Health Insurance In The Time Of Covid-19 Pandemic

• Introduction
• Standard options that cover COVID 19
  • Employer Health Insurance
  • Personal Health Insurance
• COVID19 Special Plans
  • Corona Kavach
  • Corona Rakshak
• Comparison of all the options available today
• If I don't have health insurance. Can I just buy these COVID special covers for now?
• Why do I need both regular & specialized plans for COVID-19 treatments?
• Corona Rakshak Vs Corona Kavach - which one should one buy?
• Can you buy both?
• Comparison of Corona Kavach Online Plans
• Comparison of Corona Rakshak Online Plans
• What’s the immediate actionable for the pandemic?
• Important things to remember before you go!

With the rise in the second wave, we've been receiving several questions from our community members, trying to understand COVID19 health insurance plans. Are these plans any good? Will they provide sufficient coverage - given that healthcare rates are suddenly skyrocketing? What are the hidden fine prints I must know, and most importantly - which plans to choose, and how?

So, here's our take - covering all the questions above and more. Let's get started!

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What are the options I have, to cover my family from Covid?

All standard health insurance policies as per an IRDAI circular cover hospitalization expenses related to COVID19

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Health Insurance provided by your employer covers actual hospitalization expenses. Since these policies are customized or tailormade based on negotiations between your employer and the insurer, you need to go through the policy document/literature to exactly understand the terms & conditions. Some of the key terms you must look for: 

• Usually do not have any waiting period for pre-existing diseases.
• Might not have initial waiting of 15/30 days applicable in personal policies.
• Home care treatment might be covered. But this completely depends on your employer's plan.
• Can be prone to heavy deductions (deductions explained in detail later in the article)
  • Might or might not have a sub-limit on Room Rent which could lead to considerable deductions.
  • PPE Kit may be covered, but only up to a limit.
  • Hospital disinfection charges like biomedical waste disinfection/sanitization/ fumigation and other wearables are not payable.

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This is the health insurance you buy personally from the open market. If you have such a policy - it does cover COVID 19 related hospitalization expenses. Like Employer policies, such policies will also cover actual hospitalization expenses. The general conditions you must be aware of: 

• Will have a waiting period of 15-30 days for claims related to sickness (including COVID-19)
• Can have 3-4 years waiting period for pre-existing diseases.
• Home care treatment might not be covered. Depends on policy to policy.
• Will be prone to heavy deductions (deductions explained in detail later in the article)
  • Might have a sub-limit or eligibility cap on Room Rent.
  • Usually does not cover the cost of PPE Kits separately. Will be considered to be part of the room charges.
  • Hospital disinfection charges won't be covered.

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IRDAI designed two short-term health insurance plans (maximum term of 9.5 months) that specifically (and exclusively) address the needs of Covid19-related hospitalizations.

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Corona Kavach is short-term health insurance that reimburses actual hospitalization expenses (if you're admitted for more than 24 hours) – just like your regular health insurance, but this policy is specialized for and dedicated to COVID-19 treatments.

The benefits of this policy are:

• It does not have any room-rent limit.
• The policy will overs PPE, mask, and other charges separately.
• Most importantly, it covers hospitalization for co-morbidities even in case of pre-existing diseases.
• You cannot claim in the first 15 days of the policy.

Every insurer is supposed to offer this policy without exception.

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Corona Rakshak is a short-term supplementary policy designed by IRDAI that pays you a fixed cash benefit of up to Rs. 2.50 Lakhs per person on the occurrence of the following events

• You are COVID-19 positive
• You are hospitalized for more than 72 hours
• You cannot claim in the first 15 days of the policy.

This fixed cash from Corona Rakshak can be used in any manner you want. It can provide some relief to survive through large deductions in claim amount as well as be a source of replacement income.

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Ideally no. These Covid19-specific policies are for the short-term - to address additional needs during Covid19 hospitalizations - and not a replacement for regular health insurance. There are health risks beyond the Covid19 pandemic. And for that - we recommend you invest in your personal health insurance that provides you a lifelong, comprehensive cover for hospitalization expenses against all kinds of diseases & injuries. The secret is to invest in such a policy when you don’t need it – when you are hale and hearty – that’s when you can get the best deal in health insurance. 

