This is expected to reduce the out-of-pocket expenses for customers buying health insurance policies.
In good news for health insurance customers, the insurance regulator said that costs related to pharmacy, diagnostics and implants, and medical devices will not be part of associate medical expenses. This means that this cannot be recovered as proportional deductions in case a policyholder opts for a higher room rent than what the policy allows.
This is expected to reduce the out-of-pocket expenses for customers buying health insurance policies. When policyholders pick a room in a hospital that has a higher rent than what is allowed in his/her health plan, the insurer only covers a proportion of a cost and the rest has to be paid by the individual.
In its guidelines, Insurance Regulatory and Development Authority of India (IRDAI) said insurers cannot recover any expenses towards proportionate deductions for these items. Typically, excess costs like implants and diagnostics are recovered from the patient as deductions.
The provisions of these guidelines will be applicable to health insurance products filed on or after October 1. All policy contracts of the existing health insurance products that are not in compliance with these guidelines have to be modified as and when they are due for renewal from April 1, 2021 onwards.
“Insurers are not permitted to apply proportionate deduction for 'ICU charges' as different categories of ICUs are not there,” said IRDAI. Insurers have been asked to clearly define the list of associated medical expenses for which proportional deductions are being made.
Bhaskar Nerurkar, Head-Health Claims, Bajaj Allianz General Insurance, said that this guideline from the regulator is a welcome move as it will reduce the out of pocket expenses of customers.
“Insurers will negotiate with their hospital networks to see that the increase in rates of the associate medical expenses with change in room category are in control so as to benefit the customer,” he added.
These guidelines have come amid the coronavirus outbreak in India where customers have complained about rising costs of medical procedures across hospitals.
