Covid patients pay 40% medical cost from pocket despite insurance

Covid-19 patients are paying as much as 40 per cent of treatment costs from their pocket despite health insurance. Insurers have been selling short-term COVID-specific policies -- Corona Kavach and Corona Rakshak -- in bulk since last year.

Low premium, as specified by insurance regulator IRDA, made these policies affordable. However, the second wave of Covid-19 has led to a massive spike in the number of insurance claims. Around 50 per cent of such claims are getting rejected while those whose claims are being processed are receiving only 60 per cent of the amount.

A big reason behind a difference in insurance claims and settlement amount, and rejection of a large number of claims, is unpreparedness of insurers who did not anticipate such a large influx of claims. The exclusion of the overhead consumables, including PE kits, masks and gloves, from the policy and different treatment protocols have also forced patients to bear additional costs at their own expense.

Even if a patient's policy is eligible for cashless settlement, the insurance companies are not offering it. They have to pay the full amount themselves and file the reimbursement later. Even Finance Minister Nirmala Sitharaman has taken cognisance of it. She has spoken to the IRDAI chief to look into the matter. Besides, in some cases, the private hospitals are charging much higher prices than what the government has prescribed and the insurance companies are refusing to pay those.

Also read: No cashless settlement, arbitrary pricing: How health insurers are settling Covid claims?

Moreover, they are rejecting renewal of such policies despite the regulator having told insurers to renew these policies up to September 30. As per the IRDA rules, selling and renewing Corona Kavach policy is mandatory for all insurers, while it's an option in cases of Corona Rakshak policies.

State-wise data on Covid insurance claims till May 14 shows total 14.82 lakh Covid insurance claims worth Rs 23,000 crore have been made, out of which 12.33 lakh claims worth Rs 11,700 crore have been settled so far, The Economic Times reported. Also, patients are facing at least two-three week lag in the processing of claims and settlement. This has also caused disparity in claims and settlements.

The General Insurance Council of India (GIC) data shows the average out of pocket payment ratio for Telangana is highest at 47.7 per cent, followed by Tamil Nadu at 42.7 per cent. Gujarat has seen an out of the pocket ratio of 38.8 per cent; UP 37.6 per cent; and Karnataka 38.2 per cent.

The data also shows that an average treatment cost for Covid-19 patients is Rs 1.54 lakh, while claim settlement is around Rs 95,622, showing the remaining amount, about 40 per cent, is being paid by patients. Those whose claims are getting rejected on several grounds have the option of filing a complaint within 15 days. If still, it doesn't happen, you can write to the ombudsman or directly to the regulator IRDA.

Also read: COVID-specific policies see less than 50% claims settlement

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