The insurance regulator, IRDAI, constantly works to ensure that products offered by insurers are customer-friendly and progressive. Keeping in line with its goals, the IRDAI issued a circular related to the existing health insurance products. This circular is great news for existing health insurance policyholders and future buyers, and will significantly overhaul the benefits provided.
The increased benefits can be summarized in three key points:a) Widening of benefits, covering more illnesses and treatments
b) Addressing the ambiguity that exists in health insurance policies, helping customers make informed choices
c) Facilitating health insurance access to a large pool of people
We will analyse each of these points in greater detail.
Inclusion of new diseases and health conditions
This is extremely beneficial for the existing customers as well as potential buyers. People can now enjoy a cover for illnesses and diseases that were previously left out from the ambit of a health insurance policy. This increase in the scope of the coverage offered to policyholders for wider healthcare needs will drastically raise the value derived from a health insurance policy. Some of the major diseases that we expect to get covered include Alzheimer’s, Parkinson’s, AIDS/HIV, morbid obesity, etc. As the treatment expenses for the diseases can be quite high for an individual, their likely inclusion will be a boon for all.
However, an important point to remember here is that this would be applicable for people who suffer from such illnesses after they have purchased the policy. Insurers can decline coverage to people who suffer from such illnesses at the time of application of the health insurance.
Apart from the above-mentioned ailments, the guidelines also aim at the inclusion of advanced treatments such as robotic surgeries and stem cell therapy within the scope of the health insurance policy.
Standardization of definitions
Before the issuance of these new guidelines, every insurance company had its own definition related to the illnesses, treatments and diseases excluded by them. This made the entire process of comparing various plans offered by different insurers a herculean task and, at the same time, restricted the potential buyers from making an informed decision. Now, the regulatory body’s guideline on standardizing the definitions used will remove the confusion and ambiguity around the exclusions. This would further simplify the process of making comparisons and help improve the overall consumer confidence in health insurance.
Insurance coverage with permanent exclusions
This is another great move that will help increase the items included under a health insurance plan. Insurers were not able to offer covers to customers who suffered from the listed illnesses, since it was tricky covering such ailments after the specified waiting period of four years. People suffering from such diseases, hence, found it very difficult to get a health insurance cover. Now, such people will be able to get a health insurance cover with a permanent exclusion for their existing disease. For instance, people who suffered from epilepsy could not get health insurance coverage at all. But with the introduction of these new guidelines a person suffering from epilepsy will get health coverage, but with a permanent exclusion for epilepsy.
Probable increase in premiums:
You would have realized by now that this circular is progressive and pushes significant improvement in the benefits provided of your existing health insurance policy, as soon as it gets revised by your insurer. While this is indeed great news, please expect a corresponding hike in premiums from insurance companies.
When will this get implemented?
While any new product introduced by an insurer will have to comply with the suggested guidelines, insurers also need to align their existing products with these guidelines by October 2020. In a year from now, you will have a wider coverage in your health insurance policy.
(The writer is Director - Health, Life & Strategic Initiatives at Coverfox) Moneycontrol