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Context

• The Insurance Regulatory and Development Authority of India (IRDAI) has introduced significant changes to health insurance regulations through a comprehensive Master Circular on Health Insurance Products, consolidating and repealing 55 previous circulars.
• This new Master Circular centralizes all policyholder entitlements, aiming to streamline and simplify health insurance policy norms.

Major Changes Introduced by IRDAI for Health Insurance Policies

Enhanced Claims Experience

• Seamless and Faster Claims: The IRDAI has introduced measures to ensure a seamless, faster, and hassle-free claims experience for policyholders.
• Enhanced Service Standards: These measures aim to improve service standards across the health insurance sector.

Three-Hour Final Authorization

• Quick Authorization: Insurers must grant the final authorization within three hours of receiving the discharge request from the hospital.
• Immediate Discharge: Policyholders shall not be made to wait for discharge from the hospital.
• Penalty for Delay: If there is any delay beyond three hours, the insurer will bear any additional charges incurred by the hospital from the shareholder’s fund.

Claim Settlement in Case of Death

• Immediate Processing: In the event of the policyholder’s death during treatment, the insurer must immediately process the claim settlement request.
• Release of Mortal Remains: The insurer must ensure the immediate release of the mortal remains from the hospital.

100% Cashless Claims

• Goal for Insurers: Insurers are urged to achieve 100% cashless claim settlements in a time-bound manner.
• Emergency Authorization: In emergencies, insurers should decide on cashless authorization requests within one hour.
• Implementation Deadline: Insurers must put necessary procedures in place by July 31, 2024, to meet this goal.
• Dedicated Help Desks: Insurers may arrange for dedicated help desks at hospitals to assist with cashless requests.

Other Changes Introduced by IRDAI

Wider Choices for Policyholders

• Diverse Products: Insurers are encouraged to offer a wider range of products, add-ons, and riders to cater to all ages, regions, occupational categories, medical conditions/treatments, and all types of hospitals and health care providers.

Flexibility with Multiple Policies

• Choice of Policy: Policyholders with multiple health insurance policies can choose under which policy they want to claim the admissible amount.

Customer Information Sheet (CIS)

• Mandatory CIS: Insurers must provide a Customer Information Sheet (CIS) along with every policy document to ensure transparency and clarity.

No Claim Bonus (NCB)

• Rewarding Policyholders: Insurers may reward policyholders with a No Claim Bonus, either by increasing the sum insured or discounting the premium amount, for not making any claims during the policy period.

Refund of Premium

• Cancellation Refund: Policyholders can receive a refund of the premium or a proportionate premium for the unexpired policy period if they choose to cancel their policy at any time during the policy term.

Policyholders and Health Insurance

Survey Findings

A survey by Local Circles found significant issues with health insurance claims processing:

• Claim Processing Difficulties: 43% of insurance policyholders experienced difficulties processing their health insurance claims over the past three years.
• Time-Consuming Process: The claims process is extremely time-consuming, often causing policyholders and their families to spend the last day of hospital admission running around to get their claim processed.
• Extended Discharge Times: In many cases, it took 10-12 hours after the patient was ready for discharge to complete the claims process, causing delays and additional costs for staying another night at the hospital.
• Pre-Approval Issues: Even when the insurance company had provided pre-approval to the hospital’s TPA desk before admission, policyholders still faced significant delays.

Conclusion

• The new changes introduced by IRDAI aim to address and mitigate these issues, providing policyholders with more choices, flexibility, and improved service standards. These measures are expected to enhance the overall experience for health insurance policyholders, ensuring faster, more efficient, and hassle-free claims processing.

PRACTICE QUESTION Q. Explain the steps taken to streamline and simplify health insurance policy norms in India. Discuss the implications of these measures on the insurance industry and policyholders.

SOURCE: THE HINDU