After the Insurance Regulatory and Development Authority of India (IRDAI) issued draft guidelines for a standard health insurance product across all the insurers, it is important for consumers to evaluate and understand how beneficial this step will actually be.
As per the draft, the standard health product will cover both pre and post hospitalisation expenses of the customers and will also give them the choice of taking treatment under the AYUSH scheme – Ayurveda, Yoga, and Naturopathy, Unani, Siddha, and Homoeopathy.
However, treatment under the AYUSH scheme would remain subject to sub-limits. The entire rationale behind developing a standard health cover is to give each one access to at least basic health care so that people do not grapple with inequality, especially in the healthcare sector.
One of the most crucial reasons for introducing standard health insurance is that while on the one hand, India has swanky, five-star hospitals that feature world-class amenities, on another hand there are hospitals that lack even the minimum healthcare standards.
And the only solution to remove this disparity is a standard health policy across all insurers that is affordable and within everyone’s reach. As per the industry experts, healthcare must always remain the priority and especially for a country like India that has a healthcare system ranked at 112 out of 190 countries.
While taking a broader look at health insurance, it is quite easy to understand that people can save aplenty when availing quality treatment at a hospital of their own choice. Initially, it would be good to have a standard insurance cover to help the one in need under a subsidised scheme.
Over the last two decades, the development in medical science has undoubtedly made it possible to cure many life-threating diseases; however, the cost of their treatment is so high that it is almost impossible for everyone to afford them.
The cost has increased at a double-digit pace, overtaking even the average inflation in both, urban and rural areas. As more and more people head towards private hospitals for treatment, they face the burden of rising medical bills. This is why it is important to introduce a standard product that is affordable and under everyone’s reach. Healthcare in India must be made affordable and accessible to all, for the overall development of the country.
Some of the salient features of the product include outpatient consultation treatment which is currently missed by many retail products.
Wellness Incentives and Cumulative Bonus is yet another important feature of the plan. The product is also expected to cover plastic surgery required due to a serious accident though it remains subject to the co-payment feature. Currently, 5% of co-pay will be a part of the policy feature. While the minimum sum insured in the standard policy will be Rs 50,000, the maximum limit will be Rs 10 Lakh. A No-claim bonus of 5% can be availed up to a maximum of 50% provided no claim is made.
Though people these days do not particularly prefer policies with a co-pay clause, the acceptance of standard health insurance product amongst people still remains known.
While a standardised product will make it easier for the consumers to understand and compare health insurance, eventually it may also make porting health insurance policies convenient and easier amongst different insurers.
Though there is still a lot of refinement required in the guidelines w.r.t features like capping on room rents, the cost of treatment, etc., the efforts being put on drafting a standard health plan are welcome. Another important truth is that for ages, health insurance in India has remained a push product. That is why it is very important that apart from introducing a standard product, it is equally important to educate the customers and spread awareness around the product.
The proposal from IRDAI is sure to improve access to healthcare without having to go through the complex process of choosing the right insurer. The current process of selecting the right product is very difficult for people who just wish to have a basic health plan provided the plethora of choices available in the market.
The standardisation will help policy seekers to just focus on insurer network, premiums, benefits, and quality of services. Most importantly, the industry will certainly witness increased penetration in the sector.
(Views expressed in this article are a personal opinion of Amit Chhabra, Head- Health Insurance, Policybazaar.com.)
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