Maharashtra insurance ombudsman has recently come up with an important order, which can prove to be a shot in the arm for 1,000 COVID patients whose claims were turned down by their health insurers because the treatment took place in home isolation, and not at a hospital.
CNBC-TV18 spoke to financial planning expert Harshvardhan Roongta of Roongta Securities and Amit Chhabra, the head of the health insurance vertical at Policybazaar, to examine the nuances of this ruling and also talk about why it's important to get home treatment covered for diseases, even beyond COVID-19.
Ombudsman ruling and home treatment coverage
Roongta said, in the case of COVID patients, if the symptoms are severe, and one was advised of hospitalisation then that person got hospitalised, underwent a particular treatment, and could claim insurance. However, for mild cases, the government had advised not to burden the infrastructure, and instead had asked to opt for home isolation and get the treatment done at home. In such cases, the expenses that were incurred were borne by that person itself.
Now, all those who had a standard mediclaim policy, where the policy covers treatment and all the cost of treatment in case one is hospitalised for a minimum of 24 hours, except barring a few ailments, which have been very categorically specified in the policy like cataract etc. However, if the person was undergoing a treatment at home or home quarantine for COVID - most insurance companies have rejected the claim, saying that home quarantine is not covered, except if the insurance was for corona coverage. So if you were a policyholder with a standard mediclaim policy, home quarantine expenses were not being paid.
In the second wave, hospital beds were not available and this was known to all even the insurance companies because it was a nationwide phenomenon.
Even if one had severe symptoms, and were denied hospitaliation and were not getting rooms and were forced to get a treatment done at home in whatever manner one could manage, said Roongta. But in such cases also the insurance company simply rejected saying that the person was not hospitalisation and so they couldn’t pay the claim.
The interesting part about this recent (July 27,2021) ombudsman order is that even in the case of home quarantine because it's a pandemic kind of situation, and the government had requested not to burden the infrastructure if one did not require hospitalisation, the insurance ombudsman has gone ahead and said all cases of being COVID positive, whether one is hospitalised or not, the claim should be payable by the insurance company and the award has been given in favour of the insured. It is a landmark judgement impacting all of us, said Roongta.
Chhabra said one cannot make a blanket statement that voting is not covered. In fact, there is something called domiciliary hospitalisation, which is a part of most health insurance policies. Domiciliary hospitalisation means that there was a requirement for hospitalisation, but the patient could not be hospitalised because of one either bed wasn’t available, which was a real scenario, specifically in wave two.
Or if there is a problem where the patient cannot be transported to a hospital, which also is a possibility. In all of those cases, if there was a requirement for hospitalisation, but the patient could not be hospitalised, then the treatment can actually happen at home, and it is covered under the health insurance policy.
So, even those are the kind of policies that people have today, or they had even before COVID, it was not specific to COVID. This was always there. It's one of the features, which people usually overlook because nobody ever thought that there would be a scenario that they wouldn't be in hospitals. But actually, in most comprehensive health insurance policies, domiciliary hospitalisation is already covered, said Chhabra.
However, there are a couple of nuances. The first thing there has to be a need for hospitalisation. What that means is simple if somebody has very minor COVID and there is no need for hospitalisation, and the person just being asked to quarantine at home so that one doesn't spread infection, then there is no need for hospitalisation, and that is not covered under the standard terms and conditions of health insurance policy, he added.
However, if oxygen levels were critical, and there was a need for hospitalisation, but one could not find a bed, in that case there had been so many claims being paid by insurance companies because there was a requirement but it wasn't available.
Therefore, domiciliary hospitalisation has always been part of most comprehensive insurance policies. And also during the pandemic time, many claims were paid out as well, which covered the cost of hospitalisation, the cost of treatment medicines, etc.
For the entire discussion, watch the accompanying video