New regulatory regimes to fast forward health insurance under COVID-19

There is a growing concern about the effects of the ongoing pandemic on not only our physical or emotional wellbeing but also our finances. The economic slowdown and subsequent fear of job losses could also affect the decisions of many to seek medical care. This is the reason that the pandemic has resulted in awareness among the masses about the benefits of a health insurance cover not only in tiding over short-term medical expenses but also to save their hard-earned money for rainy days.

Insurers have quickly reinvented themselves through the adoption of new technologies, furthering their digital capabilities and delivery models to provide a seamless experience to customers. The resultant 30-40 percent uptake in health insurance policies across the board, with digital-savvy insurers recording a significant jump, was a game-changer in many ways. Apart from reinventing through new technologies, several of the recent regulatory guidelines have also helped the industry in fighting the pandemic.

Wellness Guidelines

The Indian regulator has recently issued guidelines to mainstream the concept of wellness with a focus on preventive measures, instead of traditional curative aspects. While few insurers were already offering wellness products even before the guidelines, the move has been well supported by the industry which was ready for the transition. The purpose of the policy intervention was to promote healthy living by incentivizing customers through financial benefits such as reward points. The insurers are also encouraged to offer coverage for outpatient consultations, health check-ups, diagnostic tests, and medicines, among others.

E-policies

Initially, with the outbreak of COVID-19, one of the key challenges was to deliver the physical policy document and the hard copy of the proposal form to a customer. The recent guidelines helped in moving away from wet signatures on physical forms, urging insurers to take consent through a one-time password sent to the customer’s mobile number, validated by the insurer.

Standardisation

With a host of health insurance products available in the market, consumers often find the selection process complicated and time-consuming. While the industry was always looking for such guidelines to bring transparency in the system, IRDAI’s recent measures have simplified the policy structure. For instance, from October onwards, the terms and conditions, waiting periods and exclusions across health insurance policies have been standardized. This not only brings in more transparency but enhances the trust level between the insurer and the customer. Similarly, a moratorium clause has been introduced across all policies, under which insurers cannot contest a claim after 8 years into a policy, barring cases of fraudulent claims.

Moreover, the scope of coverage in health conditions, such as age-related macular degeneration, HIV, Alzheimer’s, mental illnesses, internal congenital and genetic diseases, are also covered in a policy. Considering that modern channels for doctor consultations, such as telemedicine, help consumers access quality and effective treatment, the health policies are now required to cover the cost for such practices.

Corona Kavach

While the basic indemnity policy offers a first layer of protection from all types of risks, for extensive coverage of an ailment the need for disease-specific policies as the second layer of protection is becoming increasingly important. These policies offer a higher sum insured at an affordable premium, as they cover only a single disease.

Realizing the need for a simple and affordable plan to cover treatment and hospitalization costs of COVID-positive individuals, the IRDAI asked insurers to launch a standard short-term coronavirus-specific policy covering both hospitalization and home treatment for up to 14 days per incident. Launching the COVID-specific policy in such a short span of time was not an easy task for insurers but given the demand of the situation, the insurers delivered to their customers’ expectations.

Early trends indicate that the uncertainty around COVID-19 is leading more people to buy health covers. With the flurry of reforms and innovations by the industry, policyholders are now not only expected to manage risks better and buffer against shocks but also ensure a healthy future for themselves.

Source: CNBC Tv18