13 June 2011
With the entry of new players, the health insurance scape has seen several innovations in the past couple of years. Here's how to make the most from these. Khyati Dharamsi
The shocker snuck up the same year at the time of renewal, when her premium shot up to 31,833. After last year's eye surgery, it inched up to 41,000. Parekh hasn't quite recovered. Not from the surgery, but the gravitydefying rise of her health premium.
The health insurance sector has been ailing from many such anachronisms, sustained by insurer monopoly and lack of awareness. Besides the rise in premium or even termination of policies during renewal, individual plans do not cover pregnancy or diabetics, doctor consultations are not entitled to an insurance, etc.
Though the sector is rocked from time to time by issues and controversies, the health insurance scape in India is gradually changing. The latest round of changes have been triggered in the past couple of years by the new entrants whose prescience has resulted in improvisations and new products suited to the consumers. ET Wealth takes a look at these new developments and how they can benefit you.
Health plans, unlike life insurance, require a renewal of contract every year. Traditionally, this has been a problem area because a heavy claim meant that either your cover was not renewed or the premium was zoomed to tactfully avoid renewal.
Now, however, two standalone health insurance companies, Max Bupa Health Insurance and Apollo Munich, are promising lifetime renewals without an unseemly rise in premium or threat of termination.
These insurers are estimating the probability of a person falling ill in a lifetime and then calculating the premium for various age groups. So the product may be expensive compared with a mediclaim, but at least your premium will not shoot up 20-30% during a renewal just because you made a claim. In fact, not content with a simple guarantee of renewal, insurers like Max Bupa are incentivising it. While mediclaim policies typically offer a noclaim bonus for those who do not make a claim in a year, Max Bupa offers a bonus of 10% of the renewal premium in the form of health services and products every time you renew, irrespective of claims.
OPD & dental treatment:
This addition is bound to elicit bigger, brighter smiles as dental treatment is now being covered by insurers. Under the Easy Health Premium Plan, Apollo Munich Health allows a claim of up to 5,000 for treatment, but only after you have completed three policy years. While regular visits and consultation are insured by Max Bupa for a cover of 15-50 lakh, Apollo Munich offers four to eight consultations during a year depending on the number of people insured.
Family floaters: The Indian joint family is also on the insurance radar. The family floater policy has become more appealing. The insurance has now been extended to cover 13 relationships in a family, along with a posse of benefits.
These include an individual cover besides the floating sum, a maternity benefit cover, insurance for a newborn, and health check-ups.
Non-working pregnant women will now have something to look forward to when it comes to maternity expenses and a cover for their newborns. Now, insurers are offering individual policies under which you can avail of maternity benefits after a waiting period of three-four years. Star Health and Allied Insurance's Medi Classic Policy offers a cover of 10% of mother's cover to the newborn.
However, there is a claim limit in most policies, which ranges from 15,000-25,000 in case of normal delivery to 25,000-40,000 if it is caesarean. Then there are policies that offer the facility at the end of two renewals.
A glaring hiatus in the health insurance scape, insurers are trying to bridge it by offering covers for treatment under the ayurvedic, homoeopathic and unani systems of medicine. This, of course, doesn’t mean that your massage and rejuvenation procedures at spas will be covered. Star’s Unique Health Insurance covers non-allopathic treatment costs up to 25% of the sum assured or 25,000 per treatment, per year, while New India Assurance covers treatment under ayurvedic, homoeopathic and unani systems to 25% of the cover, but only if taken at a government hospital.
Health plans have so far been one-year contracts, requiring an annual payment of premium. Now, Star Health and Allied Health Insurance has come up with the Star Unique Health Insurance plan for a twoyear period, where even the premium is to be paid in two instalments-at the start of the first year and the second year. The cover limits are applicable for each year and won’t be carried forward.
A waiting period of threefour years has been normal for pre-existing diseases. But, under Star Unique plan by Star Health and Allied, pre-existing diseases, other than those for which periods are specified, will be covered after 11 months of coverage.
