Irrespective of your economic background, health insurance should be an essential part of financial planning and security. Choosing the right health insurance is an important decision, as it can have a significant impact on one's financial stability and access to quality healthcare.
Despite the long list of advantages that come with a health plan, there are some potential problems that you may face. Understanding them will help you deal with them efficiently.
Third-Party Administrators can slow down the claim settlement: Third-Party Administrators (TPAs) are associated with a major problem with extended turnaround time (TAT) when processing claims. The typical TAT for payment of insured patients' cashless treatments is 20 days, but many TPAs fail to meet this deadline due to the complexity of managing claims from multiple hospitals. As a result, some hospitals opt out of providing cashless treatment facilities due to dissatisfaction with the extended TAT.
- What can be done: Opting for companies that have their in-house claim departments generally have a more direct and quick claim settlement. IRDAI should lay stricter rules so that insurance companies pay attention to prompt payment of all claims that are due.
Network hospitals may bill more: Empanelled hospitals are likely to charge more when patients have health coverage, resulting in higher payouts for insurance companies and increased premiums. This premium increase surpasses the rise in medical care costs. There is also the issue of misuse of group insurance policies by hospitals and patients, as uninsured individuals can receive treatment without proper identification leading to potential exploitation.
- What can be done: To avoid incurring extra bills, insurers must conduct hospital visits to assess the patients who have made a claim. If the originator policyholder is determined to be at fault, the insurer may decide to not renew their policy. Insurers should establish pre-determined rates for medical procedures like surgeries and treatments to eliminate any variations in prices between insured and uninsured patients. Any additional costs incurred by the patient must be billed to them directly by the hospital.
Customers make false claims: Many patients are hospitalised for unnecessary reasons, and some people only buy health insurance after being diagnosed with a condition but fail to fully understand the policy's terms and limitations.
- What can be done: False claims can have serious consequences like increased future premiums in response to an unusual claim and also rejection of a legitimate second claim during the same policy period if the limit has already been reached during the first false claim. It's important to review the entire policy document carefully before purchasing an insurance policy to avoid making false claims. Be sure to ask your sales representative for the "policy wordings" in case of doubt.
Companies stressing products with a higher commission: Salesmen may mis-sell products to meet targets and earn incentives, often selling inappropriate policies to clients who may not fully understand the terms.
- What can be done: Before considering any insurance policies, policyholders should request additional information from companies and have a clear understanding of the product and its benefits. Increased transparency in brochures and other marketing materials, facilitated by IRDA intervention, can be helpful in gaining insights.
Some other challenges with health insurance
Given below are some of the other challenges in health insurance that cause encumbrance in its development:
- With a population of over 1.39 billion, raising awareness about health insurance and its importance is probably one of the biggest challenges
- Apex body IRDAI, the Insurance Regulatory and Development Authority of India (IRDA), needs to be more efficacious. There is an urgent need to focus on the quality, availability and affordability of health insurance.
- As health insurance is not mandatory, many prefer to avoid buying a cover despite its advantages.
- There is a dearth of appropriate data and information for the planning and management of health insurance schemes.
- A number of myths and misconceptions exist about health insurance
- There aren’t enough suitable health insurance products for people living in remote/ rural areas as well as for those who are below the poverty line
- There is a gulf between the rural and the urban and the rural in terms of healthcare facilities.
Despite the fact that health insurance is an essential tool to ensure the well-being of the entire family, there are many who lack adequate access to health insurance due to inadequate government policies and a lack of prioritisation. This needs to be rectified as soon as possible so that people from all economic backgrounds have access to quality healthcare services and protect themselves against financial hardship during a medical emergency. The IRDAI and the government need to focus more on health insurance policies that make it easier for everyone to obtain suitable and affordable coverage