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The increased claims and the increase in loss ratio have kept insurers on tenterhooks. (Representative Image)

India is battling an escalating health crisis owing to Covid-19. The second wave of infections hit a record high that affected the healthcare sector. This triggered a massive surge in health insurance claims, especially the Covid- specific policies with insurance companies unprepared to take in such a large influx of cases. The companies are now struggling to settle the claims. The High Court asked the IRDAI to address grievances to communicate cashless approvals to concerned hospitals within 30 to 60 minutes. All health insurance companies must fast-track their cashless hospitalization and discharge patients availing insurance policies. IRDAI issued guidelines to ensure the settlement of Covid-19 claims faster and better. Additionally, it instated insurance processes to issue proper directions to their TPAs in an attempt to ensure better timeline compliance.

Status of insurers 

Insurers have been facing losses and are overwhelmed due to the upsurge in claims and payouts. The increased claims and the increase in loss ratio have kept insurers on tenterhooks, worried about the industry’s financial stability.

These anxieties are entirely justified as media reports state that the non-life insurance industry has received over 1.22 million COVID-related claims in the first quarter of the current fiscal year (Q1FY22), higher than in FY21, indicating the severity of the second wave of the pandemic.

After their board meeting on 6th June 2021, Kotak Life Insurance estimated a loss of Rs. 225-275 crores in shareholders’ accounts in the first quarter due to the increased claims. The figures were opposite to its profit measures last year.

According to the data by Bajaj Allianz, general insurance saw more than 100% of Covid clients during the second wave compared to FY21.

Irdai said it had settled 80% of Covid-19 health claims, amounting to Rs. 1,500 crores as of June 22. The insurance companies players have received about 19.11 lakh claims so far.

Irdai mentioned that 88% of the death claims have also been settled up to Rs. 3,593 crores. The institution has worked to design new policies to cater to unprecedented situations.

As Covid-19 cases continue to rise in FY22, life insurance companies will need to shore up provisions going forward.

What can be done?

On 10th May, the Irdai circular mandated that all insurers must offer Corona Kavach and Corona Rakshak policies for renewal. Despite this, some insurers have rejected policy renewals related to Covid-19 until September 30.

In several cases, insurers have rejected claims for home care treatment, co-morbidities, and hospitalisations due to mild COVID-19 symptoms, which are said to be covered in the Corona Kavach and Rakshak policies. There could be several reasons for the rejections, including the pre-requisites not being met.

Here is a list of pointers that the insured individuals need to look into while making an insurance claim against the Covid insurance policy to be foolproof and get the desired claim approved.

As soon as you are infected and start undergoing treatment, inform your insurance provider about the kind of treatment you are taking, for instance, home quarantine, hospitalization etc. Do not forget to carry your RT-PCR report, PAN card, Aadhaar Card and medical health card during the admission. This will help the insurer to analyse your claim better to provide the correct reimbursement without delaying or putting any rejection in place.

In case of hospitalisation, make sure you submit all the pre and post-hospitalisation expense records, including ambulance charges and treatment costs, to avoid any possible reason for rejection. Usually, the insurers provide pre-authorisation approval in Covid hospitalisation. Also, it is essential to keep the discharge summary ready before applying for the claim. These papers must include the number of days for hospitalization and ICU (if availed). You can apply for a reimbursement claim if you avail of the treatment in a non-network hospital, and if it was a network hospital, you get a cashless settlement. Usually, the insurers take 15-20 days to settle the claim. It is always advisable to go to a network hospital to avoid any repercussions and rejections.

Still, if you face a claim rejection or the settled amount is too low, you can use the redressal mechanism. Insurers are mandated to reply to your complaint in 15 days. If they fail to comply with this timeline, you can write directly to the IRDA for a speedy claims settlement.

Take appropriate steps to ensure a smooth claim process, especially after you have defeated the deadly Covid-19.

(The writer is founder and CEO at eExpedise Healthcare. Views expressed are personal)