Health insurance: Policyholders footing 40% of hospital bills

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While underwriting policies of insurance companies are becoming tighter for new buyers, existing policyholders are grappling with high deductions on their claim amounts. According to a news report in The Economic Times, around 40% of treatment cost is borne by policyholders as out of pocket expenses.

One of the main reasons cited by insurers is the high costs charged by hospitals. In the absence of a standard protocol for treatment, it remains a bone of contention between hospitals and insurers. For example, Personal Protective Equipment (PPEs) has again become a significant cost of hospital bills, which insurers are disallowing if it is in excess of the specified limit. Last year in July, when the high cost of PPEs became a cause of concern for many, GIC prepared a rate chart for Covid-19 treatment after taking into account rates published by various state governments. The suggested rates were broadly based on the schedule of rates that were suggested by the Niti Aayog panel.

PPE kits

Under the new proposed rates, the partner hospitals can charge between Rs 1,200 and Rs 2,000 for PPE depending upon the severity of the sickness. But insurers say PPE kits have once again become a significant cost of hospital bills, which they saw going down in between.

According to General Insurance Council (GIC) data as of May 14, 14.82 lakh Covid-19 claims worth Rs 23,000 crore were reported. Out of total claims reported 12.33 lakh claims worth Rs 11,700 crore have been so far settled by insurers.

Insurers’ gripe

Insurers have also been complaining that there has been high usage of antibiotics for the treatment of Covid-19 compared to the first wave. Moreover, there are complaints of shortage and overcharging, resulting in a jump in the hospital bills.

Apart from the above-mentioned costs, there are also other costs which policyholders have to pay for. For example, there is a list of 199 non-payable items such as steam inhalers and nebuliser kits, which insurers do not pay for. Similarly, there are co-payments and sub-limits which can result in a significant deduction from the claim amount.