Portability Of Health Insurance Policies From July 2011

[kesav 127]

Portability of health insurance policies from July this year

Mediclaim policy holders, who are not satisfied with the services of their existing insurance providers, will now be able to switch to another firm easily without any change in the premium outgo, the insurance regulator IRDA has said.

After examining various issues and hearing representations by consumer associations and policyholders, Insurance Regulatory and Development Authority (IRDA) on Thursday said the portability of health insurance policies would come into effect from July 1.

"The Authority has examined various issues involved in the portability of health insurance plan and has issued necessary orders for effecting portability which will be implemented from July 01, 2011," IRDA said in a statement.

The portability facility will allow policy holders to switch over to another insurance company with the same conditions.

"The accepting insurer shall provide cover, at least up to the sum assured in the previous insurance policy," the regulator said.

The new facility will also help those policy holders who stick to one insurer throughout life for fear of losing the cover for Pre Existing Diseases (PED).

"It is essential to protect the policyholders against discontinuity and consequential loss of PED cover by making the health insurance plans portable across the insurance companies," Irda said.

In general, health insurance policies have specific exclusions for PED for a specified period of cover during the initial year, and policy holders do not get this cover in the event of changing insurance firm. It was considered "detrimental to competition".

Irda decision comes after it received several representations from consumer associations and policyholders for enabling portability of health insurance policies. Currently, IRDA allows portability of motor insurance policies.

The main features of portability are :

1. The credit from the period elapsed excluding PED shall be carried forward to the new insurer.

2. The accepting insurer shall provide cover, atleast upto the sum assured in the previous insurance policy.

3. The request for porting the policy shall be completed as per the timelines prescribed in the IRDA (Protection of Policyholders’ Interests) Regulations and guidelines.

source :: http://profit.ndtv.com/news/show/portability-of-health-insurance-policies-from-july-this-year-140312

Looks like TRAI's MNP has set fire on other regulators.

It's portability time......Enjoy

:clap: :clap:

[FEVIN-RAJ 61]

Nice to see, portability is happening every where

[confused_follower 12]

Ab kya logo ki health ke saath bhi khelenge.

Imagine all the problems coming in during Mobile number portability occurring in medical insurance.

Both insurance active

Both insurance non-active

or the worst

3 critical-illnesses covered by old insurer and other expenses covered by new insurer as the porting process not completed

Will Reliance & bharati show the same readiness in Insurance also through Reliance General Insurance & Bharti AXA

[tarun_kabra 204]

That's a very good move, will help improve services of insurance companies.

No doubts there will be initial problems as in MNP.

[KumaarShah 143]

@confused_follower,

Thanks for the good joke in the health sector..... +1 to you

[vishalmcp 8]

guys Enjoy MNP.....

[HetalDP 947]

AWESOME

[digitalnirvana 646]

guys Enjoy MNP.....

HIP rather, acronym for health insurance portability.

Cool for branding, Q: how are you? A: HIP.

[dpak 2]

i guess IRDA have said some big words here if it possible then hats off to them nothing like it....i agree with @confused_follower. Firstly in insurance sector IRDA have laid standard protocols(means process followed by insurance companies to create health insurance products) not the standard health insurance policies(like price of the crude oil same for every one).

insurance is a concept where risk of few shares among to manythere fore every insurance company has mortality or morbidity charge(means "purchase price of forthcoming risk in life" given to company to cover the "risk of uncertainty" i.e premium to get your self insured)which is differs a lot for different companies and for different products(like price of 1 lac cover from max bupa is different from appolo Munich or star health insurance )

To make it simple

A short story follows

Let say maximum treatment in the every hospital is 1000rs for every disease and treatment and i have company ABC with 100 employees(including me) running from past 10 yrs i has experienced that out my 100 employee 10 are on leave most of the times due to medical sickness(big common problem), then i cerated a box name health insurance at my desk..At the salary day i tell every employee to contribute 100 bucks to put in health insurance box which totals about 10000rs i.e enough money to treat 10% of my employees who are randomly on leave due to medical sickness.problem solved. employees are also happy that they dont have to shell out every time 1000 bucks medical treatments which is a hell lot of individualistic burden on every employee.

now guess what if a 2 or 3 employee leaves the job i have to raise the contribution to meet the expenses which will e a burden for certain low pay grade employees

there fore in my opinion Health insurance portability happens only when irda release a standard mortality or morbidity charge for every disease and treatment(which would be tough task)

PS-: short story is just example there are lots of complexities and variations in insurance domain.if it happens successfully then customer will be king in here also So ENJOY READING

[rajanmehta 4,056]

How To Get The Most Out Of Health Insurance Portability

Health insurance portability becomes a reality

Last year, several customers of a private general insurer were up in arms against its decision to increase health premiums. They went to town crying themselves hoarse over the disproportionate hike, but many could not switch to another insurer.

This was because they would have had to forgo critical continuity benefits. However, cases like these could become a thing of past once health insurance portability becomes a reality from July 1, provided it is implemented by insurers in its true spirit.

