Health Insurance Norms for a More Customer-friendly 2022

Healthcare in India is a tricky subject. India has one of the highest private healthcare spending across the globe. Almost 75% of the total healthcare expenditure comes out of the pockets of the private system. And medical inflation being high in the country does not aid the purpose as well. The cost of treatment is constantly on the rise, thus buying a health insurance plan becomes even more crucial.

The Insurance Regulatory and Development Authority of India (IRDAI) has come up with a few measures to enhance health insurance benefits from the 1st of January 2022. The main aim of these changes is to make health plans more customer-friendly and more accessible than ever. 

Addition of New Ailments

The IRDAI has come up with specific guidelines regarding the inclusion of new ailments in health insurance plans. Ailments such as genetic disorders, menopause-related disorders, neurodevelopment disorders, etc. will now be covered as a part of health insurance plans.

Going forward, insurance providers will have to offer coverage for illnesses caused due to hazardous activities. Also, comprehensive health insurance plans must now include the cost of mental illness, artificial life systems, internal congenital diseases and degeneration due to age.

Health insurance providers will also have to include treatments such as cataract surgeries and knee-cap replacements as a part of a standard health plan. The changes also put in a clause to offer coverage for skin and respiratory issues for people who are exposed to harmful chemicals due to their work atmosphere. Insurers can no longer put the above as exclusions for their plans.

Changes to Pre-existing Diseases

IRDAI wants to ensure that policyholders receive adequate coverage even if they suffer from pre-existing diseases. As per the new guidelines, insurers can include exclusions as a part of the policy, only after getting consent from policyholders. Insurance providers cannot add any more exclusions apart from what the IRDAI has provided.

The guidelines also state that a policyholder can claim all medical issues that a policyholder suffers on the commencement of the policy.

The regulatory body intends to standardize health insurance policies and thus, has suggested a change in the definition of pre-existing diseases. Any medical condition that was diagnosed or you have received medical advice from a doctor 48 months before the issue date of the policy is categorized as a pre-existing disease. It aims at catering to better customer requirements.

In other words, any injuries or medical conditions or ailment for which a policyholder was diagnosed or had symptoms or received medical treatment, 48 months before buying the first health insurance policy for the pre-existing disease. The 48-month rule holds good for first-time purchases and not on renewals.

Ailments such as Alzheimer’s, Parkinson’s disease, morbid obesity, AIDS, etc. must be included as a part of pre-existing disease.

Standard Exclusion Set

To standardize health insurance plans, the regulatory body has asked the insurers to use only the wording provided by the IRDAI in the policy terms and conditions. This is applicable if a health insurer does not want to cover medical conditions such as HIV, kidney diseases, epilepsy, and so on.

All the insurance providers are also notified to offer a waiting period of between 30 days and a year. On the completion of this, they must provide cover for the illness in question.

EMIs for Insurance Premiums

The ongoing pandemic has been financially hard for a lot of people. To make health insurance plans a bit more accessible, the IRDAI recommended minor changes to the payment schedule on offer for health insurers and general insurers. 

As a result of which, medical insurance plans are now available with EMIs. You can opt to pay for the policy premium by a set amount every month, rather than a yearly lump sum amount. The decision to choose EMIs is entirely on the policyholder.

The different payment schedules include monthly, quarterly or half-yearly. This allows customers to pay for their health insurance plans more conveniently. 

It also makes a lot of other things more accessible. For starters, you can now opt for a policy with higher coverage, as the smaller installment amount will make it easily achievable. This also allows policyholders to select family floater health insurance plans with a bit more ease.

Read more - Should You Buy Health Insurance on EMIs?

No Claim Rejection Post 8 Years

In June 2019, the IRDAI set out guidelines that insurance providers cannot reject claims if a policyholder has been paying premiums for 8 consecutive years. As per the guidelines, the only conditions where an insurance provider can reject a claim is if the medical condition is on the list of permanent exclusion or if fraud is proved.

The move was crucial for a lot of policyholders who faced the humiliation of their claims being rejected, even after paying premiums regularly for almost a decade. The 8-year duration is otherwise referred to as the moratorium period of the policy. For other details such as sub-limits, co-payment or deductibles, the ones outlined in the policy document would be valid.

The only clause is that a policyholder has renewed for 8 years without any breaks. And insurance companies cannot reject claims based on non-disclosure or misrepresentation of the policy.

New Rules for Insurers

Here are some of the new rules that IRDAI has published:

• Group health insurance policies can only be valid for a year.
• Policies that are renewed without any gaps, will not have an exit age.
• The premiums charged to senior citizens must be transparent and fair.
• If an application is rejected, the insurer must provide a just and transparent reason for the same.
• Policyholders who bought their policies early, renew on time or offer favourable claims experience should be rewarded.

Read more - How Health Insurance Functions in India

Conclusion

The presence of medical insurance can give a lot of confidence to policyholders if they were to face any medical conditions. The recent changes suggested by IRDAI aim at improving the health insurance claims experience of policyholders. In addition to new ailments to the policies, the health plans have become a bit more robust than they used to be. The standardization of policies will also help insurers in the long run, along with the option to pay for the policy with EMIs.

Read more - Changes to Health Insurance Laws Over Time