In February last year, the Insurance Regulatory and Development Authority (Irda) said it was issuing a standard definition for 46 commonly used terms in health insurance, in respect of all policies issued by life and general insurers.
"Although health insurance is rapidly growing, access to it still remains limited and complaints, especially due to variable interpretations of key policy terms, are enormous," it explained. "All insurers shall adhere to the stipulated definitions, while defining these 46 core terms in all policies," it said.
However, policyholders' plights are far from over.
Take the case of Anand Kumar, whose wife had high fever for four days continuously. When it refused to subside, Kumar was advised a blood test and his wife showed symptoms of both malaria and typhoid.
The doctor advised admitting her to hospital, to control the fever at the earliest. The rest of the treatment could continue after she was discharged. Kumar agreed instantly.
Yet, when Kumar presented a claim against his health insurance policy, his insurer rejected it, saying its view was that hospitalisation wasn't required. The health insurance contract excluded 'medical expenses where inpatient care is not warranted'.
Who takes the call: Insurer or doctor?
While Kumar got his expenses reimbursed through his employer's group health policy, maybe a self-employed indvidual could not have done so. Yet, when a doctor suggests admission, almost no one will refuse to heed it.
The other clause most life and general insurers include, especially in critical illness plans, is 'failure to seek or follow medical advice'.
Deepak Yohannan of MyInsurance.com feels its difficult to say such clauses are unfair or open-ended. 'Because, taking from the clause, delay in taking medical help escalates the cost of treatment, which makes it expensive for the insurer for no reason from their side.'
Yet, how do you ensure that you seek medical advice at the right time?
While health insurance experts agree insurers should accept such claims as there should be no questions raised on a doctor's recommendation, insurers easily decide against it. Some blame it on high instances of cases where a patient is hospitalised only because he has a health cover.
But there is no standardisation on such a sub-clause. There is no such definition in Irda's Standardisation Guidelines and it leads to claim rejection.
Another exclusion for critical diseases reads 'loss caused directly or indirectly, wholly or partly by infections or any other kind of disease'. This is also there as part of many insurers' personal accident cover. Simply put, nothing is covered.
Open-ended definitions
Sometimes, even standardised definitions can be very open-ended and lead to claim rejection.
Says Yashish Dahiya of policybazaar.com, 'One such example is the definition of pre-existing conditions. Irda defines or standardises a pre-existing condition as 'previous hospitalisation or medical treatment due to an injury or medical condition within the last 48 months of the policy being issued'. However, this definition is insurer-specific and insurers can categorise a disease as pre-existing even if it was preceding a period of 48 months.'
Another example is the definition of something as simple as 'injury'. This means 'accidental physical bodily harm, excluding illness or disease solely and directly caused by external, violent and visible and evident means, which is verified and certified by a medical practitioner'.
MS Kamath, a medical practitioner and general secretary of the Consumer Grievance Society of India, said by such definitions, even a simple sprain should be covered under health insurance. That is not the case.
Kamath adds that while policyholders are to be blamed for not reading the health cover contracts they sign on, there is a problem of terms such as stroke and paralysis being used very loosely. For instance, only two fingers could be paralysed but that is not the definition of paralysis for insurers.
Too convoluted to understand
A classic example is of room rent. Irda guidelines define it as 'the amount charged by a hospital for the deductibles in occupying of a bed and associated medical expenses.
'Deductible is a cost sharing requirement that provides that we will not be liable for the amount of covered medical expenses, as specifically mentioned in the policy schedule, which has to be borne by you (policyholder) for each and every claim during the policy period, before it becomes payable by us (insurer) under the policy.
'This is to clarify that a deductible does not reduce the sum insured.'
'Which policyholder can understand this on his own?' asks an expert. 'And, no insurer will explain it clearly. Because of confusion over room rent charges, many are paid lower claims.'
Critical illness is defined as 'symptom/s (and/or the treatment) of which were present in the insured person at any time before inception of this policy or on the date on which cover here under was granted to such insured person, or which manifests itself within a period of three calendar months from such date, whether or not the insured has knowledge that the symptoms or treatment were related to such critical illness'.
Again, something few can easily decipher.
Official gobbledgook
- 'Critical illness symptom/s (and/or the treatment) of which were present in the insured person at any time before inception of this policy or on the date on which cover here under was granted to such insured person, or which manifests itself within a period of three calendar months from such date, whether or not the insured or the insured person has knowledge that the symptoms or treatment were related to such critical illness'
- 'Room rent is the amount charged by a hospital for the deductibles occupying of a bed and associated medical expenses.
Deductible is a cost sharing requirement that provides that we will not be liable for the amount of covered medical expenses, as specifically mentioned in the policy schedule, which has to be borne by you (policyholder) for each and every claim during the policy period, before it becomes payable by us (insurer) under the policy.
This is to clarify that a deductible does not reduce the sum insured'
- Injury means 'accidental physical bodily harm excluding illness or disease solely and directly caused by external, violent and visible and evident means which is verified and certified by a Medical Practitioner'
Reasons for claims to be denied
- Failure to seek or follow medical advice
- Medical expenses where in-patient care is not warranted
- Loss caused directly or indirectly, wholly or partly by infections or any other kind of disease
- Any change of profession after inception of policy which results in the enhancement of our risk
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