Moving your health insurance policy?
by 23, August, 2010 0 |
Photo credits : David Hilowitz
Having a continuous health insurance policy provides the policy holder with benefits which cannot be transferred to a new policy because portability is nonexistent at this point. So if you opt for a new policy i.e. policy from another insurance company, the likely impact will be as under.
On July 1st, four public sector insurers, New India Assurance, Oriental Insurance, United India Insurance and National Insurance removed 150 hospitals from the preferred provider network (PPN) i.e. the network through which the insurance companies provide policy holders cashless insurance facility. This was essentially because private health insurers were inflating bills of patients that were to be paid by the insurance companies through the cashless medical insurance cover. Health insurance segment of the insurance business has been bleeding and insurance companies want to take necessary steps to curb malpractices that are emerging because of the cashless facilities offered by insurance companies which are bleeding them even further.
Removing the hospitals from the PPN means that it will narrow the universe of hospitals the policy holder can access to avail of the cashless facility. If the policy holder accesses service from any of the hospitals not present in the PPN list, they will have to pay the hospital first and then get the amount reimbursed. This is a severe setback for policy holders because they will have to make sure they have the financial means to pay off the dues of the hospital.
Does this mean that mean that policy holders should shift to insurance companies having a broader PPN network so that they do not have to worry about having the financial means when an emergency occurs?
Having a continuous health insurance policy provides the policy holder with benefits which cannot be transferred to a new policy because portability is nonexistent at this point. So if you opt for a new policy i.e. policy from another insurance company, the likely impact will be as under.
- You will have to wait longer to get coverage of pre-existing diseases: Most insurance companies will cover pre-existing diseases such as diabetes or hypertension only if you have a continuous policy with them for a particular tenure which could range between 2 years and 5 years. If you move to a new insurance company, you will have to start afresh i.e. your association with the old insurance company will not be transferred to the new policy, so you start from scratch, and hence you will have to wait longer to be eligible for the pre-existing disease benefit.
- Formalities: You will have to run through all the medical tests and it can so happen that some diseases may not be covered under the new policy.
- Higher premium: If you switch to a new policy, it is likely that your premium amount will be more than your existent policy because your track record with the old company will not be considered, so you will not get any benefit of having claim free years in the past. You will also stand to lose the entire no-claim bonus accumulated with the old company if you haven’t claimed it as yet.
Health insurance portability is not available currently and hence you cannot transfer the benefits on your existing policy to the new issuer. So till such time portability is not introduced, moving from one insurance player to another, turns out to be an adverse bargain for policy holders. The regulator is working towards making health insurance portable. So policy holders, the wait may well be worth.
