Synopsis–That’s because insurers are not aligning payouts to realities of Covid treatment. Fine prints of most health policies exclude coverage of expenses on overhead consumables, which are high in case of Covid thanks to use of PPE kits, masks, gloves, etc, as well as homecare treatment costs and telemedicine.
Indians’ insurance woes aren’t ending. ET had reported buying insurance will become tougher this financial year (A New Cover Story in Times of Covid, May 18). Now, as per official data, Covid patients are paying nearly 40% treatment costs from their pockets.
That’s because insurers are not aligning payouts to realities of Covid treatment. Fine prints of most health policies exclude coverage of expenses on overhead consumables, which are high in case of Covid thanks to use of PPE kits, masks, gloves, etc, as well as homecare treatment costs and telemedicine.
State-wise claims data accessed by ET shows that as on May 14, a total of 14.82 lakh Covid-19 claims worth Rs 23,000 crore were reported of which 12.33 lakh claims worth Rs 11,700 crore have been settled by insurers since the pandemic.
While claims are settled with a lag of two to three weeks which explains the mismatch in reported vs settled claims, the disparity between average reported claims and average settlement amounts have raised concerns over the effectiveness of mediclaim covers in a pandemic.
No Standard Treatment Protocols
An analysis of the data shows that the national average coronavirus claim size – a proxy for average treatment cost — is Rs 1.54 lakh. Against this, an average of Rs 95,622 is being settled. This means an insured Indian on an average is shelling nearly 40% of the treatment costs from her own pocket.
This data is compiled daily by the General Insurance Council of India (GIC) and reported to sector regulator Irda.
“Most indemnity insurance policies mandate at least 24 hours of hospitalisation to be eligible for a claim. Especially during the second wave, most patients were treated at home. The costs of oxygen and setting up home ICUs might be excluded from coverage,” said Srinath Sridharan, an insurance industry veteran and a visiting fellow at ORF. “Additionally, the contagious nature of the virus means that hospitals are spending more on overhead consumables for the hospital staff as well. These costs are being reflected in the bill. Insurers could be treating these expenses as exclusions as well,” Sridharan added.
Among states most affected by Covid, the proportion of personal payment of treatment costs vary — Maharashtra (37.4%), Gujarat (36.8%), Karnataka (38.2%), Tamil Nadu (42.7%) and Delhi (35.8%).
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