Non-covid claims are also piling up.
ET Wealth explores the reasons why your claim is not being admitted or you are bearing a large chunk of the medical bill.
Disparity between number and size of claims settled indicates huge deductions by insurers
Data as on 11 Sep. Data includes top 10 insurers with highest Covid claims. Source: GIC
The reasons for high deductions in claims
1. High room rents
- Some hospitals are charging a steep premium for rooms for covid patients, owing to high costs of maintaining isolation wards, sanitization etc.
- If you opt for a room charging more than allowed in your policy, you will see huge deductions in claim settlement amount.
Proportionate deduction applies on all associated medical expenses. So, if one exceeds room-rent limit by opting for a room costing Rs 4,000 per day instead of mandated room costing Rs 3,000 per day, reimbursement for all other medical expenses also get reduced to the extent of 33%. Policyholder has to bear the balance expenses from his own pocket.
What to do
- At time of hospitalisation, ascertain if room rents are linked to other expenses. Stick to a room with rent up to permissible sub-limit.
- Opt for a policy without room-rent sub-limit or buy as an add-on cover. However, this comes at higher premium.
NOTE: As per revised Irdai guidelines, these costs will not be subject to proportionate deduction:
Cost of pharmacy Cost of implants and consumables or medical devices
Cost of diagnostics ICU charges
Further, policy conditions will have to specify that the proportionate deduction would be applied only in case of a hospital that follows differential billing practice based on room category.
This applies for new policies filed by insurers on or after 1 October 2020,
and for existing products which are due for renewal from 1 April 2021.
2. Exorbitant charges
Some hospitals may charge more for other expenses. Insurers may only settle claims based on predefined rates recommended by the General Insurance Council, resulting in significant cuts in the claim amount.
Cost per day ceiling for various types of stay
NOTE: Above rates are for the four metros. For other state capitals and rest of the country, rates are capped at 90% and 75% of above rates, respectively. Further, rates are applicable for tertiary hospitals with more than 100 beds. For nursing homes with 50-100 beds, ceiling rates are at 80% of above rates. For standalone hospitals with less than 50 beds, ceiling rate is capped at 65% of above rates. Each hospital to have an operational ICU and operating theatre. The settlement under the Covid-19 insurance claims shall be subject to the limits and terms of the policy of respective insurer.
3. Minimum 24 hours hospitalisation
- In most health policies, a minimum 24 hours of hospitalisation is required for a claim to be accepted.
- This is barring a few daycare procedures, which are explicitly mentioned in your policy documents.
- If a Covid patient chooses to be treated at home instead of getting hospitalised, he will likely not get reimbursed, unless specifically covered in policy.
4. Waiting periods
- Newly issued policies typically carry a waiting period of up to 2-4 years for any pre-existing diseases during which any related claim will be denied.
- Some policies have distinct waiting periods for treatments towards specifi c illnesses—separate from initial waiting period.
- This is apart from standard initial waiting period of up to 30 days during which no claims are admitted. Covid-dedicated plans also come with 15-30 day initial waiting period.
- Co-payments are where you will have to pay part of the claim in some situations while the insurer pays the rest.
- For instance, if you have opted for 20% co-pay, your insurance provider will bear 80% of the claim amount, while the rest will have to borne by you.
- Typically, co-payment is higher for policyholders in higher age groups. If you opt for a lower co-payment amount, you will have to pay higher premiums.
NOTE: Ensure that you have adequate finances to cover your share of medical bills before you opt for a plan with co-pay options. It is better to opt for a plan without co-pay clause.
- Apart from room rent limits, your policy may cap how much is payable for a particular illness.
- Even if your sum insured is high, you may not be able to claim entire cost of treatment owing to sub-limit on specific medical procedures.
- Sub-limits are used for procedures like cataract, total knee cap replacement, kidney dialysis etc.
NOTE: Go through sub-limit clauses carefully. Higher sum insured does not assure 100% coverage.
- Health plans will exclude certain expenses outright from scope of coverage.
- Most health claims don’t cover maternity or participation in adventurous activities, abuse of intoxicants like alcohol etc.
- Several general expenses during hospitalisation are not claimable like registration and discharge charges, ambulance charges, toiletries, etc.
- For Covid, if you quarantine at a non-recognised centre for treatment, medical expenses may not get covered.
- Also, getting hospitalised without recommendation of a qualifi ed doctor will not be permitted as admissible claim.