More power to policyholders

The key issue that prevents policyholders from insurer-hopping at will lies in the pre-existing disease (PED) cover offered by health insurers. In most cases, claims arising out of such pre-existing illnesses are reimbursed only after a waiting period of 3-4 years. A pre-existing disease is defined as any ailment or condition that the policyholder was suffering from, within 48 months prior to buying the policy. And, the period during which the insurer will exclude coverage to such illnesses – typically around 3-4 years – is referred to as the waiting period. So far, policyholders who switched loyalties to another company were treated by it as new customers, thus requiring them to go through the waiting period all over again. Suppose, you want to shift to another insurer after three years of paying premiums under a policy with a waiting period of four years.

Now, if the new policy too prescribes a four-year-waiting period, you would be at a considerable disadvantage. This is because, instead of waiting for just one more year for the pre-existing illness coverage, you would be forced to bide your time for another four years. With portability coming through, the odds are now stacked in your favour as you can carry forward the PED cover 'credit'. Under the changed circumstances, the waiting period in the new policy would be reduced to merely one year in the above example. There are some limitations though. Irda has directed that the credit in terms of waiting period will be restricted to the sum insured (including bonus) under the existing policy. Explains Ajay Bimbhet, MD, Royal Sundaram: "Say a policyholder has an existing policy with a sum insured of Rs 2 lakh with an accumulated bonus of Rs 40,000 and now, he wishes to go in for a higher sum insured, say Rs 4 lakh. Here, the credit for the waiting period shall be only in respect of Rs 2.4 lakh (existing sum insured & bonus) and not for Rs 4.4 lakh (new sum insured & bonus)."

Making the switch

No specific procedure as such has been laid out by Irda. "The policyholder will have to go through the usual process of applying to the new insurance company. The forms are likely to have a section to capture information regarding previous continuously renewed policies to enable portability," explains Mahavir Chopra, head, personal lines and e-business with insurance broking firm medimanage.com. "Details on previous coverage would also be noted.

Customers may have to attach proof regarding previous continuous coverage." The insurer will have to acknowledge the receipt of your application for portability within three working days. Likewise, the companies have to communicate their decision within 15 days. If the policy lapses due to delay in processing the switching request, this insurer will have to accept it.

Impact on the sum insured...

According to Irda, those wishing to switch will be assured of health cover equal to at least the sum insured in the previous policy. But, this may not always be the case. "There is no obligation on the part of the new insurer to match the sum insured if it has not filed such a product with Irda.

If your current cover is Rs 5 lakh and your proposed new insurer has filed a product with Irda with maximum sum insured of Rs 3 lakh, you cannot force the new insurer to offer a Rs 5-lakh-cover," says Subramanyam B, V-P & head, health vertical, Bharti-AXA General. "The new insurer will offer portability in the closest product available," adds Sanjay Datta, head, health insurance, ICICI Lombard.

…and the fringe benefits

There are other continuity benefits like no-claim bonuses and free medical check-ups too, but some confusion on how portabilitywill affect these persists. "The circular issued by Irda is vague. It appears that the new insurer would have to match the sum insured. But the terms and conditions governing the policy would be in accordance with what the insuring company offers. So, my interpretation would be that on migration, if the insuring company offers no-claim bonus, the consumer would get that benefit; otherwise not," says consumer rights activist Jehangir Gai.

However, ICICI Lombard's Datta is of the opinion that the new cover would include the no-claim bonus. "If the policyholder has earned a no-claim bonus in terms of additional sum insured, then the new insurer providing portability has to offer a product with minimum sum insured equivalent to the base sum insured plus bonus (i.e. additional sum insured), as available with the policyholder in the expiring policy."

The flip side

The intention of the regulator in allowing portability may be honourable, but it still leaves much to be desired, causing some industry-watchers to be sceptical about its success. "Unless regulations are framed for enforcing the portability of the policies, it is not going to help at all. Moreover, the 15-day time is given for communicating the insurance company's decision of a proposal submitted by a consumer for portability, which would mean that the discretion vests in the insurance company whether or not to accept the proposal for portability.

All that is required is that the decision must be communicated within 15 days from the date of receipt of the proposal," points out Gai. Also, while increased competition, post implementation of portability, could benefit young and healthy individuals , those in the higher age brackets may not be so lucky. "It is not likely to help policyholders in the older age bands (say, 50 and above) and those who suffer from pre-existing ailments. Such proposals are likely to be rejected by the new insurance company," feels Chopra.

Lack of clarity

Then, there are some grey areas. "Clarity is required on whether underwriting would be allowed for portability proposals; if portability will be offered from group to retail health products and similarly from benefit products like hospital daily cash to indemnity health products; and whether portability has to be provided for first one/two year exclusions too," says Datta.

"We expect more clarity on binding the insurance company of the expiring policy to provide the required information to the new insurer in specified time limits, so that smooth portability can operate. Any mischief here could result in major hiccups in porting the policy," says Chopra.

Exercise caution

Loopholes abound, but it is a step in the right direction. However, for it to work in your favour, you need to plug all the gaps at your end. You need to ensure that you submit the request for portability to the insurer of your choice well before the renewal date. Any consequent delay in processing and rejection by the new insurer could leave you unprotected.

"Since 15-days' time is given for processing the proposal of portability, the application should be made around one to two months prior to the expiry of the existing policy," says Gai. Also, you need to make efforts to continuously renew your policy by regularly paying the premiums so that it remains eligible for portability. Finally, study the policy offered by the new insurer and take a call on the trade-off between the existing benefits and any likely increase or decrease in premiums in the new policy.

Source: Economic Times