Higher cover limit:
The highest health cover available in the industry so far was 10 lakh. Now you can buy one for 50 lakh, with Max Bupa's Individual Health Insurance plan offering a cover range of 15-50 lakh. As Damien Marmion, chief executive, Max Bupa, says, “It is important to have insurance that can help take care of an entire family. An individual and a family have unique health insurance requirements, so we offer comprehensive plans with covers ranging from 25-50 lakh.”
Diabetes and HIV cover:
There are now policies that cater to the people with diabetes, and even HIV, which was not included in health plans earlier. However, this doesn’t mean that the treatment of HIV/AIDS is covered. It’s only the treatment cost of any disease that an HIV positive patient suffers from that is insured.
While New India Assurance's Mediclaim policy does not cover HIV/AIDS, it includes pre-existing diseases and conditions such as hypertension, diabetes, and related complications, after two years of continuous insurance, by paying extra premium.
Not all improvisations in health insurance are for the better though. Insurers have come up with changes that are likely to increase your financial burden or inconvenience you. Here are some you need to watch out for.
Insurers have started including a co-payment clause, wherein the patient is asked to pay a percentage of the treatment cost under certain conditions, such as age or treatment outside the preferred network of hospitals. For instance, Bajaj Allianz General Insurance's Health Guard Policy requires a 10% co-payment if the treatment is done outside its hospital network.
This is another clause that is likely to add to your financial outgo. All health insurance companies, except Max Bupa and Apollo Munich, are adding the loading clause, according to which they will raise the premium during renewal in case of heavy claims. So, the United India Insurance states that if the claims are 100-125% of the premium, then the loading will be by 30%, if it is between 126-150% it is 50%, and for 150-200%, the loading will be 80%. Pre-approval: Insurers have begun to insist that you have to inform the insurer or the third party administrator (TPA) even if you are not using the cashless facility. There is an intimation clause in the policy, wherein you must inform within 24 hours of getting admitted even if you are not taking a reimbursement claim. The National Insurance has a seven-day limit.
Notwithstanding these disadvantages, the conveniences and services are a welcome change. However, these come at a higher cost. So, if earlier, you paid a premium of 5,054 for a health plan, the new standalone insurers will charge 3,795-21,460 for the same policy. Still, one should not compare on the basis of cost as some covers, such as those for OPD, maternity, dental treatments and annual health check-ups, are not part of regular policies.
“We are charging more for a particular policy as that target group is more likely to make claims. The premium is double because the claim pattern will be different," says RS Nayak.
What's new in group plans?
Here are some offerings in group
policies that can impact you
If you retire or change jobs
Most advisers suggest an individual health plan along with the employer group cover because you are liable to be left in the lurch after retirement or if you change jobs or the entrepreneurial bug bites you. But insurers are now offering plans that enable seamless transition from a group to an individual cover while continuing with the benefits and without impacting your claim status.
So now you can easily transit from the group policy to an individual or a family health insurance policy. Apollo Munich and Max Bupa Health Insurance offer this facility.
If you have senior citizen dependants
Though corporates have not yet put a blanket ban on group covers that include senior citizen dependants, more and more are opting out of such policies or asking for a higher premium to be paid by the employee. So it makes sense to pay a little higher premium and take the dependant cover from your employer because of the benefits it offers.
If you choose a PPN hospital
In case of an individual policy, you can get cashless facility at a number of hospitals, but the employer cover may now restrict you to a lesser number of hospitals. This is because the public sector insurers, which cover 70% of the corporate and retail market, are enticing corporates to buy a plan which covers the preferred partner network (PPN) of hospitals. If the corporate agrees to restrict itself to a network of, say, 650 hospitals, the insurer offers a 10% discount in premium over and above the regular discount. The premium is higher if the corporate insists on all the 3,000 hospitals. This is because they have a negotiated rate with the PPN hospitals and would like to get more business at that cost.