has always had very low levels of insurance penetration, not just in the rural areas but also in urban cities and metropolises. And this reality is now staring us in the face. As per ground reports, it has been observed that most payments for COVID patients are made by families themselves either in cash or card. More importantly, those who do have insurance coverage, complain of either not getting full reimbursements, full coverage for the treatment, and in some cases, the insurers simply refuse to pay up citing one reason or the other.
About four days back, Pearly Gupta from Mumbai shared her harrowing experience with an insurance company, when a relative, admitted in Borivali's Apex hospital, tested negative and the time came for discharge. "Even after going for a cashless treatment, the hospital took Rs 1 lakh cash from us upon admission. That apart, the insurance covered Rs 1.37 lakh out of the bill that totaled to Rs 2.59 lakh. We got a discount of Rs 9,000 and had to pay Rs 1.13 lakh. The final bill shows the largest per day cost of Rs 10,370 for consumables alone. The cost of a single PPE kit was Rs 1,600 which is way beyond the market price, and given that hospitals order in bulk it has to be much lesser. Also, despite the fact that a kit is supposed to be including the face shield, mask, goggles, we were charged separately for all three totaling to Rs 10,370 per day. Even when there were only two doctors who visited everyday and a single nurse at the corridor, why have they charged for five kits from every patient every day,” asks Gupta, feeling frustrated. Her insurer, Religare Health Insurance company did not pay for the 'consumables' which made for Rs 1.13 lakh that the family had to shell out.
One item runs common among most hospital bills which have been shared by the families of COVID patients—the cost of consumables, which include PPE kits. However, the hospitals charge these separately, and the insurance companies refuse to pay the amount. "The things which are not payable are those that are not directly related to the hospitalisation. Hospitals use certain things which ideally must be subsumed within the room charges itself. But if the hospital bills it separately and it is not related directly to the treatment of the patient then they automatically become non-payable by the insurance companies," explains Sanjay Datta, chief of underwriting, claims and reinsurance at ICICI Lombard.
From the perspective of insurance companies, the items which are not for the patient but for the hospital should not be separately billed. With the ongoing debate over who will foot the bill in the case of PPEs which are essentially protective gear used by the hospital but for the treatment of a patient, Datta says insurance companies are at their own discretion. "In the case of PPEs, there is an element of discretion applied whether it should be paid and if at all, then what is the reasonable number of PPEs that can be paid for and if the cost of each PPE has been reasonably applied by the hospital in the bill."
At Max hospital in New Delhi's Shalimar Bagh, Hemant Dawar awaits his 18-year-old nephew's discharge after having waited for more than seven hours already, at the time of writing this story. "Four days back he was admitted for a kidney stone. Now when the time came for discharge the hospital says pay up Rs 1,25,000 in cash. This, despite having an insurance cover with United Insurance company. Due to some error, the TPA has not updated the name of the patient in its records and hence, has been unable to send the data to the hospital for reimbursement of the bill, which actually amounts to Rs 85,000. But the hospital says if you must take the patient home, pay Rs 1.25 lakh. We are now caught in this crossfire between the company and the hospital," rues Dawar.
