Insurance and Regulatory Development Authority of India (IRDAI), on 24th July 2018, announced that it is working towards minimizing Health Insurance exclusions. IRDAI has been frequently issuing guidelines on standardization of Health Insurance. It also works on bringing about transparency in health insurance plans.
According to the 2017 Global Medical Trends Survey, healthcare costs in India have increased by 20%. Also, according to the National Health Profile 2018, public expenditure on health for an individual has gone up by 100%.
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Only 14.1% of people in rural areas and 18.1% of people in urban areas are covered by any kind of health insurance. (A report made by National Sample Survey Office [NSSO]). In spite of an alarming rate at which medical costs are increasing, health Insurance has a low penetration in India. Why?
Among other reasons like the tendency of people to assume that they will not fall sick, there are other factors responsible for this:
Every Health Insurance Provider offers benefits at their own discretion. ‘X’ may offer to cover doctor’s fees but ‘Y’ may not. As of now, there is no great degree of standardization in Health Insurance. Nonetheless, following are some of the common benefits offered by most Health Insurance Providers:
Exclusions are illnesses or diseases which are not covered under health insurance policies. Following are the common exclusions:
On Tuesday, IRDAI announced a consumer-friendly move which will in turn increase health insurance penetration in India. It has started working towards minimizing health insurance exclusions.
IRDAI issues guidelines on health insurance to:
Every insurer uses different terminologies in health insurance policies. Lack of standard nomenclature, procedures, products offered, exclusions, treatment of critical illness; and so on are the problems faced in this industry. Consumers find it difficult to digest the concepts and working of health insurance.
Therefore, IRDAI requires the Health Insurance industry to adopt a uniform approach when it comes to ‘exclusions’, be it incorporating ‘exclusions’ as part of a product, or the wordings of ‘exclusions’.
To realize this step, the insurance regulator IRDAI, has set up a 10 member committee to conduct a study and report in eight weeks time. Headed by Suresh Mathur, Executive Director for Health, Insurance and Regulatory Development Authority of India, the panel will examine the common exclusions of the health insurance policies.
The committee is required to:
The outcome of this panel/committee and the consumer-friendly moves undertaken by IRDAI, may enhance the scope of insurance coverage in the country. The report may prove to be a game changer in the Health Insurance industry.
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