Amit Chhabra of Policybazaar summarises the changes in health insurance in 2024 and the gaps that need to be addressed in the future
The year 2024 witnessed several regulatory changes in the health insurance industry implemented by the IRDAI, and also product innovation, benefitting customers. As the year draws to a close, we interacted with Amit Chhabra, CBO – General Insurance, Policybazaar, to highlight the changes and impact on customers. We also discuss the gaps to be met to improve health insurance.
Q
One big change this year in health insurance was insurance for all ages and all diseases. How is it panning out?
The essence of the regulation is that the regulator wants to promote all insurance companies to provide health insurance to everybody. Firstly, hospitalisations have become a lot expensive as a lot of modern treatments have come up. Secondly, we are also seeing a higher rate of disease incidence. With all this, health insurance is becoming an extremely universal need for everyone.
In such a scenario, the regulators want to promote insurance companies to offer health insurance to everybody. One gap was that senior citizens didn’t have as many options as they should have had. To fill this gap, the regulator said that insurance companies must offer products supporting up to 99 years of age for senior citizens who are at the most risk.
Similarly, for people who have pre-existing diseases, they were not able to get policies for themselves. The regulator wanted more and more people to have the same options for health insurance as others. Along those lines, the pre-existing diseases waiting period is now reduced to three from five years and moratorium period is reduced to five (after which claims cannot be rejected on non-disclosure). These allow people to claim health insurance much earlier. This has been implemented in word and spirit such that all policies, existing or new have to have three-year waiting period since October.
Q
How is the situation on the ground? Are senior citizens getting a better deal now? And if the pricing is expensive, it negates the availability of health insurance for the elderly.
On ground, we have seen a lot of positivity. Insurers are now offering products to all consumers. For instance, even at 99 years of age, you can get a ₹10 lakh sum insured plan which wasn’t available earlier. And now, there are plans built for specific diseases such as cancer, heart conditions, etc. In terms of availability of options, it has significantly gone up. Somore consumers have options to buy health insurance.
On the issue of pricing, underwriting is the prerogative of the insurance company. But a lot of underwriting innovation has happened. Compared to earlier, insurance companies can offer co-payment, sub-limits or permanent exclusions which allow them to offset higher risks and yet offer a policy to customers. Customers that would have been left out earlier are also getting insurance through such changes.
Q
On the claims part, the regulator has also insisted that reimbursement should be a rare phenomenon and cashless should be the preferred route. Also, claim processing should be completed in 2-3 hours. Have these been implemented?
A very critical initiative on that line is called cashless anywhere, where essentially even if a customer is not going to a network hospital, they can still get cashless. A customer has to inform the insurance company before hand or as early as possible in case of an emergency treatment. The insurance company can do a temporary agreement with the hospital to ensure cashless treatment.
On the claim turnaround times, it is important to understand that the delay is at the hospitalend and not at the insurer. There is a lot of paperwork from the hospital end between several departments such as nursing, pharmacy, surgery and others. Since most hospitals are not paperless, collating these and sending to the insurer causes the delay. To overcome this, one can go for a pre-approval of claims. Most treatments now are packages. So, for example, if somebody’s going for an open-heart surgery or an angioplasty or a knee replacement surgery and the procedure is pre-approved, it can be a seamless process.
One more development on the claims part is that customers are being rewarded by the insurer on a claim less year. Earlier, premiums were increasing for customers irrespective of their claim behaviour. From this year, insurance companies have been allowed to price premiums or offer substantial discounts based on claims made.
Q
A customer information sheet has been introduced this year. How does that help?
The genesis of this is that historically when a policy was bought by a consumer, they didn’t even have clarity on which plan they have bought, the waiting period, the kind of room allowed, etc. Some agent would have come to their house and sold the policy. When the customer making claims, it becomes an issue because the customer is not aware of the terms and conditions. Then this may lead to claim rejection.
The regulator introduced the customer information sheet which, in a simple language and format, summarises the policy to the consumer. This has been implemented this year.
Q
This year has seen many improvements, what are the other changes you would want to highlight?
The one other change is that insurance companies can now offer four-five year policies. This will allow customers to lock in on the premiums which otherwise would be subject to annual inflation.
On the product side, too, there have been several improvements including global coverage, renewal bonus and e-consultation. Now, health insurance can offer customisation at a mass level. The choice and wide-ranging offer allows everyone to customise their policy to their needs. This even extends to the coverage amount. With several insurance companies offering and there being a demand for such, ₹1-2 crore health insurance is within the reach of customers. While the average health insurance cover was ₹8-10 lakh till a few years ago, this has risen to around ₹20 lakh as a few customers are willing to buy high covers.
The product innovation will continue as well. The recent rise in FDI limits in insurance means that foreign entities need not look for local partners to enter the market. They can do so on their own, which will be positive for the industry.
Q
What are the gaps from a product or a regulatory perspective that can be improved on?
There have been many changes this year and it is tough to point a gap. But one regulatory gap is better coordination between hospitals and insurance companies. Considering that these are under two different regulators, this may be tougher to fill. But these two industries need to work together for a better customer experience.
On the product side, OPD coverage is still nascent and can be improved. Out-patient consultations need to be covered for better health insurance. The other gap from a product perspective is the missing middle — the class that is not covered by government schemes, but is not able to afford the insurance by themselves. A few initiatives have been done, but a lot more has to be done to include the missing middle in health insurance.
Q
What can be done to improve claims experience?
Better product awareness can minimise the gaps in claims experience. The policyholder, for instance, is not aware of the sub-limits or the room rent clause, which leads to sub-optimal claims. Also, health insurance companies are paying claims, but it is coloured by the case where the claim is not met. The regulator is also having a close watch on the claims and insurance companies will have to document why a claim is not met. So, better product awareness can minimise the drop in claims.
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