Sushma Ramachandran

The second Covid surge has placed a huge financial burden on the families of those affected by this disease, apart from the toll on health. Even those going to state-own hospitals and clinics had to pay for medicines and tests which are often exorbitant. This is in addition to the acute shortages of oxygen leading to purchases of expensive cylinders or concentrators. The cost of having Covid is thus not just the emotional loss of losing loved ones in many cases but also loss of financial support.

One way by which consumers try to provide a cushion for health emergencies in normal times is to buy health insurance. For this, they pay hefty annual premiums in the case of both public and private sector companies. The irony is that during the second Covid wave which began in March this year, health insurance has not helped most of those affected by the dreaded disease. The reason is, the shortage of hospital beds that forced most of those infected to stay home for treatment. Home hospitalization, however, or domiciliary care as it is described is not reimbursed by the insurance agencies. As a result, lakhs of families with active health insurance policies have found their claims rejected and ended up paying for costly treatment from their own savings.

The issue has now reached the courts and questions are being asked about the dire straits of Covid patients at home. The Delhi High Court has noted that patients have suffered due to lack of medical infrastructure and urged the Insurance Regulatory and Development Authority to find a solution after consulting with insurance companies. The IRDA, it is reported, informed the court that two policies known as Corona Kavach and Corona Rakshak had been launched to meet the needs of Covid patients.

Enquiries with insurance agents, however, reveal that these policies are not being offered by all the insurance companies currently owing to the large amount of claims that have become a huge burden for the companies. Only about three private sector insurance companies are currently offering these specialized insurance policies while all others including the four leading state-owned instance companies have discontinued them. A significant feature of the Corona Kavach was that it covered the cost of home care and hospitalization which has been the main issue of dispute currently between insurance companies and their customers.

These short-term affordable policies were launched last year during the first Covid wave to meet the requirements of those affected by the disease. Now the same companies are rejecting claims under these policies on various grounds, including mildness of symptoms or presence of co-morbidities.

What is interesting is that there is a specific clause in mediclaim policies regarding “domiciliary hospitalization” which covers treatment at home owing to non-availability of room in a hospital. Despite this, home treatment claims are being largely disallowed.

Even in cases where the home care treatment claim is being allowed, there is a limit of Rs. 15,000 to Rs. 20,000 fixed by most insurance companies for this purpose. In other words, though patients may have spent even several lakhs on home care and hospitalization, the actual payouts will only be of this small amount. Clearly, this is not enough to cover even the minimum costs of Covid treatment at home. First, the tele-consultations with specialists in the area of pulmonary infectious diseases can range from Rs. 1000 to Rs. 3000, and in some cases, even higher. Daily consultations over two weeks mean a minimum payout of Rs. 14000 at the very outset. In addition, the cost of oxygen cylinders and concentrators has been the region of Rs. 60,000 to Rs. one lakh each. Nursing care, required in many cases, is as high as Rs 10,000 per day for experienced caregivers. Lab tests can also be prohibitively high especially with rates having been jacked up during the crisis.

This is apart from the charges being levied by healthcare companies that claim they are able to provide an ICU in the residence itself, a facility required by many who could not get beds during the last two months.

To be fair to the insurance companies, they seem to be overwhelmed by the tsunami of claims being made for Covid treatment since April this year. The total amount of claims for Covid patients during 2021 on non-life insurance companies is estimated at about Rs. 14500 crore. The number of claims, however, rose by over Rs. 8,000 crore just during the two months of April and May.

It is understandable that the insurance companies will be facing the pressure to meet the unprecedented number of claims, but it is also true that the ongoing pandemic is an equally unprecedented health crisis not just for India but for the world. The government and the IRDA should thus rise to the occasion and direct the insurance companies to provide special support to those who have been holding existing policies. It is not enough to simply say that the new policies have been launched; the regulator must ensure that the policies continued to be actually issued and ultimately honoured by all the insurance companies.

The insurance companies must take into account the fact that it is no fault of the policy holder that hospital beds have been denied to them and they were forced to carry out treatment at home. The lack of medical infrastructure should not be held against those who have paid premiums regularly in the expectation that their health emergencies will be taken care of by insurance policies.

It is also high time to consider the plight of the millions who remain uninsured for health crises and end up facing financial ruin over any major illness. India has one of the lowest insurance rates in the world. Only about 60 per cent of the population has the benefit of insurance. The rest are left to fend for themselves which means that health takes over a large chunk of their household expenditure.

As the country faces this unparalleled crisis, it is for the government and the regulatory agency, the IRDA to make an extraordinary effort to help the common man who has suffered enormously in the last few months.  This help must be forthcoming now for it to be meaningful. Course correction is needed immediately to provide succor to those for whom the existing medical infrastructure fell short and were forced to remain home during the crisis.