IC33 English Chapter 8 Notes

Chapter 8 – Health Insurance Policies

 

  • Health insurance can simply be defined as a contract between the insurer and the insured wherein the insurer agrees to pay hospitalisation expenses to the extent of an agreed sum insured in the event of any medical treatment arising out of an illness or an injury.
  • A health insurance policy generally covers the basic costs in case of hospitalisation due to any accidents/diseases/ illnesses which do not form a part of the permanent exclusions of the policy.
  • Health insurance can be used to address the risk of morbidity.
  • As per IRDA regulations issued in February 2013, 30 days grace period is allowed beyond the expiry date of the policy, for renewal.

The expenses covered under health insurance usually include:

  • Cost of room / bed Boarding expenses Nursing expenses Doctor’s fees Diagnostic tests
  • Operation theatre charges and
  • Expenses related to surgical appliances and the like
  • Inpatient: Insured who undergoes treatment after getting admitted in the hospital
  • Outpatient: Insured who undergoes treatment without getting admission/staying in the hospital
  • Day care centre: With the advancement of technology and medical science many complicated surgical procedures have been simplified and do not require more than a day’s stay in the hospital or less than 24 hours at times; for e.g., lithotripsy, cataract etc. The Centre where such procedures are carried out is known as day care centre.
  • Primary care can be described as the first point of contact for people seeking healthcare.
  • Third Party Administrators (TPA): Any person who is licensed under the IRDA (Third Party Administrators – Health Services) Regulations, 2001 by the Authority, and is engaged, for a fee or remuneration by an insurance company, for the purposes of providing health services.
  • Network provider: Hospitals or health care providers enlisted by an insurer or by a TPA and insurer together to provide medical services to an insured on payment by a cashless facility.
  • Portability: Right accorded to an individual health insurance policyholder (including family cover), to transfer the credit gained for pre-existing conditions and time bound exclusions, from one insurer to another insurer or from one plan to another plan of the same insurer, provided the previous policy has been maintained without any break. Moving between policies of the same company itself has been excluded.
  • Pre-existing conditions: These refer to manifestation or occurrence of illness/injury for which treatment was required during a pre-determined time. These can be covered after a certain waiting period.
  • Senior citizen: It means any person who has completed sixty or more years of age as on the date of commencement or renewal of a health insurance policy.
  • Health plus Life Combo Products: They mean products which offer the combination of a life insurance cover from a life insurance company and a health insurance cover offered by non-life and/or standalone health insurance company.
  • There are certain waiting periods (usually 48 months) with regard to pre-existing diseases (PEDs), some specific illnesses like cataract, some procedures like hysterectomy etc., for a defined period which usually range from one year to four years.
  • There are insurers, who cover HIV positive persons. A few also offer non-allopathic treatment up to a percentage of sum insured. Most of the insurers offer a wide variety of products.
  • Domiciliary hospitalization: This generally refers to medical treatment for a period exceeding three days for such illness/ injury which in the normal course would require treatment at the hospital/ nursing home, but was actually taken whilst confined at home in India under any of the following circumstances namely:
  • The condition of the patient is such that he/ she cannot be removed to the hospital
  • The patient cannot be removed to hospital/ nursing home for lack of accommodation therein
  • Family floater policies: Family floaters usually cover husband, wife and two children. Some policies cover more than two children, parents and parents in law as well. The coverage for the entire family is limited to the sum insured opted for. The total premium payable for family floater policies is less than the total premium payable for non-floater policies where separate sums insured are applicable for each family member.
  • Health Insurance policy can be obtained by an individual for himself, his/her family, or by a group.
  • Cash-less facility: A facility extended by the insurer to the insured where the payments, of the costs of treatment undergone by the insured are directly made to the network provider by the insurer to the extent pre-authorisation approved.
  • To avail the benefit of cashless facility, insurers issue an identification card to the insured within 15 days from the date of issue of a policy, either through a TPA or directly. The validity of the card coincides with the term of the policy and would be renewed from time to time. Insurers may issue a smart card instead of an identity card.
  • If the insured does not opt for cashless settlement, he has to pay directly to the hospital. The bills have then to be submitted to the insurer/ TPA and the claims will be reimbursed.
  • Free look period of 15 days from the date the documents are received by the customer. During this period, the customer can decide whether or not to continue with the policy.
  • 30 days grace period is allowed beyond the expiry date of the policy, for renewal. Life time coverage on all policies made mandatory.
  • All health policies are to have a provision for nomination.
  • There has to be standardization of customer information summary.
  • A one page summary of benefits, terms and conditions has to be issued for each product.
  • Group health insurance policy is available to groups/ associations/ institutions/ corporate bodies, provided they have a central administration point and are subject to a minimum number of persons to be covered. The group must belong to a category that is approved.
  • Group includes family floaters and any policy with more than one insured person.