IRDA relaxes health insurance norms

IRDA has made a few key amendments in health insurance norms. It has eased criteria for hospitals to qualify for tie-ups with insurance companies.

The new amendment allows a hospital which is registered with the local authorities under Clinical Establishments (Registration and Regulation) Act, 2010 to tie-up with insurance companies. In addition, any hospital meeting these minimum criteria will also qualify:

- at least 10 in-patients beds in towns having population of less than 10 lakh and15 in-patients beds in other places,

- maintain the daily record of patients,

- facility of qualified nursing staff facility and medical practitioner in-charge round the clock and

- fully equipped operation theatre.

Nisreen Mamaji of Moneyworks Financial Advisers says“Allowing hospitals registered with the local authority to tie-up with insurance companies will help cut down the claim settlement time and also provide cashless benefits to policyholders. Earlier, policyholders had to pay cash at the time of treatment and later submit necessary documents to settle their claims which often took 3 to 4 weeks.”

However, Nilesh Shah, a Coimbatore based Financial Adviser, is skeptical about this amendment. He says health insurance penetration could only be increased if uniform tariff card is applied for all hospitals across the nation.

The insurance regulator has recognised registered homeopathic practitioners as medical practitioners.

IRDA has made changes in some standard definition of commonly used terminology of health insurance regulation. Now, the definition of portability is called ‘switching from one insurer to another’. However, switching from one plan to another of the same insurer has been omitted in the new definition.

Nisreen said “Switching facility from one plan to another plan is already available. Hence, excluding it from new definition doesn’t create any difference in the health insurance segment.”

Now IRDA has allowed any number of lawful terminations of pregnancy throughout the policy life. Earlier only two lawful terminations were allowed. Pre-natal and post-natal care have been excluded from the new definition of Maternity Expenses. Nisreen observes that exclusion of pre-natal and post-natal care from the new definition would be a setback as it may prove expensive for policyholders.

IRDA has added adopted children under its ‘new born baby’ definition. The regulator has also added full recovery clause in the new definition of acute condition. Acute condition is a disease, illness or injury in which medical treatment is immediately needed.

Deductible, which is cost-sharing requirement under a health insurance policy, has been left to insurers to decide whether the deductible is applicable per year, per life or per event.

 

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How IRDA’s recent health insurance reforms will benefit you

The IRDA is trying to streamline the definitions so that it becomes simpler and process wise everybody has clarity on what the claims etc are. So, number of changes that have come up; one, in terms of definition on deductibles wherein it defines how deductibles is wherein whatever is the amount of a person’s claim there is certain amount which is reduced from it. Therefore, if deductible is Rs 1,000 and claim is Rs 3,000 then he is paid out Rs 2,000. On the other hand if claim is Rs 1,000 then he is not paid anything. It also mentions how a deductible has to be claimed, what will be the amount whether it is annually or on per claim basis.

The second point is of co-payment wherein a certain percentages paid by the policyholder and there also the change that has come about is, any co-payment is excluded from the sum assured.

There is another change in terms of portability; portability is basically where one can move policy from one company to the other. It also allowed moving it between policies of the same company itself. That has been excluded.

There is a definition of hospitals being relaxed and any hospital, which is registered under the Clinical Establishment Act of 2010 is there, couple of changes in terms of maternity, it is expanded a little bit including complicated procedures etc and also today lawful terminations of pregnancies and there is another change which has come in terms new born definition also interestingly allows adopted children.

Therefore, a lot of changes are coming in and definitions are in place. It makes it easier for the customer to understand and also no misuse from the insurance company.

 

A ‘premium’ relief for diabetes, hypertension

New India Assurance—India’s largest non-life insurer—has decided to stop charging additional premium for those with diabetes and hypertension under its revised health insurance policy. The state-owned insurer has also withdrawn a clause from its policy that excluded cover for ailments caused by tobacco consumption.

The move will come as a relief to a significant chunk of India’s urban population and will also eliminate disputes arising out of wrongful rejection of claims. The company has decided to include tobacco-related ailments because the exclusion was causing hardship to a lot of policyholders and also because it amounted to rejection of claims on account of lifestyle. The new health insurance policy, however, continues to exclude cirrhosis of lever caused by alcoholism.

“Under the new policy there will be no difference in rates for a standard proposal and someone with diabetes or hypertension,” said G. Srinivasan, chairman, New India Assurance. He said that one of the reasons for the decision was the high incidence of people with such conditions. However, the earlier practice of having a four-year cooling period for pre-existing conditions will continue. This means that if a diabetic buys a policy, the coverage for diabetes related hospitalisation will begin only after four years.