Shielding Covid patients from hospital-insurer crossfire

When octogenarian Jharna Dasgupta developed Covid-19 symptoms, her family members were not sure if they should take her to a hospital as she had heart and kidney ailments too.

Eventually, they decided to go with home-based care and tied up with Kolkata’s Peerless Hospital for support. Two weeks on, Dasgupta has reported negative for SARS-CoV-2 and is back to her regular lifestyle.

Home care is becoming popular, given the shortage of hospital beds and medical staff across cities, due to the pandemic. And health insurance companies have been quick to pick up on the trend and extend cover for home care, even as they adapted to other similar patient needs in Covid times.

Insurance cover for treatment at home is contrary to common practice, as medical insurance policies usually pay for a person only on hospitalisation. Outpatient visits or diagnostic tests were not covered by the insurance policies or had to be bought as add-on covers at an additional premium.

The average claim for Covid-related hospitalisation ranges between ₹1.09 lakh and ₹1.12 lakh, more than three times what insurers paid for hospitalisation claims following dengue or other viral infections. Comparatively, a 14-day home-care package offered now by most hospitals and service providers works out to about ₹15,000, without taking medicines into account — a convenient option for patients and insurance companies, given the smaller claim amounts they now have to pay, or reimburse.

Covid-specific

Interestingly, all existing comprehensive health insurance plans cover Covid-related treatment, at hospital and home (see box). And the regulator, IRDAI (Insurance Regulatory and Development Authority of India), has allowed insurance companies to come up with two pandemic-specific policies — Corona Kavach and Corona Rakshak, to cover people who were previously uninsured or insured for a lower sum.

Corona Kavach covers hospitalisation expenses between ₹50,000 and ₹5 lakh. This benefit is extended to home care up to 14 days, on doctor’s advice. The average premium ranges between ₹450 and ₹8,000 depending on the coverage limit, age and time frame of the policy.

Corona Rakshak is a fixed benefit plan, where a policyholder needs to be hospitalised for at least three days, to be paid a fixed amount by the insurance companies. The coverage here ranges between ₹50,000 and ₹2.5 lakh. The premium to be paid in this case could be slightly less on the upper side since its coverage is only up to ₹2.5 lakh.

The downside for both covers, though, is the age cut-off at 65 years.

Amit Chhabra, Head (Health Insurance), Policybazaar.com, says insurance companies have sold close to 40 lakh pandemic-specific policies, of which Corona Kavach accounts for nearly 90 per cent. “Corona Kavach is a great plan for somebody who cannot afford a comprehensive health policy, and given the current scenario (with job losses and salary cuts), affordability is the biggest challenge,” he says.

Dos and Don’ts

Average treatment cost is seen to hover at about ₹1.10 lakh, but it could “go as high as ₹7-8 lakh depending on the severity of infection, length of stay and type of accommodation (ICU being more expensive),” says Dr S Prakash, Managing Director, Star Health and Allied Insurance, while stressing why families should go for health insurance.

P Nandgopal, Founder and Chief Mentor, Insurance Inbox, points out that the pandemic has changed many things on the ground. The room rent, doctors’ fee, etc, levied by hospitals have increased due to the additional Government-mandated safety protocols that they need to follow. While some of it is “reasonable”, some hospitals have been “overcharging”, he observes.

“A person infected with Covid should look for a hospital that is competent for providing Covid treatment, whether government or private,” he says. Pointing to the fear patients have of designated Covid hospitals, he adds, “these hospitals are equipped with the right kind of treatment protocol and hence should be preferred over others.”

Patient experiences reveal that sometimes they are not admitted into hospitals despite having insurance, as hospitals reportedly apprehend late payment by the insurance company. Dr Prakash suggests that hospitals and insurance companies agree on package and standard costs for Covid treatment. Sanjay Datta, Chief Underwriting, Claims & Reinsurance, ICICI Lombard General Insurance, agrees with the suggestion. Discussions are under way to arrive at a common ground in terms of referral rates both for reimbursement and cashless treatment, he says.

This is a much-needed prescription to protect patients from getting caught in the crossfire between hospitals and insurance companies, in what are already challenging times.

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