Indian Health Insurance Falls Short on Advanced Medical Treatments, Leaving Policyholders Vulnerable

Advanced medical treatments such as robotic surgeries and stem cell therapy are becoming increasingly common in Indian hospitals. However, health insurance coverage has not kept pace. In 2019, the Insurance Regulatory and Development Authority of India (Irdai) mandated that insurers cover 12 modern treatments. Despite this, insurers were allowed to set their own sub-limits, which are caps on the amount payable for specific treatments. These sub-limits often leave patients underinsured, meaning they must pay a significant portion of the costs out-of-pocket, even for treatments costing less than their total sum insured. For instance, a ₹10 lakh policy might have a ₹1 lakh sub-limit for robotic surgery, resulting in the insurer paying only ₹1 lakh irrespective of the total bill.\n\nPolicyholders are discovering these limitations as they try to utilize their coverage or migrate to better plans. Migrating or porting to new health insurance policies is often difficult, especially for individuals with major illnesses like cancer. Insurers use their underwriting norms to assess risk, which can lead to rejections or vague justifications, despite portability rights. The article highlights inconsistencies in how insurers handle individuals with serious health histories, with some successfully porting to new plans while others face barriers.\n\nSub-limits are frequently not prominently disclosed in policy documents, being buried in detailed policy wordings that most policyholders do not read. This lack of transparency leads to unexpected shortfalls when claims are made. Furthermore, insurers sometimes scrutinize the medical necessity of advanced treatments, questioning their use over less expensive alternatives, which contributes to medical inflation.\n\nImpact:\nThis situation directly impacts policyholders by causing financial distress during medical emergencies and eroding trust in the health insurance sector. For the Indian stock market, it could lead to increased regulatory scrutiny for insurance companies, potentially affecting investor sentiment and profitability if issues are not addressed proactively. It highlights a significant gap in financial protection for advanced healthcare needs.\nImpact Rating: 7/10\n\nDifficult Terms:\nSub-limits: Maximum amounts that an insurance policy will pay for specific treatments or services, even if the total bill is higher.\nUnderwriting norms: The rules and procedures insurers use to assess the risk of insuring an individual and decide on coverage and premiums.\nPortability: The right of a policyholder to switch to a new insurance plan from a different insurer while keeping continuity benefits like coverage for pre-existing diseases and accumulated bonuses.\nOmbudsman: An independent body that helps resolve disputes between insurance companies and policyholders.\nImmunotherapy: A type of cancer treatment that uses the body's own immune system to fight cancer.\nBMI (Body Mass Index): A measure of body fat based on height and weight.\nSum Insured: The maximum amount an insurance company will pay for a covered loss under a policy.\nOptional riders: Additional benefits that can be purchased with a base insurance policy to enhance coverage.\nMedical justification: A detailed explanation from a treating doctor supporting the necessity of a medical treatment.\nPre-authorization: The process where an insurer approves a medical procedure or treatment before it is performed.\nMICS (Minimally Invasive Cardiac Surgery): Heart surgery performed through small incisions for quicker recovery.\nCABG (Coronary Artery Bypass Grafting): Surgery to improve blood flow to the heart.\nIrdai (Insurance Regulatory and Development Authority of India): The statutory body that regulates the insurance sector in India.\nHealth technology assessments: Evaluations of the medical, social, ethical, and economic implications of a health technology.