Times of India
12 August 2010
New Delhi, India

Mediclaims for big hospitals set to soar
Your mediclaim policy premiums may go up substantially if you need treatment at big hospitals like Jaslok, Hinduja, Lilavati, Apollo, Fortis and Gangaram as insurance companies are devising new products to break the deadlock over cashless facility.

Refusing to mediate between major hospital chains and insurance companies on denying cashless treatment to policy holders, Insurance and Regulatory Development Authority (IRDA) chairman J Hari Narayan on Wednesday hinted that premiums for treatment in five–star hospitals could go up. "If you want to stay at Ashoka Hotel and avail of five–star facility, you need to pay more," Hari Narayan said at a FICCI meeting.

His remarks came a day after the Delhi high court directed the insurance regulator to sort out the imbroglio over cashless facility in major hospitals across the country. The IRDA chairman said there was nothing the regulator could do about it. He said he had held extensive discussions with major hospital chains and insurers, but it was not an issue for the IRDA to address.

Ever since insurance companies discontinued the cashless facility to their policy holders at major hospital chains, the IRDA has said that it is for the health ministry to regulate the overcharging by hospitals and there is nothing wrong in the insurance companies denying cashless facility as long as they reimburse claims.

On Wednesday, Hari Narayan went a step further and said in light of the present controversy, if insurance companies decided to revise their premium for treatment at five–star hospitals, the regulator would not be able to stop them. Different premium for different hospitals? New Delhi: Stating that the IRDA would not intervene if insurance companies revised their premium for treatment at five–star hospitals, its chairman J Hari Narayan said, "We have long moved away from the administered price regime and it is for the market forces to determine the price of their product."

He added that there may be co–payee or higher premium products for five–star hospitals which insurance companies would have to decide, and consumers would get a range of products.

For instance, if you take a Rs 3 lakh limit reimbursement policy, it may invite a different premium for a set of hospitals and altogether different for five–star hospitals. The pricing will entirely be determined by insurance companies, with the IRDA playing no role, he said.

The cashless facility was discontinued at all major hospitals from July 1 as they refused to lower their rates for many of the standard procedures. Four major PSU insurers who command 80% market share in health insurance have said hospitals must agree to the package deals if they need to be on the preferred network service and benefit from the cashless system.

These insurers, along with some TPAs, have worked out package rates for some of the hospitalisation expenses which are commonly claimed under health insurance policies and have asked all hospitals to abide by the prescribed rates to be on the cashless facility. The insurers, 18 of them including the four PSUs, took the step saying they were bleeding to the extent of Rs 1,500 crore annual over what they collected as premium from mediclaim policies while settling claims of hospitals across the country.