Insurers compensate policyholders 45-80% of COVID claims

Only 45% to 80% of hospital bills related to medical treatment for COVID-19 are being recovered by health insurance policyholders from insurers.

Policyholders are caught in the crossfire between hospitals and insurers over medical bills, including charges for consumables like personal protection equipment (PPE) kits that are generally excluded from insurance coverage, according to a report in Times of India. Since last year, hospitals have increased their prices because of the use of PPEs. These consumables can account for around 25% of the total treatment cost.

Liberty General vice president and national claims manager for accident & health, Amor Saw, said, “On the industry level, the average COVID claim is INR140,000 ($1,920), the settlement is about INR95,000 of the claimed amount. We have seen almost 20% of the total bill attributed to PPE costs.”\

Officials at the General Insurance Council blame the hospitals for this situation of high out-of-pocket spending, pointing out a case where a hospital had overcharged for its services.

Processing of COVID-19-related claims

Separately, a lawmaker has written to Finance Minister Nirmala Sitharaman seeking a reduction in the turnaround time for the settlement of insurance claims from up to six months at present to the shortest possible period, among other measures. The change would help people amid the COVID-19 pandemic, reported Press Trust of India.

Congress Party MP Vivek Tankha, who sits in the upper house of Parliament, said the IRDAI and all insurance companies must have in place the necessary online infrastructure and platforms to accept and process all claims and related documents online only. Calling for a quicker claim processing time, he said, "Given the present situation, your good offices must step in to ensure that the present system does not continue, in as much as the extant rules by IRDAI dictate six months as the highest turnaround time for the disposal of claims, which simply cannot be countenanced at present.

"This needs mandatory review and redressal as families cannot be left in the lurch for six long months, more so in cases when the deceased is the sole breadwinner," he said.

He noted that some insurance companies were providing interim benefits while claims were being processed. If the same can be made a universal practice, being mandatory in cases where deaths are caused due to COVID, it will create a feeling of support in the common man by the government, he said.

Source: Asia Insurance Review