Times of India
14 July 2010
Mumbai, India

On Sunday, Thane resident A Menon (name changed) was waiting to be discharged from a suburban hospital after five days of hospitalisation for a seemingly simple hernia operation. He had developed complications that needed ICU stay and led to a bill of a whopping Rs 2.5 lakh.

“My father was ready for discharge early in the morning, but it was 9.30 pm before he actually left the hospital,” said his daughter Diya (name changed). The reason? The family had an insurance scheme worth Rs 2 lakh. “We had raised Rs 50,000 to settle the bill, but we were then told that we had to pay another Rs 20,000 as the insurance claim also contained 10.3% of the service tax component,” she added. In other words, it took hours before the family rushed to raise another Rs 20,000 and settled the bill to take their father home. The service–tax burden, coming after the decision by major insurers to yank hundreds of hospitals off the insurancecover network, has obviously come as a shock for Mumbaikars.

In fact, a few like–minded Mumbaikars are toying with the idea of moving the courts.Said a doctor,“The terms of an insurance policy cannot be changed mid–stream without informing customers.” Consumer activist Jehangir Gai concurred, “In the past, the Supreme Court has ruled in favour of the consumer even when the premium has been changed mid–stream.”

Gai said that a group of consumer activists were studying a Supreme Court judgment of 2001 in which the court had stated that a renewal of an insurance policy means repetition of the original policy. “In effect, it means that whenever a mediclaim policy is renewed, it is simply extended with the company concerned carrying forth identical terms as the previous year’s policy,” said Gai.