How to choose health insurance in times of coronavirus pandemic
With a surge in positive cases of COVID-19 globally and in India, people are worried about their health insurance policy covering them adequately, while others have spared no time in purchasing health covers. Most health products offered by insurers cover inpatient treatment for COVID-19. While choosing a product that provides health insurance coverage, including cover for coronavirus treatment, it is prudent to bear in mind the four Cs. These are - benefits Covered, Coverage, Co-pay and room rent limits, and Consumable cover.
Here is a look at the four Cs in more detail.
Benefits covered: Majority of people who contract COVID-19 would not have any significant symptoms that require inpatient treatment. Some of them may require a COVID-19 diagnostic test or basic medication on an outpatient (OPD) basis. These are only covered in products covering OPD expenses. Check if your policy has an OPD cover so that these expenses are covered.
If the patient requires hospital admission, the expenses would be covered under most insurance products. However, few insurers have an exclusion built in for pandemic diseases. Read the fine print to ensure that your policy does not have such exclusions.
Reports in the public domain indicate that admission for treatment of COVID-19 is more likely in the vulnerable population that includes senior citizens and those with comorbidities like hypertension, diabetes and respiratory tract diseases. In case you suffer from any of these comorbidities prior to buying the policy, there could be a pre-existing disease waiting period for these conditions.
Do check with the insurer on how they treat claims for COVID-19 and where part of the treatment would be for diseases that have waiting periods. Even though the Insurance Regulatory and Development Authority of India has standardised how these conditions are to be treated, the standardised protocol is expected to be fully in effect only by the end of the year. Till then claims are likely to be processed on the basis of the issued policy document.
Coverage: There are around 200 claims reported by insurers for COVID-19 and most of the patients are still admitted, so it is premature to analyse treatment costs for COVID-19. Based on a quick analysis of claims from the six major cities and an assessment of treatment costs based on length of stay, reported complications, etc., the average claim size of COVID-19 is expected to be more than Rs 5 lakh. Also, there is a likelihood of more than one person in the same family contracting the virus due to its highly infectious nature and sometimes asymptomatic behavior. It is, therefore, important to have insurance coverage of more than Rs 10 lakh to ensure that you are adequately covered.
Co-pay and room rent limits: Many health insurance products require the customer to bear a part of the expense from his pocket, called a co-pay, a simple cost control measure built in by insurers. Co-pay is a reasonable amount to pay out of your own pocket when the bill is small, but when the bills are large, the burden is likely to be heavy. For example, if your policy has a 10 per cent co-pay and the claim is Rs 50,000, you are expected to bear Rs 5,000 and the insurer would pay the remaining Rs 45,000. However, if the bill is Rs 10 lakh, you will end up paying Rs 1 lakh. Check if your policy has a co-pay clause and the quantum of the same.
In COVID-19 cases, a large part of the treatment cost is on room rent, especially if the insured person is treated in a private hospital. Many of the tertiary care hospitals have created specialised isolation facilities that are charged higher than regular rooms. Many health insurance products have a room rent limit -- either by restricting it to a percentage of the sum insured or by specifying a room category.
If your room rent is beyond this limit, there could be proportionate deduction in your claim amount. Understand it like this, if you have a room rent limit of Rs 5, 000 a day (1 per cent of Rs 5 lakh sum insured) and you are admitted in a room that costs Rs 10,000, the insurer will cover only 50 per cent of the expenses excluding medicines. Ask questions regarding any room rent sub-limits that the policy may have, since these sub-limits within a policy could entail potentially large out-of-pocket expenses.
Consumables: Items that are intended for one-time use, largely due to reasons of sterility and infection prevention are called consumables. Gloves, masks, sanitizers, cotton, etc. are classified as consumables. Most health insurance products do not cover consumables. COVID-19 is a highly infectious disease and healthcare workers are forced to use whole-body personal protective equipment (PPE) in large numbers, to prevent the spread of infection from the patients being treated to healthy individuals. This is one of the reasons behind increased numbers of consumables such as masks, gloves, goggles and PPE suits, resulting in higher hospital bills. It may be worth your while checking if your policy covers consumables. Only a few products in the market cover consumables, so choose wisely.
Times may seem bleak, but this too shall pass, and when it does, we will need to get ready for life to return to normalcy. Part of this normalcy will be finances, and for life to move on, it's crucial to make sure savings have not been eaten away through avoidable medical expenses, over the course of these few weeks.
So, stay indoors, wash your hands, try not to panic, and most importantly stay insured.