Ramki was irate. The reason? His mother’s claim of Rs. 3 lakh for knee replacement surgery and ensuing hospitalisation had been rejected by the insurance company. On discussing the matter, I realised that it was lack of awareness on Ramki’s part about the Insurance Regulatory Authority of India’s (IRDA) circular on Health Insurance Portability that had cost him dearly. Ramki’s parents were under a group medical insurance policy and had promptly paid their annual premium for 20 years. Last year, two months before the policy was due for renewal, the company Ramki was working for offered free insurance cover for his family and himself, which included his parents as well. Accordingly, Ramki shared the required details with his company. During the process, nowhere did he mention the existence of his parents’ policy. Neither had they communicated anything about it to the insurance company. Ramki had heard of portability of insurance policies and presumed that once he handed over papers to his company, portability would automatically take place. He did not stop to analyse if portability was possible in group insurance or how the insurance company, where his parents had taken the policy that was active for the past 20 years, was likely to know about their plans to port, or, for that matter, how his company would know that he was looking at the portability option for his parents. His parents’ renewal premium was also not paid because Ramki was under the belief that his parents’ policy had been ported to the new company.
However, when his mother underwent replacement surgery of both knees and papers were submitted towards the claim, Ramki was in for a shock when the settlement was denied citing the “pre-existing disease” clause and that it had not been covered during the first year of the policy. Obviously, the present insurance was considered to be a new policy and the previous one, which his parents had had many years, got terminated, as they did not renew it last year, the net result being that Ramki ended up paying a huge sum out of his pocket.
The IRDA’s circular on Portability of Health Insurance explicitly states that at least 45 days before renewal of a policy is due, one should write to the old insurance company requesting a shift, specify the company to which the policy is to be shifted and renew the policy without a break. However, a 30-day grace period is allowed if porting is under process.
The biggest advantage of portability is that when a person changes the health insurance policy from one company to the other, he does not need to lose the benefits he had accumulated. In the past, in health insurance policies, such a move resulted in one losing benefits like the waiting period for covering “pre-existing diseases”. However, the present circular protects consumers by giving the right to port to any other insurer of their choice. It has laid down that the new insurer shall allow for credit gained by the insured for pre-existing conditions in terms of waiting period. This applies not only when an individual moves from one insurer to another but also from one plan to another with the same insurer. Also, the new insurer is required to insure the policy holder at least up to the sum insured under the old policy.
When there are such guidelines set forth by the Regulator to protect the larger interests of consumers, it is important that consumers are vigilant and act so that they stand to gain from these consumer-friendly measures.
The writer works with CAG, which offers free advice on consumer complaints to its members. For membership details/queries contact 24914358/24460387 or helpdesk@cag.org.in
