As the number of positive cases crosses the 12,000 mark, the treatment of the infected
individuals has led to a lot of debate among insurers as the government began allowing the private sector hospitals to provide their services to lessen the burden on the public sector and government hospitals.
“IRDAI Notice and Government Coverage”
The Insurance Regulatory Development Authority of India (IRDAI) had issued a circular stating that the treatment for the novel COVID-19 virus would be covered like any other illness “under products where hospitalization is covered”. It further directed that companies formulate policies to cover the cost of admissible expenses, including treatment in the quarantine period. Many companies such as Aditya Birla Health Insurance have formulated specific policies designed to cover the infected individuals. The government has also stated that it will provide a medical insurance cover of Rs 50 lakh per person for those working on the frontlines, which aims to cover almost 20 lakh medical staff, doctors, sanitation and ancillary workers. Insurance Regulatory and Development Authority of India (IRDAI) in January this year mandated all health and general insurance companies to offer a standard product called the Arogya Sanjeevani
policy starting 1st April 2020. As many as 29 insurers are now offering this product which comes with a maximum sum insured of ₹5 lakh.
Many reports have surfaced of private institutions using this opportunity to extort larger amounts by abusing medication and bundling procedures as there are no restrictions or capping on the charging of treatment by private hospitals and labs.
Those infected by the COVID-19 have been classified into mainly three categories on the basis of infection level- mild, moderate, and severe. Ventilators are only required in the severest of cases where the individual’s respiratory system is badly damaged. Further, even the period of hospitalization is different for each category; mild category requires hospitalization of estimated 5.5 days, moderate requires around 7 days, and severe have been noted to be hospitalized for 11 days or more with at least 2 days in the Intensive Care Unit (ICU).
“GIC urges government to provide strict protocols”
As the costs of private hospital treatment reach almost Rs 6 lakhs and more, the General
Insurance Council sources have stated that the organization has appealed to the government to set certain protocols regarding costs and insurance cover to be provided by the insurers. These protocols also are required to ensure that private hospitals do not artificially inflate their rates which would act as a burden to insurance companies as well as the suffering individual.
Several administrative heads of different hospitals as well as insurance companies have stated that the costs are being artificially increased and patients are being exploited due to lack of strict regulations.
“Greed of Private Sector could burden insurance companies”
As public sector undertakings and the private sector manufacturers like Mahindra & Mahindra Group rush against the time to domestically manufacture cheaper medical supplies, ventilators and testing kits, and government efforts to provide facilities which are more affordable, the insurance companies are witnessing an increasing number of claims ranging up to more than Rs 6 lakh. As the number of cases continues to rise and private hospital treatments increase, these inflated bills could result in losses incurred by insurance companies. These insurers are now demanding that certain price restrictions and protocols must be followed to allow proper coverage of the infected individuals as well as safeguard the companies from failure and debt.
As the claims of private hospitals and labs continue to increase, government insurance policy, Arogya Sanjeevani scheme seems to be rendered insufficient to cover the costs.