Health Insurance actions to survive through the COVID-19 crisis

1. Health Insurance actions to survive through the COVID-19 crisis

2. Regular health insurance may not be enough. I have been talking about this for a while now. While your regular health insurance policy does cover COVID-19 hospitalization expenses, it may be grossly inadequate. Here’s is a ballpark estimate of hospital bills and deductions if you have a 5L health insurance with room rent limits. The table should help you understand the magnitude of the problem we are facing.

3. 2. Deductions on account of Room Rent Limits. As you would have already heard on social media, Hospitals are charging a bomb for room rent. Many health insurance policies have a cap for per day room charges. Such caps will result in a significant deduction in your claim amount. What’s worse, these claims will also attract something called “proportionate deduction”. This means not only will the customer bear the difference amount between paid room rent and eligible room rent, but also bear proportionately on all other associated expenses. For instance, if you are hospitalized for ten days, the room rent limit in the policy is Rs. 5000, and the actual room rent charged is Rs. 10000. In this case, not only will the insurer deduct Rs. 5000 X 10 days = Rs. 50000, but also deduct 50% for expenses that are linked to the room charge structure in the hospital like doctor visits, surgery costs, diagnostic tests, etc. (called associated expenses) 3. Deductions based on the “Reasonable & Customary Charges” clause. In the absence of a robust healthcare regulation that standardizes healthcare costs, Insurers are invoking the “Reasonable & Customary Charges” clause in the health insurance policy contract that protects themselves from unreasonable billing from the hospital. But what is this clause? As per this clause, an insurer is only liable to reimburse for charges that are reasonable and customary for a hospital of a similar grade/certification in the same geographical location. So if a Grade A hospital certified by NABH or similar certification body charges say Rs. 10000 per room per day and your hospital which is of similar grade and in the same geo-location charges Rs. 18000. The insurer can invoke the reasonable and customary charge clause and deduct Rs. 8000 per day from room rent.

4. Insurance Industry has standardized the charges it will pay. Since what is reasonable can be a subjective interpretation of each insurer, very recently, the general insurance industry got together to standardized the costs it will pay for various line items in a hospital bill. This standardization will be implemented under the reasonable and customary clause we discussed above. Now, if hospitals too agree for these standardized costs, then life would have been easy. But hey this is 2020 remember, so while Insurers have been working to enforce these standard charges with hospitals, hospitals have been actively resisting these standard rates. This situation will, for sure, result in disputes—no prizes for guessing who will bear the remainder of what the insurer does not pay. THANK YOU