Considering the rate at which COVID-19 is spreading across the country and the amount of impact it is leaving on thousands of lives, several are concerned about contracting the disease and the amount of medical expenses that may come along with it. Insurance companies have noticed a significant rise in the purchase of health insurance policies. This is a notable rise, considering the number of lives that were covered with health insurance in India was as low as 45%.
IRDAI on COVID-19 Treatment
In the month of January 2020, the Insurance Regulatory and Development Authority of India (IRDAI) mandated all the general and health insurance companies to offer a standard product to reduce the complexity involved in the purchase of health insurance. This product was named the Arogya Sanjeevani policy which was put into effect on 1st April 2020. Today, around 29 insurance companies offer this plan with a maximum of 5 lakhs as the sum assured.
On 4th March 2020, IRDAI released a circular to address the concern about health insurance, mandating the health insurance policies to cover the cost of COVID-19 treatments, including hospitalization. This includes the Arogya Sanjeevani policy.
But is 5 lakhs health cover enough for COVID-19 treatment? Or should people look for other policies to cover their needs?
Cost of COVID-19 Treatment
With private hospitals getting the green signal for treating COVID-19 patients, Indian health insurance companies have started receiving claims. Even though the private labs were recommended to charge Rs. 4,500 to test their patients for the virus, it does not limit them to charge beyond that rate.
As per General Insurance Council, around 34 claims were made as of 30th March 2020, and they sized up to a total of Rs. 58.05 lakhs. A third of those claims have been settled by the industry, making the average claim as Rs. 1.42 lakhs. As per the claims filed, the cost of treatment may range anywhere between Rs. 50,000 to Rs. 4.5 lakh. This depends on the severity of the infection and how critical the patient's condition is. The cost of treatment may as well be lower if the treatment is availed at a secondary care hospital instead of a private one.
Is Arogya Sanjeevani Enough?
Arogya Sanjeevani has a room rent cap of 2% or a maximum of Rs. 5000 per day and an ICU cap of 5% or a maximum of Rs. 10,000 per day. Furthermore, it is also mandatory for the policyholder to co-pay 5% on the total amount of the claim. This means that you will have to pay your share for all the treatments along with the insurance company.
Another drawback that comes with this policy is that insurers are not allowed to offer any add-ons along with it. So, any chance of availing a discount or additional benefit goes out of the question.
Considering the cost of treatment, if you are buying a health insurance policy with the intention to cover yourself against this pandemic, then Arogya Sanjeevani is your best bet. However, if you want health insurance beyond this, then one can be recommended otherwise. This is because even though Rs. 5 lakh is sufficient to beat the COVID-19 crisis, it may not be enough to cover your medical expenses for 10 to 15 years down the lane. One must take this factor into consideration with the rising cost of medical expenses.
Why Considering Other Options is Important?
Note that there are policies that do not impose a financial cap on the room rent. Even though the premium cost is relatively higher, they are worth it for a longer run. You may as well invest in this than shelling out 5% of your claim with Arogya Sanjeevani that will exhaust your sum assured within a few years.
Health insurance experts from PolicyX.com advise that if one is considering to buy a health insurance policy at the time of this pandemic, then they may as well buy something that will benefit them for decades and not just a couple of years.
If affordability comes into question, Arogya Sanjeevani can be considered as a good start. However, if you can afford an expensive policy, then considering other options is the only way to stay healthy, wealthy, and wise.
