Insurance regulator steps in for standard Covid-19 product

This will set the ball rolling for a standard Covid-19 insurance product with details of costs covered, including those for PPE kits and other consumables, which are currently unavailable under a normal health insurance policy.




WITH COVID-19 patients running up high bills in private hospitals, the Insurance Regulatory and Development Authority of India (IRDAI) has asked the General Insurance Council — the apex body of general insurers — to arrive at a ‘standardised cost structure’ for treatment of the pandemic.

This will set the ball rolling for a standard Covid-19 insurance product with details of costs covered, including those for PPE kits and other consumables, which are currently unavailable under a normal health insurance policy.

With the Council sending its feedback by May 31, the regulator is expected to take a decision on the product over the next couple of weeks. In a communication to insurers, the General Insurance Council said the proposal under discussion entailed arriving at a negotiated rate for all elements associated with Covid treatment in a hospital.

As of now, private hospitals which have Covid-19 wards charge high rates with treatment costs ranging from Rs 3-8 lakh. “While government hospitals do not have adequate bed capacity to deal with patient load, the common man is unable to bear the expenses of a private hospital and especially a super speciality for Covid-19 treatment. A super specialty hospital, for instance, currently charges (without ventilator) in the following manner: Bed Rs 20,000–Rs 30,000 a day, bed plus PPE and medical staff, cost per day Rs 50,000. The approximate cost for 15 days would be around Rs 3.5 lakhs – Rs 9.5 lakhs depending on the grade of the hospital and city,” the proposal said. There have been instances when patients received bills of even upto Rs 16 lakh bill for Covid treatment in private hospitals.

“The government of India must cap the maximum rates hospitals can charge for Covid-19 using their power under Epidemic Act and if possible IRDAI could issue an advisory for the same,” said the CEO of a private insurance firm.

For government hospitals, it has proposed a rate of Rs 3,000 for isolation ward, Rs 4,000 for isolation room, Rs 5,000 for ICU and Rs 7,500 for ICU with ventilator. These rates would include accommodation and food, ventilator charges, doctor’s visit, investigations, medicines and PPE kit.

GIPSA (General Insurance Public Sector Association) norms can, however, be followed for categorisation of private hospitals for defining reasonable treatment rates, the proposal before IRDAI and GI Council said.

The proposal has suggested three zones depending on the size of the city. For an “A+” grade hospital (top grade) in Zone 1, it has proposed Rs 11,000 for isolation ward, Rs 16,000 for isolation room, Rs 20,000 for ICU and Rs 25,000 for ICU with ventilator.

For Zone 2, the rates would be Rs 8,000, Rs 10,000, Rs 15,000 and Rs 20,000, respectively. The rates will drop further for Zone 3 hospitals.

For “A” grade hospitals, charges would be 15 per cent less compared with “A+” categories. For “B” grade hospitals, the charges would be limited to 65 per cent of the cost of “A+” categories. The cost will include accommodation charge, doctor visits, PPE kit cost, investigation cost, medicine, and consumable cost and diet for patients.


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Going by this proposal, the hospitalisation charges for a patient for 10 days will work out to Rs 2.5 lakh in a top grade “A+” hospital in Mumbai or Delhi.

At present, different insurers have different products to cover the illness. Hospitals also charge different rates. “Discussions have been going on for some time now,” said the CEO of an insurance company.

“We are trying to develop something specific where the common man gets treatment in private hospitals at reasonable rates. Some understanding with hospitals can be arrived at as is done by four PSUs with network hospitals under an arrangement… for that matter each TPA (third party administrator) has a network of their own but it’s done for defined surgical procedures. Here you have to deal with conventional treatment,” said the chief of a PSU general insurance company.

IRDAI has not capped the cost in the current guidelines.

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