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HEALTH INSURANCE

The Impact of Health Insurance Regulations on You

Janhavi Shinde Janhavi Shinde 27 October 2016

Learn about the recent key revisions in health insurance regulations 2016 and their effect on end consumers. Read here to know more.

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Previously, the apex regulator Insurance Regulatory Development Authority (IRDA) had been very rigid about its regulations. But, now the IRDA had let go its strictness and have introduced new guidelines since July 2016 about its health insurance regulations. The main vision is to create health insurance products that are closer to consumer needs.

Let’s learn about the 5 most vital modifications of IRDAI that will influence the consumer of health insurance.

1. Moving towards Innovation

Health insurance industry has undergone a sharp hike or say growth during the past couple of years in India.

The research says the main reason for this sharp growth is nothing but increase in income of the citizens and their understanding the importance of health insurance in today’s risky life.

In order to introduce advanced products and features, now IRDA’s Health Insurance Regulations authorize health insurance companies to offer pilot [or say experimental] products. These pilot health insurance products can be obtainable for a maximum 5 years.

After 5 years, the new product will fit to a regular health insurance product. But, if the product is not achievable to continue for 5 years, then the insurers have full rights to discontinue the same due to its failure.

If it is achievable, then they will convert it to a regular health insurance product. Perhaps this will fetch in more inspiring and consumer-friendly as well as attractive health insurance products in the market.

2. Promoting Wellness through Discounts

Earlier, the insurers were not proactive regarding the health and wellness of the insured. To narrow down this gap, insurers are now allowed to offer discounts on the renewal premium to the insured that will promote wellness and preventive health care.

For example, Asha buys a health insurance policy at an early age of 27 years. She is regular enough to pay the premiums on time. In this case, she can avail some discounts in premium or indirectly on diagnostic or pharmaceuticals services of network providers.

The insurer can also arrange for health checkups and give her discounts in cashless transactions.

Hence, IRDAI wants the insurers to pen down these discounts on the policy document.

Basically, so that the insurers cannot back out from its promises for availing discounts to the insured! This regulation was indeed a motivational revolution so that the consumers always try and keep themselves healthy.

3. Improving the Claims Process

There are many of us who have not yet opted for a health insurance policy because of the known hassles that one goes through during claim settlement.

It is really a not-so-good feeling when you have to make a couple of phone calls and be on hold for hours together to reach the customer service number just to ensure that the your claim is intimated.

And then the process post claim intimation awaiting for your hard earned money is even worse. So, to make the claim process simple and transparent, the IRDA has brought in the below regulations:

  • Roll out thorough procedure for claim settlement.
  • Deliver comprehensive details with respect to response and claims processes in the policy terms and conditions.
  • If the timelines are not met, then detail the communication networks for escalation.
  • Mention the exact documents required for competent and smooth claim settlement.
  • Analyze the motive for the documents not submitted on time by the insured.
  • Sustain the claim history as well as the documents submitted by the insured in an electronic format.
  • Intimate the customer if any changes in the third party administrator (TPA) or service provider 30 days in advance.
  • Inform the customer about the reasons for the claim getting rejected.

4. No Commission to Agents at the time of Porting

As per the IRDA’s new health insurance regulations, the agents henceforth won’t be applicable to earn any commission if you opt to port your health insurance policy. But, on renewals of the health insurance policy they continue to earn their share of commission. Portability is nothing but transferring your health insurance policy from one insurer to another. This implementation however has a downside too. Since there is no participation of the agents earning commission due to portability, then they may sell new products to you.

Nevertheless, if you are thorough with your decision of portability, then please go ahead rather than buying new products from the agent. Simply because with the benefit of portability, you can transfer the benefits of no claim bonus as well as the waiting period for pre-existing diseases to your new policy.

5. Renewability Conditions

As per the IRDA’s new health insurance regulations, each insurer has to broadcast lifetime renewability of their health insurance policies.

In simple terms, you can linger to renew your health insurance for lifetime if you have one. No insurer can reject the renewal of the health insurance policy just because of the claim made in the previous policy years.

However, the insurer has full power to reject the renewal of health insurance policy purely basis fraud, moral hazard and non-co-operation from the insured.

To sum up, the IRDA’s new health insurance regulations will now permit the insurers to play a healthy competition in the health insurance sector and reduce frauds. This will eventually lead to more and happier health insurance consumers thereby structuring a good and healthy relationship between the insured and the insurer.

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Janhavi Shinde
Written by Janhavi Shinde
Right from being a Flight Attendant to a Banker and now to a Content Writer, she has tasted success in all the fields. The kinda girl who loves pets and knows how to manage difficult people and events.