Sunday, 23 January, 2022
HomeHealthThere's a rush for Covid medical insurance but the cover comes with...

There’s a rush for Covid medical insurance but the cover comes with a catch

Most insurance companies are disallowing claims related to ‘consumables’ or overhead costs charged by hospitals for PPE kits, sanitisation and sterilisation.

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New Delhi: Insurance sales are zooming with many individuals and businesses looking to buy tailor-made insurance policies to combat the Covid-19 pandemic.

Insurance companies are bringing in specific policies to cover hospitalisation and treatment charges, on account of hospitalisation due to the novel coronavirus, or even home care.

However, while claims for overhead charges like personal protective equipment (PPE) kit costs are being approved by a few insurers, other charges that some hospitals levy, like those for sanitisation and sterilisation, plus items like sanitisers and gloves, are being rejected.

Also read: Delhi Sikh Gurudwara Management Committee to give insurance to staff providing Covid relief

Different kinds of policies tailored for Covid

To be sure, existing mediclaim policies would have covered Covid-19 hospitalisation charges, but insurance companies have brought in specific products to cater to those who want to pay a smaller premium and opt for a policy that only covers the pandemic.

While many individuals are purchasing policies to cover their entire families, businesses are also looking to buy group health insurance covers for their employees.

“The existing medical policies cover Covid-19. However, there are many customers who do not have an insurance policy and are opting to buy a medical insurance product with coverage only for Covid-19, rather than buying a comprehensive product that covers all kinds of illnesses,” said Sanjay Datta, chief underwriting and claims officer at ICICI Lombard General Insurance, one of the largest private insurance companies in India.

Datta explained that the costs are substantially lower for a Covid-19 policy. “It is priced anywhere between one-sixth to one-third of the price of a comprehensive policy,” he said.

“The Covid-19 policy does not exclude co-morbidities. There are two kinds of products that are being offered — in one, there is a definite lump sum pay-out in case the policy holder tests positive for the coronavirus, while the other is based on a reimbursement model where the cost of the medical treatment is paid,” Datta explained.

ICICI Lombard, for example, introduced a Covid-19 protection cover under its group health insurance policies. Besides this, it also introduced new features in its existing group health insurance policy, like reduced waiting period and inclusion of home healthcare, to make it more relevant for dealing with Covid-19 claims.

Awareness about insurance and non-payment of claims

Deepak Yohannan, founder of MyInsuranceClub, an insurance web aggregator, said awareness levels about the need for insurance have shot up due to the pandemic, and a few insurance companies have also launched specific policies to cover only Covid-19.

“While the big corporates already provide a group health insurance cover to their employees, smaller companies are also now looking to provide health insurance coverage. We are advising clients to opt for the comprehensive health insurance coverage rather than a stand-alone Covid-19 insurance coverage, as the difference in premiums for both is not very high,” he said.

On the ground, however, insurance coverage remains low, with those going to hospitals for Covid-19 mainly opting to pay in cash, reflecting the low levels of insurance penetration in India.

The rest, who have insurance, are struggling to get their insurers to pay up. They are also often clueless about what their policy covers or excludes.

ThePrint spoke to families whose members have been admitted to private hospitals in Delhi, including Max Hospital, Saket, and Sir Ganga Ram Hospital, Rajinder Nagar.

Parvinder Singh, whose father Hoshiyar Singh has been admitted at the Ganga Ram Hospital for over a month, has a policy from the Oriental Insurance Company. But the insurance provider is not taking calls.

Since his father was admitted for Covid-19 treatment in May, Parvinder says his family has “incurred a bill of over 10 lakh”.

Meanwhile, at Max Saket, Karan Sahgal who was getting his brother-in-law’s father discharged, said: “We don’t even have insurance. We have paid the bill of Rs 1.8 lakh by card.”

Also read: Not enough PPE, no insurance — how India’s police is fighting Covid battle unarmed

PPE and other overhead expenses

Even those with an insurance policy have had to shell out money from their pockets, as many of the overhead charges, or what is called “consumables”, are not covered by insurance companies.

The family of Shubham Gupta, whose 45-year-old uncle Rajesh Gupta was admitted in Max Saket, had to pay 50 per cent of the 10-day hospitalisation bill of Rs 2 lakh from his own pocket.

“Our insurance covered Rs 1 lakh of our Rs 2 lakh bill. We had to pay the rest in cash, for the consumables. I have a Rs 3 lakh insurance cover and pay a premium of Rs 20,000 every year,” he said.

Sameer Singh, an entrepreneur who is now recovering from Covid-19, was first admitted to Cygnus Orthocare Hospital, but later transferred to Batra Hospital after the former caught fire. Singh said his insurance company, ICICI Lombard, covered Rs 3.16 lakh of the total Rs 4.60 lakh bill across the two hospitals, but added that the consumables clause was problematic.

“I was charged Rs 48,000 for PPEs of the total Rs 93,000 bill at Cygnus Hospital, where I only spent one and a half days, whereas Batra Hospital charged Rs 88,000 for PPEs for 12 days. IRDAI (the insurance regulator) should step in and ensure consumables like PPEs are also covered,” he said.

A Delhi-based lawyer who is also recovering from Covid-19 but did not wish to be named said while his insurance covered most of his bill, consumables like PPEs were not included.

“I incurred a bill of Rs 89,000 for nine days at the Institute of Liver and Biliary Sciences,” he said, adding that the insurance company — state-owned National Insurance — approved the reimbursement of Rs 74,000, but left out the consumables cost, which included PPE kits.

Companies’ defence on overhead charges

Insurance companies, however, point out that while hospitals may use one PPE kit for the treatment of multiple patients, the entire cost is billed to one patient without apportioning the costs across patients.

ICICI Lombard’s Datta said the costs of the PPE kits are also being paid for under the company’s policy but only after ensuring that they were used in treatment of only the policy holder.

“However, if the hospital is adding items not directly related to the treatment of the policy-holder to the bill, that is being deemed as non-payable. Sterilisation and sanitisation and other such charges have always been a part of the hospital’s responsibility, and were subsumed in room charges even prior to Covid-19,” he said.

Also read: As tropical storms become common, Covid-19 is changing how insurance claims are handled


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  1. Awareness about insurance is really a must in this time of pandemic. This article explains it all. Good write up!

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