IRDAI directs insurers to standardise health policies, include out of pocket expenses within scope of coverage

Country’s insurance regulator has directed insurers to standardise all terms of policies while also including telemedicine facilities and expenses incurred by policyholders for purchase of consumables, pharmacy, medical devices and cost of diagnostics to be included in the scope of coverage of health policies.

These directions were issued in three separate circulars on Thursday by Insurance Regulatory and Development Authority of India.

These revised guidelines broadly are directed at some of the key areas of grievances faced by policyholders both on account of mis selling of indemnity-based health policies and increasing out of pocket expenses incurred by patients during treatment despite being under scope of coverage.

The insurers are expected to implement these directions on new products filed after October 2020 and revamp all existing policies before they are due for renewals by the end of the ongoing fiscal year.

On standardisation of health policies IRDAI has asked the insurers to simplify the wordings of terms and clauses of the policies and “ensure uniformity across the industry.”

These guidelines cover a range of aspects such as clauses defining grounds for termination of policies, standard penal rates on late settlement to be incurred by insurers, portability of plans and even treatment of fraudulent claims.

IRDAI, separately, has also asked insurers to not disproportionately charge policyholders on ICU expenses and define clearly all out of pocket expenses and its scope of coverage.

This was a major case of contention as some hospitals have been charging patients exorbitant rates on medical devices and appliances such as PPE kits and additional beds for patients diagnosed with covid-19 pandemic which was not being covered by their insurance policies as they were being classified as ‘associate medical expense.’

“This guideline from the regulator is a welcome move as it will reduce the out of pocket expenses of the customers,” said Bhaskar Nerurkar, Head – Health Claims, Bajaj Allianz General Insurance. “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.”

Separately, the insurers will also have to treat coverage of treatment through telemedical facilities under the scope of coverage as per the guidelines issued by Medical Council of India on March 25th.

“Provision of allowing telemedicine shall be part of claim settlement of policy of the insurers and need not be filed separately with the Authority for any modification,” IRDAI said in a circular addressed to all general and health insurers. “However, the norms of sub limits, monthly/ annual limits etc. of the product shall apply without any relaxation.”

[Source – Economic Times]


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