The virus is weighing heavily on India. Citizens of the third-worst affected country by coronavirus outbreak (Covid-19) are spending sleepless nights. On one side the number of cases and deaths is rising by the day, and on another side, the cost of surviving the pandemic is brutal. Getting a bed is a tough challenge. Private-sector hospitals are arbitrarily charging money, running into tens of lakhs of rupees, for each patient’s Covid-19 treatment. There is massive confusion over whether the cost of personal protective equipment, used by doctors and nurses, to meet and take care of patients, is covered by health insurance policies. At the heart of the issue, are the different standards adopted by different states, when it comes to bearing healthcare treatment expenditure for patients during this deadly virus attack. So, in a sense, there is extreme helplessness if one is affected or is recovering. At this time, insurance companies have launched coronavirus-specific health insurance policies, due to the nudge of regulator IRDAI. If you have a wholesome health insurance policy, do you need a special cover? Do you really need to buy a coronavirus-specific health insurance? In this article, we try to answer these questions…
The first point, we want to highlight is that hospitals are often not accepting the cashless claim facility offered by insurers. Many coronavirus patients have faced this problem. Without a cashless claim facility, family members were forced to arrange cash at short notice. Critical patients are not treated without cash payment because hospitals did not accept cashless settlement of hospital bills by the insurance company.
When hospitals refuse cashless facility, as a health insurance policyholder you have to arrange cash and later file a reimbursement claim with the insurance company. Even, the health insurance company cannot force a hospital to accept a cashless claim facility. This means that the so-called wide network of hospitals accepting cashless admissions is no guarantee of cashless claims. This problem can be faced if someone has a traditional health insurance policy.
The main point of conflict between hospitals and insurance companies is the lack of mutually agreed standard treatment rates. Also, in many cases, the insurers have not revised cashless agreement rates. Plus, cashless claims often are not settled in time, which makes accepting the claims for hospitals a burden. In such a situation, it is the patient and family who have to pay the difference from their own pocket. If the hospital bill is Rs 9 lakh and the insurance company pays only Rs 6 lakh, the balance Rs 3 lakh is recovered from patients. To avoid such a nasty scenario, some hospitals insist on cash and thereby put the entire onus of money arrangement on the policyholder family.
Another emerging area of the problem, which is connected to the above point, is the fact that many expenses are not being covered by a hospitalization policy. Some policies and insurers say they are not bound by rules to pay for the cost of personal protective equipment (PPE). PPE is technically non-medical expense and this is a big issue. In any other disease treatment, PPE is not a major cost. But due to the infectious nature of Covid-19, PPE is widely used by doctors, nurses, and healthcare workers coming in touch with affected patients during the treatment at hospitals. The same PPE is not used for two different patients. This leads to the multiplication of costs. Ultimately, the final bill may have 25-30 per cent of expenses directly attributed to PPE. If insurers don’t pay this, the liability falls on the patients. In a health insurance policy claim, if average patients have to pay 25-30 per cent from their own pocket, then how can somebody convince people to pay a premium?
Specific covers for Covid-19
The points mentioned in the earlier paragraphs are not to highlight the disadvantages for one having a traditional health policy. But honouring claims is the moment of truth. If claims are not paid properly, then that reduces the importance of buying a regular health insurance policy which should also cover Covid-19 treatment.
Understanding that there is no quick solution for the problems between hospitals and insurers, the Insurance Regulatory and Development Authority of India (IRDAI) has designed two standardized Covid-19-specific covers. Insurers introduced them by July 10 as.
These two standardized coronavirus-specific health covers are called Corona Kavach (CK) and Corona Rakshak (CR). Let us understand the difference between CK and CR. Corona Kavach or CK will pay for your coronavirus-related hospital expenses. On the other hand, Corona Rakshak or CK will pay a fixed benefit amount on Covid-19 diagnosis.
Corona Kavach provides coverage, starting from Rs 50,000 and ending at Rs 5 lakh. This is not a 12-month policy. The policy periods are short term in nature like 3.5 months, 6.5 months, or 9.5 months. There is a maximum of 15 days of waiting period, which means you can’t take the policy today and get admitted for Covid-19 tomorrow. There must be a 15 days gap. The good thing about Corona Kavach is that it will reimburse treatment costs and non-medical expenses without sub-limits. Hospitalization has to be for a minimum period of 24 hours. It also promises a cashless facility at network hospitals of the insurer. Additionally, Kavach covers the costs of treatment for any co-morbid condition including pre-existing ones, along with Covid-19 treatment. Anybody up to 65 years of age can get coverage. Individual and family floater covers are available. Premium rates vary across insurers and so you have to do attentive shopping, while choosing the best value-for-money Kavach policy. The Corona Kavach policy gives one the option to add ‘Hospital Daily Cash’ cover. Under this, the insurer will pay 0.5 per cent of the sum insured per day for treatment of Covid-19 following an admissible hospitalization claim under this policy. The benefit is paid for a maximum of up to 15 days during a policy period. The optional cover costs extra money.
Corona Rakshak is a simple policy. It pays you the moment you get diagnosed and hospitalized. So, if the insured person is diagnosed with Covid-19 from a government-authorized lab or diagnostic centre and is hospitalized for 72 hours, the promised sum is paid as a fixed benefit. Your bill may be less or more than the sum assured --- but if you satisfy the insurance company, you get the full amount. Only individual covers are available in Corona Rakshak. The claim money that is given starts from Rs 50,000 to Rs 2.5 lakh. This too is a short-term policy with tenure of 3.5 months, 6.5 months, and 9.5 months, including the waiting period.
What To Do
Both Kavach and Rakshak policies are good add-ons. But they are short-term in nature. Even though traditional health policy claims have witnessed some problems, coronavirus-specific health insurance covers are never a 100 per cent substitute for a regular health insurance plan.
In case you do not have a basic health cover, please take one immediately. Both Corona Kavach and Corona Rakshak help provide specific cover with regards to any medical expenses towards the treatment of Covid-19 at an affordable price.
In case you already have a health insurance policy, you can purchase either CK or CR as a supplementary cover only.
Please understand that for a first-time buyer of health insurance, it is advisable to have a broad perspective, while choosing the policy cover. Do not get obsessed with Covid-19. Other health risks have not disappeared. A disease-specific health cover is not a great investment in the long run.
So, the ideal way would be to combine a comprehensive health policy with supplementary policies as extra protection.
The writer is a journalist with 14 years of experience