Covid-19 health insurance claims are rapidly increasing in the country. With no standardised hospital pricing and reports of huge hospital bills, insurers are finding it difficult to pay out claims in full. This could mean difficulties in claim processing and future increase in the already-high premiums. What should policyholders do?
The cost of treatment in private hospitals for all treatments has gone up by 10-25% because of additional sanitization and PPE equipment costs. This alone is enough for future health insurance premiums to shoot up in future.
Since the lockdown, optional surgeries and OPD cases have gone down. Medical tourism has all but vanished further affecting profits. The hospitals will have to compensate and in addition to higher costs and premiums, the friction associated with claim settlement would increase too.
Livemint reports only 920 out of 1520 covid-19 claims were settled as on 11th May. Only 12.5 crores out of 28.9 crores were paid out. The amount paid out has shot up by about 114 times since March 28th 2020.
Insurers are concerned about over-billing on all aspects of covid treatment and this implies they would be cautious while approving cashless claim amounts and reimbursement claims can be a logistic nightmare for patients and their families at a time when the strain on the hospitals is increasing each day.
IRDAI has mandated prompt settlement of covid-19 clams but it only means a fast response, not a fast positive response as the above numbers indicate. The lack of standard cost framework is the main issue in claim settlement issues.
What should policyholders do?
- Expect higher costs and increased friction while using cashless or reimbursement mode for all treatments.
- Expect higher premiums on the next renewal and prepare for it right away
- We may soon enter a situation where asymptomatic covid positive cases may be asked to quarantine themselves at home (now they are held in a non-medical facility). This would be a much better deal than hospitalization for everyone especially the healthcare personnel.
- Increase your emergency fund – have at least a few lakhs of cash in hand (if possible obviously). Just in case …
- Until both hospitals and insurers settle down to the “new normal” it will be a bumpy road ahead for policyholders and after that a lot more expensive.