Topic 4: How the changes in health insurance norms from October will benefit policyholders
From October, your health insurance policies will receive a much-needed revamp and they will be re-introduced in accordance with the guidelines and specifications issued by the Insurance Regulatory and Development Authority of India (IRDAI). The revamped policies will come into effect from October 1, 2020 and the new changes will be applicable on all existing and new health insurance policies. For customers, the revised policies will mean cover for more illnesses and procedures at affordable prices. The new guidelines were issued to insurers in a staggered manner over the last one year in order to make health insurance policies more standardised and customer-centric. Here is a closer look at the expected changes in existing policies.
Cover for New Ailments
The regulatory body has issued a list of guidelines that specify the various illnesses that will now be covered under a regular health insurance cover. In future, insurers will be barred from excluding illnesses contracted due to hazardous activity. Also, treatment for mental illness, age-related degeneration, internal congenital diseases and artificial life maintenance will be covered under a comprehensive health insurance plan. A few other common illnesses for which cover will be provided under your insurance plan include, behaviour and neurodevelopment disorders, genetic diseases and disorders and cover for puberty and menopause-related disorder. Apart from these, age-related illnesses that include cataract surgery and knee-cap replacements will also fall under the list of inclusions under your health plan. Also, factory employees working with harmful chemicals that impact health over the long term must be given treatment for respiratory or skin ailments that arise as a result of workplace conditions. The regulatory body has even standardised the exclusions in health insurance policies, which means that if an insurer does not want to cover some specific ailments such as epilepsy, chronic kidney diseases and HIV/AIDS must use specific wordings as defined by the regulatory body in the policy terms. Insurers have also been asked to specify a waiting period of 30 days to one year, after which the coverage would begin for the illness.
No Rejection of Claim After 8 Years
In June last year, IRDAI stated that if a health insurance policy has completed eight years, i.e., the policyholder has been paying premium for eight years continuously a health insurance claim cannot be rejected except for proven fraud and permanent exclusions. This means, a customer’s health insurance claim won’t be rejected from the ninth policy year unless you have indulged in fraud or are making a claim for a permanent exclusion. This is certainly a welcome relief for the honest health insurance buyers whose claim earlier was rejected even after paying premium for 10 years. The proposal refers to these eight years as ‘Moratorium period.’ However, if the policy has sub-limits, co-payments or deductibles attached to it, those will be adhered to as per the valid terms and conditions.
New Definition of PED
As per the guidelines issued in regard to standardization of health insurance policies, the definition of pre-existing diseases (PED) has to be modified to cater to the needs and requirements of customers. In accordance with the issued guidelines, any disease/s or ailment/s that is/are diagnosed by a physician 48 months before issuance of the health cover will be classified under PED. Also, any disease/s or ailment/s for which any type of medical advice or treatment was recommended by a qualified doctor 48 months before issuance of the policy will also be qualified under PED. Further, any condition whose symptoms or signs have resulted within three months of the issuance of the policy will also be classified under Pre-existing Diseases. To ensure that policyholders suffering from pre-existing diseases get adequate health insurance coverage, IRDAI has mandated that insurers include permanent exclusions only after due consent of the customers. Apart from a list issued by the IRDAI, no other exclusions will be allowed in the health insurance plans. As per the guidelines, all health conditions and illnesses suffered after the issuance of policy will be covered under your health insurance. Some of the important and major diseases that must be added to the list include Alzheimer, Parkinson, AIDS/HIV and morbid obesity.
Paying health insurance premiums in EMIs
Amidst the ongoing COVID-19 outbreak, the Insurance Regulatory and Development Authority of India (IRDAI) came out with a circular in June for minor modifications in policies filed by general and standalone health insurers. As per the circular, the regulator allowed the payment of health insurance premiums in instalments. Of course, it is entirely up to the insurers to decide whether or not to offer the facility of paying premiums in instalments to the customers. The premium mode (frequency) can be monthly, quarterly or half-yearly, as decided by the insurer. Hence, from here on, instead of paying an annual premium of, say, Rs 12,000 as a lump-sum, you will now have the choice of making the payment in equal instalments over regular intervals in a year.
Cover for New Ailments
The regulatory body has issued a list of guidelines that specify the various illnesses that will now be covered under a regular health insurance cover. In future, insurers will be barred from excluding illnesses contracted due to hazardous activity. Also, treatment for mental illness, age-related degeneration, internal congenital diseases and artificial life maintenance will be covered under a comprehensive health insurance plan. A few other common illnesses for which cover will be provided under your insurance plan include, behaviour and neurodevelopment disorders, genetic diseases and disorders and cover for puberty and menopause-related disorder. Apart from these, age-related illnesses that include cataract surgery and knee-cap replacements will also fall under the list of inclusions under your health plan. Also, factory employees working with harmful chemicals that impact health over the long term must be given treatment for respiratory or skin ailments that arise as a result of workplace conditions. The regulatory body has even standardised the exclusions in health insurance policies, which means that if an insurer does not want to cover some specific ailments such as epilepsy, chronic kidney diseases and HIV/AIDS must use specific wordings as defined by the regulatory body in the policy terms. Insurers have also been asked to specify a waiting period of 30 days to one year, after which the coverage would begin for the illness.
No Rejection of Claim After 8 Years
In June last year, IRDAI stated that if a health insurance policy has completed eight years, i.e., the policyholder has been paying premium for eight years continuously a health insurance claim cannot be rejected except for proven fraud and permanent exclusions. This means, a customer’s health insurance claim won’t be rejected from the ninth policy year unless you have indulged in fraud or are making a claim for a permanent exclusion. This is certainly a welcome relief for the honest health insurance buyers whose claim earlier was rejected even after paying premium for 10 years. The proposal refers to these eight years as ‘Moratorium period.’ However, if the policy has sub-limits, co-payments or deductibles attached to it, those will be adhered to as per the valid terms and conditions.
New Definition of PED
As per the guidelines issued in regard to standardization of health insurance policies, the definition of pre-existing diseases (PED) has to be modified to cater to the needs and requirements of customers. In accordance with the issued guidelines, any disease/s or ailment/s that is/are diagnosed by a physician 48 months before issuance of the health cover will be classified under PED. Also, any disease/s or ailment/s for which any type of medical advice or treatment was recommended by a qualified doctor 48 months before issuance of the policy will also be qualified under PED. Further, any condition whose symptoms or signs have resulted within three months of the issuance of the policy will also be classified under Pre-existing Diseases. To ensure that policyholders suffering from pre-existing diseases get adequate health insurance coverage, IRDAI has mandated that insurers include permanent exclusions only after due consent of the customers. Apart from a list issued by the IRDAI, no other exclusions will be allowed in the health insurance plans. As per the guidelines, all health conditions and illnesses suffered after the issuance of policy will be covered under your health insurance. Some of the important and major diseases that must be added to the list include Alzheimer, Parkinson, AIDS/HIV and morbid obesity.
Paying health insurance premiums in EMIs
Amidst the ongoing COVID-19 outbreak, the Insurance Regulatory and Development Authority of India (IRDAI) came out with a circular in June for minor modifications in policies filed by general and standalone health insurers. As per the circular, the regulator allowed the payment of health insurance premiums in instalments. Of course, it is entirely up to the insurers to decide whether or not to offer the facility of paying premiums in instalments to the customers. The premium mode (frequency) can be monthly, quarterly or half-yearly, as decided by the insurer. Hence, from here on, instead of paying an annual premium of, say, Rs 12,000 as a lump-sum, you will now have the choice of making the payment in equal instalments over regular intervals in a year.