Get the right health insurance cover under portability

Until portability was allowed for health insurance, customers were wary of shifting to a new insurer, even if they were unsatisfied with the existing one. The fear was the loss of accumulated loyalty benefits or having to begin the waiting period for existing diseases afresh. But now, with the option of health portability in place, they can right their wrongs. However, it would be wise to keep a few factors in mind before shifting to another insurer.

“Customers can only take the policy in totality. So it’s important to understand the benefits offered under the existing health policy and to match those with the plan one wishes to port to,” says Apollo Munich Health Insurance CEO Antony Jacob.

Those planning to port their services should look for an insurer with a good track record in claim settlements and a large network of hospitals. Besides these, there also are other conditions that should be looked up to avoid being in a spot when making a claim.

WHAT TO LOOK FOR IN A NEW INSURER

Claim-settlement record and network of hospitals for cashless facility Lifelong renewals. Insurers cannot refuse renewals to aged customers Additional premiums, co-pay and sub-limits Incentives for prudent usage of policy Flexibility to increase cover with age Wellness support facilities

Additional loading: Typically, if you have a hospital cash cover, you can opt only for a similar cover with another insurer. Going by the apples to apples logic, there may not be a wider scope for added premiums or loads on renewals.

But insurers say every portability request is considered as a new application. So, if a customer is considered a high-risk person under an insurers’ underwriting norms, he may be asked to pay a higher premium or extra loading. In such cases, unless the insurer is offering a better cover, you should not port your services in haste.

Co-pay and sub-limits: Companies often ask customers to share the risk burden, and levy conditions like co-pay or sub-limits on treatments. Under co-pay, a customer pays a percentage of the total cost, while under sub-limits, he pays anything above the pre-decided cost limit for treatment. For instance, Bajaj Allianz General Insurance levies the co-pay structure, if the customer goes to a non-network hospital.

Customers could look at insurers that reward customers for prudent usage of the cover. So, for instance, Apollo Munich encourages shared accommodation or hospitalisation under its ‘Easy Health’ policy. As an incentive, depending on the slab applicable, it offers Rs 300-500 per day hospital cash to policy holders.

“The cash perks attached to them mean lower price on the product in the long run,” adds Jacob.

Renewals: While insurers have been following 70 years as the average age after which they refuse covers to individuals, customers should now insist on lifelong policy renewals.

“There is no official regulation from the Insurance Regulatory Development Authority (Irda) on the age limit and insurers have been told that they cannot refuse health policy renewals. This, in effect, makes lifelong renewals a must,” says Suresh Sugathan, head (health administration team), Bajaj Allianz General Insurance.

Increase in cover with age: Given the rise in medical inflation, your current cover may be insufficient at a higher age. While you may plan to bridge the gap by buying a new policy, companies are sceptical about covering those in the higher age bracket, as medical risks rise significantly with age.

“Customers should, instead, approach their existing insurers, as they are much more open to upgrades from own customers, subject to the necessary medical tests,” adds Sugathan.

Doing this will also help a customer skip the waiting periods applicable on new policies.

Wellness support: A number of companies now offer wellness support to their customers through helpline set-ups for health tips, medical camps and newsletters. These are value additions and part of awareness campaigns insurers undertake.

But, experts warn, one should take into account the kind of support offered, since the costs involved are met by insurers in premiums. “How many people would really follow the advice dispensed by a doctor on the other side of the phone helpline,” asks an official.

It would be better to see if the new insurer has tied up with hospitals and offers discounted rates for out-patient procedures not covered in the basic policy.

Choose your health cover with care

Check for renewal ceasing age, co-pay norm and sub-limits before opting.

A health insurance policy is a ‘must-have’ according to financial planners. Yet, picking up the right health insurance is not an easy task, given that there are 23 health insurance companies. Consider the six to eight life insurers offering health benefits and customers can be spoilt for choice.

While cost is certainly a deciding factor when choosing a plan, here’s a checklist of what else to consider.

Renewal ceasing age: Customers buying insurance rarely look at the age of policy renewal. The renewal ceasing age is the one when the insurer, no matter how long you have been with it, will refuse to renew your policy. For instance, health policies from ICICI Lombard cease at age 70.

Obviously, the higher the renewal ceasing age, the better. Most companies now offer higher or even lifetime renewal policies to customers.

Co-pay options: Typically, as health risks rise with age, companies ask customers to chip in. Besides higher premiums, customers may also have to co-pay for the policy. Companies follow different parameters to decide when they will convert the policy to a co-pay scheme.

For instance, Star Health Insurance begins co-pay once the renewal ceasing age sets in. So, customers could extend their period of coverage by changing their existing plan to a co-pay scheme. Bajaj Allianz General Insurance asks to co-pay if the customer goes to a non-network hospital.

Exclusions and PEDs: These two factors are the most painful ones. An exclusion is a statement in an insurance policy which describes a condition or type of loss not covered under it. Like, hospital cash plans do not cover dental treatment or surgery, pregnancy-related treatment, childbirth and so on.

KG Krishnamoorthy Rao, MD & CEO, Future Generali General Insurance, says, “Check for the coverage in terms of the inclusions and exclusions. These are mentioned in the policy brochure. And, if it does not cover something, you can either opt for other plans or take a rider.”

Another important feature, pre-existing disease (PED), may or may not be covered in health policies. PED is an illness or medical condition diagnosed prior to buying the policy. Nowadays, most companies cover PED with a lag of two to four years.

Sometimes complications arising from already existing diseases may also not be covered for the first four years of the policy. Senior citizen health plans exclude many ailments and, in many cases, need to be topped up with a rider.

Sub-limits: Check, Krishnamoorthy warns, to check for the limit on payments against the health plan. Health insurers reimburse those expenses that have been incurred reasonably. This is one way for insurers to restrict payments, especially when they think there is overcharging by hospitals. Typically, policies have a cap on the hospital room rent, operation theatre, ambulance charges and so on. For instance, ambulance charges on Bajaj Allianz Health Guard are only up to Rs 1,000.

All other charges, too, are reduced in proportion to the room rent cap. This is primarily because the charge structures levied by hospitals varies by the type of room chosen by you. But insurers are trying to do away with it. ICICI Lombard Family Protect Premier does not have sub-limits or a cap on room charges.

Policy issuer: According to health insurance experts, there isn’t much to debate here. “A traditional plan from health insurers should be the first medical policy that you buy, as these are exhaustive. Those from a life insurer can be an additional buy,” says Mahavir Chopra, head of e-business and retail, Medimange.com.

Traditional policies from health insurers or indemnity plans settle claims on a cashless basis or they may reimburse your bills. Life insurers who offer benefit plans or Hospital Cash Benefit Plans pay a fixed amount as soon as the illness is diagnosed.

Policies from life insurers offer restrictive covereage. They also have limits on the amount paid per day and the number of days the benefit can be availed. Say, you are supposed to be paid Rs 25,000 for a surgery; you will get it. But if the actual expense rises to Rs 40,000, you will bear the extra Rs 15,000.