Explained: In new Covid scenario, why focus of insurers is turning to home care

IRDAI Chairman Subhash Khuntia said the insurance sector has for too long concentrated on tertiary care or hospitalisation, and now there is a need to focus more on primary and secondary care, outpatient care, and move on to have preventive care.

With Covid cases remaining high and cost of hospitalisation rising, insurance regulator IRDAI has advised insurance players to change their focus from hospitalisation to preventive care, especially home care and outpatient treatment, and bring down the costs.

While insurance companies have started offering claims on Covid-related home quarantine treatment since July, industry insiders say such claims coming to insurance companies have not picked up so far despite a large number of people opting for home quarantine. Expecting a rise in claims for home quarantine treatment by end of October or November, sources say that since home treatment is not cashless and reimbursements have to be filed by patients, it will hit with a lag.

On the slow takeoff of home quarantine claims, Bhaskar Nerurkar, head of Health claims at Bajaj Allianz General Insurance said that it is on account of several factors including low awareness.

“There is a lack of awareness on this account as many patients are not aware that insurance companies are taking care of home quarantine treatments too. While we are expecting a rise in number of such claims later this month or next month because the claims can be filed in a month’s time, in many cases, since the home quarantine cost are low at around Rs 10,000-Rs 20,000, many individuals are not even going for making claims,” Nerurkar said.

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IRDAI Chairman Subhash Khuntia said the insurance sector has for too long concentrated on tertiary care or hospitalisation, and now there is a need to focus more on primary and secondary care, outpatient care, and move on to have preventive care.

“We should look at home care facilities. We don’t need hospitalisation if home treatment is possible. This cost will come down. Insurance companies, customers… everybody will benefit. We have allowed video-based consultation. We have also allowed wellness in insurance policies,” Khuntia said at an industry conference on Thursday.

Khuntia said IRDAI has allowed wellness and outpatient wellness and preventive features under a health insurance policy. According to IRDAI, empanelled hospitals and network providers can offer health services such as outpatient consultations or treatments, pharmaceuticals, health check-ups/diagnostics including discounts under the health insurance policy. The regulator said they can issue redeemable vouchers to obtain health supplements and redeemable vouchers for membership in yoga centres, gymnasiums, sports clubs and fitness centres for participating in fitness activities.

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Industry participants say that in the case of home treatment for Covid, they would reimburse costs such as tele-consultation with the doctor, nursing care cost, purchase of monitoring device, PPE kit cost and diagnostic cost among others. The policy covers hospitalisation expenses or home care treatment expenses after an insured is found to be coronavirus positive.

Insurers say that while the number of claims in August was in a few hundreds, they jumped 60-70 per cent in September for home quarantine treatment. “We are expecting a jump in the next month,” said a senior official with another insurance firm. In fact, in case of in-patient treatment too insurers are saying that while claims peaked in mid-September, the daily claim figures have fallen by around 30 per cent in the first half of October.

Khuntia said medical inflation is high at 14 per cent and costs are still rising. On the other hand, retail inflation was 7.34 per cent in September. A Covid patient recently shelled out Rs 1.6 lakh for a 12-hour treatment in a Mumbai hospital. While the health insurance segment is just 0.27 per cent of the GDP, it is estimated that 70 crore people are yet to avail of a health policy.

As IRDAI regulations on outpatient treatment and diagnostics came only this year, some insurers are yet to offer these facilities in their policies.

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