Health insurance in COVID times: What you need to know

Are you worried that your insurance covers during the Covid-19 pandemic? Wonder whether it will cover any hospitalisation due to the Coronavirus?

Let’s break the good news straightaway: No matter which insurer you bought your health insurance policy from, it covers COVID-19. That’s one less thing to worry about in the time of the coronavirus.

What IRDAI guidelines say

In a recent interview, Insurance Regulatory Development Authority of India (IRDAI) chairman Subhash Chandra Kuntia outlined the COVID-related guidelines issued by the insurance regulator. Here’s a sampling of the IRDAI’s directives:

  • Advisories were issued to insurers well before the lockdown. These offered clarity on the coverage of COVID-19 claims under existing health insurance policies.

  • Insurers have been instructed to ensure speedy settlement of COVID-19 claims.

  • The IRDAI has granted extra time for premium payment while continuing coverage under existing life, health, and third-party motor insurance policies.

The IRDAI had also issued a circular during the first week of March. This circular detailed the regulator’s guidelines for handling coronavirus-related claims. The guidelines mandated the following:

  • If hospitalisation cover is available: Insurers must see to it that cases related to COVID-19 are handled speedily.

  • Costs of admissible medical expenses: Costs incurred during the course of treatment, including any treatment during the quarantine period, must be settled in accordance with the terms and conditions of the policy contract and the regulatory framework.

  • Claims reported under COVID-19: The claims review committee must review these thoroughly before any claim rejection.

The circular also noted that insurers had been designing need-based products which covered specific diseases, including vector-borne illnesses. Hence, it advised insurers to set up policies that cover COVID-19 as well. Accordingly, around 29 insurers like Kotak Mahindra General Insurance, HDFC Ergo, Digit, SBI General and others, are offering this product, as per a Livemint report published on 2 nd April, 2020.

What this means for you

If you already have regular or specialised health insurance that offers hospitalisation, it will cover the costs of COVID-19 treatment. This benefit is applicable across all age groups. The coverage available will be limited to the sum insured of the policy.

Did you get a policy recently? Keep in mind that infectious diseases (such as COVID-19) are not covered for up to the first 30 days of the policy.

Coverage under Health Insurance

The coverage for coronavirus infections is no different from that for any other ailment. Here’s what you can expect, as per an article by The Hindu dated 20th May, 2020:

  • During hospitalisation: All your treatment-related expenses will be covered to the extent of the sum insured. However, this will be subject to the sub-limits in your policy. For instance, there may be daily caps on room rent or ICU charges. In such cases, you can claim expenses only up to the policy limit.

  • Cashless facility: To enjoy the cashless option, you must get admitted to an ‘empanelled hospital’. This means a hospital or nursing home with which the insurer has a tie-up. What if you get treatment at a hospital outside the insurer’s network? You will then have to pay the bills yourself and later file a reimbursement claim with your insurer.

  • Pre-and post-hospitalisation expenses: Costs relating to regular blood tests, x-rays, and ambulance expenses will be covered for up to 30 days both before and after hospitalisation.

  • Quarantine-related costs: All such medical expenses will be reimbursed by the insurance provider.

Do note that the coverage may change for different policies. They may or may not offer all the above coverage. And there may also be cases where you may have to pay in part for these charges. Kindly read & understand the policy carefully.

Risk of Claim Rejection

Under certain circumstances, insurance providers may decline to honour your claims. Let’s examine the conditions under which claims relating to COVID-19 may be rejected:

  • The insured and their family members have recently travelled to the worst-affected countries.
    Any insurance contract implies that the insured will not take additional risk that is not originally covered under the policy. Travelling to the worst-affected countries constitutes one such additional risk. Therefore, claims are not admissible under the policy.

  • The insured has been hospitalised for less than 24 hours.
    This is a standard condition of almost all health insurance policies.

  • The insured has contracted the disease during the policy’s waiting period.
    All health insurance policies start admitting claims only after a mandatory waiting period. This is typically 15 to 30 days. If someone catches COVID-19 within that period, they cannot submit a claim.

  • The insured bought the policy after contracting the disease.
    Health insurance typically does not cover pre-existing health conditions. Suppose an individual buys a policy after contracting COVID-19. In that case, the disease will be treated as a pre- existing health condition. As such, any coronavirus-related claim may be rejected.

  • The insured already had cold-like symptoms and is going for planned treatment.
    Here too, the illness may be treated as a pre-existing condition, leading to claim rejection.

COVID-19 Insurance

In line with the IRDAI’s circular, several insurance companies have introduced coronavirus health insurance policies. Such customised plans offer cover against medical expenses in case you contract COVID-19. Here are some of the key features of these policies:

  • These are disease-specific plans offering a lump-sum payment on diagnosis of a coronavirus infection.

  • If the insured tests positive for the coronavirus, they could receive 100% of the sum insured as a lump-sum payment.

  • If the insured is quarantined at a medical centre, they could receive 50% of the sum insured as a lump-sum payment.

  • The waiting period for the policy to become active is up to 30 days.

The above points are assuming there is no co-payment involved. So it’s important that you check the policy for the co-payment clause.

A coronavirus health insurance policy could be a timely solution for individuals who do not have health insurance cover. However, there are certain exclusions that you should note. Claims will be denied if you:

  • quarantine at home or at a non-recognised quarantine centre

  • incur medical expenses for treatment of a pre-existing disease

  • incur pregnancy-related medical costs

  • seek hospitalisation for COVID-19 without a written recommendation on a doctor’s prescription

Do understand whether the policy is specifically designed for Coronavirus infections or if it’s a comprehensive general health policy that also covers Covid-19 infections. The coverage will differ accordingly.

Insurance Abroad

Travel insurance that covers COVID-19 remains off the table for the time being. Keep in mind that the government is urging people not to travel anywhere, especially abroad. So, insurance companies are unlikely to provide COVID-19 cover to those travelling internationally.

Summing up

The cost of treatment for coronavirus infections varies depending on your age, the severity of the infection, and your choice of hospital. On average, it could range anywhere from Rs 5 lakh to Rs 12 lakh in a private hospital, as per a Financial Express report dated 27th April, 2020. The health insurance with a Rs 5 lakh cover, though, may cost around Rs 6,000* for a 30-year-old, as per this Economic Times report.

So, knowing your options is the first step to securing your health. If you have health insurance coverage already, that’s wonderful! If not, consider getting either a regular policy or a coronavirus plan to safeguard both your health and your finances.

*Note: Health insurance premium depends on a variety of factors like age, location, existing illnesses, etc. as well as policy coverage and add-ons.

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