In the very short-term, probably yes. If you are looking at a quick cover so that you can then take time out to research and buy a good long-term health insurance cover, you can start off with these plans and then immediately graduate to a full-fledged cover once you have shortlisted your long term health insurance plan.  Of course, you need to know that such policies won't cover if you are already infected or get infected in the first 15 days after your cover starts. 

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We have been talking about this for over a year now.

While your regular health insurance policy does cover COVID-19 hospitalization expenses, it may be grossly inadequate. And this could mean you'll see several deductions, for which you'll pay out of your own pockets.

There are three major reasons for these deductions:

1. Deductions on special Costs for COVID 19

A COVID-19 treatment requires special hygiene, PPE, isolation, separate dedicated staff, waste management. Hospitals are charging for these separately in their bill. A health insurance policy, however, considers these charges to be a part of the room charges and does not account for or pay for them separately.  As you would have read in various media reports, the cost of PPE and other similar charges to manage COVID-19 patients can be as big as Rs. 5000-8000 a day. Such non-payables can cause a serious dent in your savings

2. Deductions on account of Room Rent Limits.

As you would have already heard on social media, Hospitals are charging a bomb for room rent. Many health insurance policies have a cap for per-day room charges. Such caps will result in a significant deduction in your claim amount.

What’s worse, these claims will also attract something called “proportionate deduction”. This means not only will the customer bear the difference amount between paid room rent and eligible room rent, but also bear proportionately on all other associated expenses.

For instance, if you are hospitalized for ten days, the room rent limit in the policy is Rs. 5000, and the actual room rent charged is Rs. 10000. In this case, not only will the insurer deduct Rs. 5000 X 10 days = Rs. 50000, but also deduct 50% for expenses that are linked to the room charge structure in the hospital like doctor visits, surgery costs, diagnostic tests, etc. (called associated expenses)

3. Deductions based on the “Reasonable & Customary Charges” clause.

This is technical, but you need to know this. In the absence of a robust healthcare regulation that standardizes healthcare billing, Insurers are invoking the “Reasonable & Customary Charges” clause in the health insurance policy contract that protects them from unreasonable billing from the hospital. But what is this clause?

As per this clause, an insurer is only liable to reimburse for charges that are reasonable and customary for a hospital of a similar grade/certification in the same geographical location.

Since what is reasonable can be a subjective interpretation of each insurer, the general insurance industry got together to standardized the costs it will pay for various line items in a hospital bill. This standardization will be implemented under the reasonable and customary clause we discussed above.

The following costs are included in Room Rent:  Consultation, Nursing Charges, Room Stay & Meals, COVID testing, Monitoring & Investigations –Biochem& Imaging; Physiotherapy, PPE, Drugs & Medical Consumables, Biochemical Waste Management & other Protective gear, Bedside procedures like Ryles tube insertion, urinary tract Catheterizations

Now, if hospitals too. agree for these standardized costs, then life would have been easy. But hey this is 2021 remember, so while Insurers have been working to enforce these standard charges with hospitals, hospitals have been actively resisting these standard rates. This situation will, for sure, result in disputes—no prizes for guessing who will bear the remainder of what the insurer does not pay.

Phew! Not convinced yet?

Yes, we are still explaining deductions. Recently, the General Insurance Council released a report on the claims that were made for Covid cases across the country, compared to the claims that were settled.

Let's look at the numbers -

So - let's look at the number of claims that were settled.

While a total amount of 14,680 Crores was claimed only 7,900 Crores was settled. That means on average - only 54% of the amount claimed by Covid patients were actually paid out. And the rest, as deductions - had to be paid by the patients' family. These deductions have been due to high room rents charged by hospitals, exclusion of PPE, and related expenses in regular health insurance policies.

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Ok, so you are convinced you need a supplementary cover - which one should you buy between Kavach and Rakshak

• Corona Kavach:
  • When your existing policy has many financial limits: Since Corona Kavach has very few limitations, no room rent limit, this cover can ensure minimal deductions in case of a COVID19 hospitalization.
  • When you have inadequate coverage: Since it covers actual expenses, it is a good option for people who have inadequate health insurance cover (less than 10 Lakhs) and are looking at a quick temporary cover for the pandemic. Kavach is available with all major insurance companies.
  • Comparison of top Corona Kavach plans below.
• Corona Rakshak:
  • Hassle-free cover on deductions: If you have adequate health insurance cover, and are looking at an economical, hassle-free financial protection of 2.5 Lakhs, to cover the deductions on your health insurance claim, this is the most preferred option.
  • The only drawback with Rakshak, is there are very few brands that offer it today.
  • Comparison of available Corona Rakshak plans below.

