InvestorQ : What are the costs that health insurance companies cannot recover from their customers in lieu of COVID-19 treatment?
Sneha Balasubramanian made post

What are the costs that health insurance companies cannot recover from their customers in lieu of COVID-19 treatment?

Answer
user profile image
Ask IIFL answered.
3 months ago


In a recent notification, insurance regulator IRDAI stated that the costs related to diagnostic and implants, pharmacy, and medical devices shall not be a part of associate medical expenses, rest all expenses as mentioned in the original policy shall be recovered from the insured. This simply means that insurance companies cannot recover such costs on a proportional basis in case a policyholder opts for higher room rents than what is allowed in the policy. Generally, if a policyholder picks up a room with a higher rent than allowed, the insurer only covers a fixed proportion of its cost and the individual (policyholder) shall have to pay the rest of the amount.

This step has been taken by IRDAI with a view to reducing the out-of-pocket expenses for customers who all are buying health insurance policies. IRDAI has also asked the insurers to clearly define a list of associated medical expenses for which they make proportional deductions. This guideline would be a relief for all those seeking some help from the insurance regulator due to higher COVID-19 costs. However, this is a temporary guideline and shall be reviewed again after 31st March 2021 and a fresh guideline shall be issued in place of that or regulators may choose to adopt the same guideline.