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Claim and counter-claim: health insurance key point of debate in pandemic


Anubhab Datta is grieving and waiting. Grieving for his father who died of Covid in May this year, when the second wave was peaking, and waiting for the insurance agency to reimburse the hospital bills and death claims.

Closure after such a monumental personal tragedy is still a long way off. But Dutta said he is also still recovering from the shock that the medical insurance policy of his father, ironically a life-long insurance professional who planned ahead for the sake of the family, did not work as he thought it would.

The Kolkata-based software professional, the sole earner of the family after his father passed away during treatment, said he had been sure his father’s medical insurance would make things smoother rather than more complicated. But that was not to be.

Instead, Dutta was in for a rude awakening. He had to break into the family’s savings and use a credit card to clear the bills worth Rs 2.7 lakh. The Kolkata hospital not just denied cashless mediclaim facility but also asked for Rs 30,000 to be deposited at the time of admission.

“There were also places that asked for Rs 50,000 and even Rs 1 lakh deposit. He was admitted to this particular nursing home only after I promised to deposit the Rs 30,000 first thing the next day,” Dutta recalled. It was an unexpected expense and they did not have the amount readily available at the time.

As the deadly second wave ravaged the country, health systems failed, leaving not just those uninsured at the mercy of their savings or benevolent friends, but also those like Dutta’s father who had a policy he believed would see him through any exigency.

The Duttas are not the only family waiting.

Over the months of a continuing pandemic, the issue of health insurance and the problems that many families and individuals have faced with their policies has emerged as one of the key points of an anguished debate.

In many cases, frustration spiralled because hospitals were not honouring cashless treatment as promised by the policy document during the second wave.

“What’s the meaning of health insurance if we cannot rely on it at a time of need?” asked Chirag Sethi, a Delhi-based gym owner. His father-in-law fortunately recovered from Covid after 10 days in hospital in May but is still waiting for the reimbursement of the Rs 2.5 lakh cash payment he had to make.

According to a recent report by the General Insurance Council, a representative body of 34 general insurance companies, over 3.06 lakh Covid-related claims, amounting to Rs 10.7 crore, were pending with insurance companies as of August 6.

Health insurance companies received a total of 23.06 lakh claims from April 2020 till August 6, 2021, of which 13.19 lakh claims worth Rs 14,783 crore were received since April 1 this year, it said.

But why are claims being rejected?

Giving the flip side of the picture, companies in the business said there are various reasons, including patients hiding pre-existing conditions or raising a claim before the waiting period of certain days after purchasing a policy.

“While Max Bupa pays the vast majority of claims, there are times when a few claims are denied. These are due to policy conditions, exclusions, waiting periods or fraud. Also, most health policies available in the market don’t cover out-patient treatment. In some cases, hospitalisation for 24 hours is required to claim the benefits,” a Max Bupa Health insurance company spokesperson told PTI.

The company, now rebranded Niva Bupa Health Insurance, received 13,100 Covid hospitalisation claims between January-May 2021 and settled claims worth Rs 154 crore during the second wave.

According to the company, people spent approximately Rs 1.4 lakh on average for Covid treatment, and the hospitalisation cost went as high as Rs 55 lakh for a single hospitalisation in some cases.

The cost of buying a health insurance of Rs 5 lakh cover can cost anywhere between Rs 5,000 to Rs 10,000 depending on the company. For a Rs 50 lakh term insurance, the amount a person pays in annual premium falls in the same range. However, the premium amount increases with age in both the cases.

While Bajaj Allianz Life onboarded 3.5 lakh new clients in FY 2020-21 compared to 2.3 lakh previous year, Max Bupa Health Insurance registered a 128 per cent increase in sale of policies in the first five months this year.

Bajaj Allianz Life Insurance company settled 1,400 death claims amounting to Rs 116 crore in FY 2020-21,

“There was an increase in demand for term insurance and health plans during the first wave of the pandemic as the risk perception increased in the country. With the second wave, we witnessed a surge in the demand for term plans in April and May, with customers opting for higher sum assured as compared to last year,” Tarun Chugh, managing director and CEO of Bajaj Allianz Life, told PTI.

“With the increase in the number of Coronavirus cases in the country, especially during the second wave, there has been a growing awareness regarding the importance of health insurance plans. Other reasons motivating people to invest in health insurance is increasing medical inflation and tax benefits,” the Max Bupa spokesperson said.

He added that during the first five months of 2020, a total of 78,000 policies were sold which increased to 1.77 lakh in 2021 during the same period.

The COVID-19 pandemic has raised awareness, whether through paranoia or precaution, for the need for health and term plans.

The benefits of having a health cover are immense as Delhi University student Suraj Kataria realised after his mother fell sick with COVID-19.

Suraj and his sister managed to pay off Rs 4 lakh after receiving help from friends, breaking into their savings and running a fundraiser.

“Once we got home we decided to buy health insurance. It was a major mistake to not have it earlier, else we would have been able to get better treatment for our mother,” the 25-year-old said.

The size of the life insurance industry, which includes 23 private companies, in terms of individual new business premiums as on FY21 is about Rs 1.14 lakh crore, according to Bajaj Allianz Life.

The country has recorded 4.32 lakh deaths and over 3 .22 crore infections as of August 17. In May alone, at the peak of the second wave India saw 1.23 lakh fatalities — a staggering portion of the total casualties.



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