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Yes, since they are fairly economical, you can buy both that would be the most robust financial cover you could find in the pandemic. There is no restriction that stops you from buying both plans. 

Here's our recommendation: In case you have health insurance without room rent limits and a sum insured of more than Rs. 5 Lakhs, then we recommend you buy only Corona Rakshak. Only when you have a policy with room rent limits or cover less than 5 Lakhs, it makes sense to buy both - Corona Kavach and Rakshak. 

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Here is a comparison of plans we were able to find from various insurance company websites. The idea here is to give you an idea of the range of plans available at various prices.

Premiums (INR) for a Sum Insured of INR 5 Lakhs | Policy Duration of 9.5 months (Last updated on April 20, 2021)

Note:

• All premiums were calculated for individual policies, for a male buyer.
• Premiums mentioned are only for the base-plan and do not include the hospital cash rider
• All premiums for calculated for a Sum Insured of INR 5 Lakhs (maximum available cover) and a policy duration of 9.5 months (maximum available duration)
• All premiums mentioned above are in INR and inclusive of taxes
• Date of calculation: April 20, 2021

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Premiums (INR) for a Sum Insured of INR 2.5 Lakhs | Policy Duration of 9.5months (Last updated on April 20, 2021)

Note:

• All premiums were calculated for individual policies, for a male buyer.
• All premiums for calculated for a Sum Insured of INR 2.5 Lakhs (maximum available cover) and a policy duration of 9.5 months (maximum available duration)
• All premiums mentioned above are in INR and inclusive of taxes
• Date of calculation: April 20, 2021

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After interacting with many experts, people who have bought these Covid-specific plans, and some who haven’t, here’s what looks like should be our final take. The single focus of recommendation we have published below is to reduce the probable deductions in a health insurance claim.

1. Buy health insurance for your old age. So factoring inflation a coverage of at least 7-10L per adult is necessary. If there are 2 adults, then go for a 15-20 L health insurance floater. As far as possible, buy a policy without any room rent limit, or other financial limits like copays.
2. Buy Corona Kavach and/or Corona Rakshak for the pandemic. This is applicable even if you are covered under a Corporate Health Insurance cover unless the cover is adequate enough to take care of the hospital bills estimated and cover PPE, don’t have room rent limits.
3. Ensure you buy Individual Plans and not Family Floaters. Use Family Floater to only cover kids (since kids are not eligible for individual plans.
4. Have liquid funds for an emergency: Cashless facility might not be available with these Covid special plans. We have heard of several cases where hospitals have denied offering cashless claims during the pandemic. Please be prepared with your own cash, and a credit card if possible - for an unfortunate eventuality that you might need to pay a huge advance.
5. People above 65 – unfortunately – there is no plan available. Looking at the estimated hospitalisation expenses – we request you to take utmost care, ensure you accumulate health insurance cover of Rs. 20 Lakhs if possible, and maintain your emergency healthcare fund.

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1. Less intense Covid treatments might not be covered: Health Insurance - including these Covid-special plans covers only "medically necessary" hospitalisations. Getting hospitalised with mild symptoms that could be treated at home will not be paid for by your health insurance. Only hospitalisation that is prescribed as 'necessary' by a doctor will be paid for. In addition to that, you will need to be admitted for 'active treatment'. This means that if you get yourself admitted to a hospital only to observe your symptoms and undergo tests (and no treatment is needed) - then, your insurance will not pay for it. (We've covered all about this, in detail in our article here).
2. Home Quarantine with mild symptoms might not be covered: - Hospitalisation at home will only be covered by insurance where active treatment is carried out at home 'because' hospital beds were not available, or the patients condition is too delicate to even shift them to a hospital. If you only have mild symptoms that can be managed effectively at home - say through oral medications, checking oxygen levels etc. - medical expenses during such Home Quarantine would not be covered by insurance plans.

If you have any further questions - post them on the Beshak Insurance Forum - and get answers from experts and other insurance users in 6-8 hours!