Effect of Covid-19 on the Indian Health Insurance Sector

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With a surge in positive cases of COVID-19 globally, people are worried about their health insurance policies covering them adequately, while others have spared no time in purchasing health covers. In the current pandemic situation, buying health insurance is as tough as migrant labor going home.


Covid19 is making insurers rethink the policy structure for health covers. Covid19 is the cause of change, which has resulted in 101,261 reported positive cases in India and 33,163 deaths so far. Insurance companies have so far received 1,900 medical insurance claims amounting to about Rs 47 crore.

The insurance regulatory had made it clear that any hospitalization case due to COVID-19 would need to be covered under health insurance that covered admission to a hospital, which means if the individual is tested positive and undergoing the treatment, then he would be eligible to claim the money under their health policy. And in a few health insurance policies, if the patient has been hospitalized for 24 hours then the patient can claim the money. But, it differs from the company’s policy structure for health, especially in corona cases.

Insurers are worried about the risk costs going up as patients of diabetes, asthma, and BP is more prone to coronavirus. As the vaccine is at the development stage, Covid19 has made companies learn a lesson on the inclusions and exclusions. While most companies were mandated to pay health insurance claims, terms, and conditions of health policies would also see change. The policies from senior citizens to smokers and non-smokers are on the verge to see some changes.

The company collects small amounts of cash from its clients, and pools that cash together to offset losses. If the pool gets exhausted rather quickly, then the immediate action taken by the insurers is to hike the premiums. One of the reports says “Initially we saw patients hospitalized to state-owned hospitals where the government would pay for the treatment expenses. However, from April onwards, there was a rush of patients moving to private hospitals as well. This automatically translated to higher claims cost for insurance companies,” said the head of claims at a private general insurer.

In the future, there will be a 15-20 percent increase in premium and for senior citizens, it will be either by add-on or mandatory co-pay clause. Insurers are coming out with new package rates and schemes for the treatment of Covid19.

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