Your Health Insurance Just Got Better: New IRDA Regulations Explained

Earlier this year, the insurance regulator removed the age limit of 65 years for individuals to buy a health insurance policy, in a move aimed at improving the inclusivity of the product, particularly the elderly population.

The regulator also said, insurers may design products specifically for senior citizens. Plus, there could be health insurance policies targeted at students, children, maternity, or any other group.

Other than that, the IRDA shortened the mandatory waiting period for pre-existing conditions from four to three years. Also, it directed insurers that if five annual premiums have been paid (i.e. there are 60 months of continuous policy coverage), claims cannot be rejected on the grounds of non-disclosure of pre-existing diseases, barring in cases of fraud where the onus to prove it shall be on the insurer.

For speedy claim settlement of health insurance policies, the General Insurance Council (GIC) and IRDA teamed up to introduce the 'Cashless Everywhere' initiative wherein you, the policyholder, can avail of cashless health insurance irrespective of medical treatment done in a network hospital or healthcare facility or non-network hospital or facility. This addressed the issue of access to limited cashless health insurance faced by policyholders.

[Read: How 'Cashless Everywhere' Initiative Empowers Policyholders]

Now taking feedback from the situation on the ground and experiences -- where policyholders/patients are asked to stay back for very long hours in the hospital or healthcare facility until the cashless claim is settled by the insurer, and at times the policyholder/patient is even charged for the entire day of stay or asked to stay back for another day (although the discharge formalities were completed much earlier) -- the IRDA has now set a time limit for approving cashless health insurance.

The regulator has said that final authorisation for cashless health insurance claims when the patient/policyholder is advised discharge must come from the insurer within three hours of request from the hospital.

The insurer shall decide on the request for cashless authorization immediately but not more than one hour of receipt of the request. The IRDA has direct insurers to provide pre-authorization to the policyholder through digital mode (via registered mobile number and email ID). Do watch this video to know how IRDA has empowered policyholders:

Further, the regulator has directed insurers to put in place necessary systems and procedures immediately and not later than July 31, 2024. This includes a dedicated help desk in a physical mode at hospitals and healthcare facilities.

"In no case, the policyholder shall be made to wait to be discharged from the hospital," says the master circular of the regulator, dated May 29, 2024.

Furthermore, the circular states, "If there is any delay beyond three hours, the additional amount, if any charged by the hospital, shall be borne by the insurer from the shareholder's fund."

In the event of the death of the policyholder/patient during treatment, the circular states that the insurer shall:

• Immediately process the request for claim settlement.

• Get the mortal remains (dead body) released from the hospital immediately.

If you, the policyholder have multiple health insurance policies, there will be an option to choose which one you wish to use as the primary policy to settle claims. In case the available coverage under the said policy is less than the admissible claim amount, the primary insurer will be required to seek the details of other available policies of the policyholder and shall coordinate with other insurers to ensure settlement of the balance amount as per the policy conditions, without causing any hassles for you.

[Read: How to Make Multiple Health Insurance Claims]

No claim shall be repudiated without the approval of the Product Management Committee (PMC) or a three-member sub-group of PMC called the Claims Review Committee (CRC).

In case the claim is repudiated or disallowed partially, details will be required to be conveyed to the claimant along with full details giving reference to the specific terms and conditions of the policy document.

Pursuant to the intimation of the claim, to make it hassle-free for the policyholder and his/her relative, the insurers and Third-Party Administrators (TPAs) are asked to collect the required documents from the hospitals. Policyholders or his/her relative are not required to submit the documents.

For any grievance, insurers are directed to have a robust grievance redressal process. In case the Insurer does not honour the Ombudsman award, IRDA has directed that a penalty of Rs 5000/- per day be payable to the complainant. Such penalty is in addition to the penal interest liable to be paid by the Insurer under The Insurance Ombudsman Rules, 2017.

[Read: Your Ultimate Guide to Cashless Health Insurance]

In case there are no claims during the policy period, the regulator has directed insurers to give policyholders the option to choose such no-claim to increase the sum insured or discount the premium amount.

At the time of renewal of the policy, the master circular states that it shall not be denied because the claim/s was made in the preceding policy years, except in case of established fraud or non-disclosure or misrepresentation by you, the insured.

Also, no fresh underwriting is required to be done at the time of renewal of the policy, unless there is an increase in the sum insured. The underwriting policy should also ensure that Ayush treatment is at par with the other treatments. As a policyholder, you are given the option to choose the treatment of your choice.

If for any reason you, the policyholder choose to cancel the health insurance policy at any time during the policy term, the master circular states, "the policyholder to get a refund of premium/ proportionate premium for the unexpired policy period."

To sum-up...

These new regulations for health insurance in my view are very encouraging, customer-oriented, and intended to make the health insurance landscape in India efficient, set high standards of service, make the ecosystem transparent, and may result in low claim repudiation. In short, it would empower you, the policyholders.

Make sure you and your family have sufficient health insurance coverage in the interest of your financial well-being. A cashless health insurance policy would prove to safeguard and reduce financial stress in case of a medical emergency. Be thoughtful in your approach.

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Disclaimer: This article is for information purposes only and is not meant to influence your investment decisions. It should not be treated as a mutual fund recommendation or advice to make an investment decision in the above-mentioned schemes. Use of this information is at the user's own risk. The user must make his own investment decisions based on his specific investment objective and financial position and use such independent advisors as he believes necessary.