Health insurance is a guaranteed compensation that the insurance company agrees to pay if the insured needs hospitalization due to any disease or accident. In June 2020, the Insurance Regulatory and Development Authority of India (IRDAI) issued three new guidelines to insurers offering health insurance products to make the health insurance sector more consumer-friendly. The guidelines are:
- To standardize the general terms and clauses in their indemnity-based health insurance policy contracts so that customers can understand them easily and compare them across several products.
- Ensure insurance coverage for telemedicine.
- To provide more rational and customer-friendly claim deductions.
The first set of guidelines i.e standardized clauses are to be incorporated in the new products filed by insurers on or after October 1, 2020, and for existing products that are due for renewal from April 1, 2021. This covers various important items regarding policy documentation such as material facts that are required to be disclosed by the insured at the time of policy issuance, terms and conditions to be met at the time of settlement of the claim, and other important items regarding policy renewal, migration, porting, cancellation and redressal of grievances.
The second set of instructions is based on telemedicine. Since from March 2020, the Registered Medical Practitioners in India are allowed to provide healthcare using telemedicine, insurers have been advised to allow claim settlement for telemedicine consultation wherever normal consultation with a specialist is allowed in the terms and conditions of the policy contract.
The third set of guidelines is beneficial for policy buyers who choose a higher category of hospital room than what is mentioned in their insurance policy. Let’s suppose that you have a five lakh health insurance policy with a 1% daily room rent limit of Rs 5000 per day. But you choose to occupy a room costing Rs 7,000 for your treatment, then the insurer would typically debit 40% from your total claim, including associate medical expenses such as room charges and other charges.
Apart from the above guidelines, the insurers are required to ensure that comparative deduction is not applied in respect of hospitals that do not follow differential billing or where differential billing based on the room category is not followed. Also, the insurers are not permitted to apply a comparative deduction for ICU charges.
In the case of prevailing health insurance products, the changes can be made with their renewal from April 1, 2021. For new health insurance products filed on or after October 1, all these guidelines shall be applied.
