Health insurance scope to get wider but premiums may increase from October 2020

The health insurance premiums are likely to increase from October on account of new standardized clauses, say insurance experts.

These new clauses will be incorporated in the new policies filed by insurers on or after October 1, 2020, and for existing products which are due for renewal from April 1, 2021.

The health insurance premiums are likely to increase from October on account ofnew standardized clauses, say insurance experts. These new clauses will be incorporated in the new policies filed by insurers on or after October 1, 2020, and for existing products which are due for renewal from April 1, 2021.

The main aim of standardization is to help consumers in buying insurance, in a way making it easier to understand the terms and conditions. However, that will come at a cost.

“By paying little extra premium, health insurance products will become more inclusive, less complicated and more attractive for customers,” says Nirmal Bhattacharya - Chief Underwriter, Universal Sompo General Insurance Company. "The two most-cited reasons for these increases are government policy and lifestyle changes. Government programs like Medicare and Medicaid have increased overall demand for medical services—resulting in higher prices," he explains.

On the benefits of standardization, Bhattacharya says that this would not only create trust and confidence in the minds of the policyholders, but will also enable insurers to market their product easily and help reduce disputes during the claim settlement process.

"Removal of ambiguity in exclusions and inclusion of modern treatments methods such as oral chemotherapy, balloon sinuplasty, deep brain stimulation will widen the scope of health insurance. Treatment for mental illness, stress or psychological and neurodegenerative disorders have also been brought under the purview of health insurance," he explains.

This inclusion would have pricing impact on the basis of the increment in the procedure expenses.

Currently, insurers are using this time to revamp their offerings by adding new features and standardizing products, according to IRDAI’s guidelines.

"With rising medical costs, the minimum sum insured of Rs 50,000 could be reviewed taking into perspective parity with the cover of Rs 5 lakh provided by Ayushman Bharat and genuine customer need for adequate protection. As per the regulator, the standard product will be required to cover standard co-pay, wellness incentives, hospitalization (pre and post) expenses, Ayush treatment and cumulative bonus which may attract a new set of consumers," he opines.

Meanwhile, Anand Roy, Managing Director of Star Health and Allied Insurance says that they are yet to take any decision on the premium increase.

"As a company, we don't have any plans to increase the price as of now. We are still evaluating the new clauses proposed by IRDAI. However, there are high chances that premiums may rise across the industry," he adds

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