For those who have just tasted the fruits of mobile number portability here is yet another sweet news. The IRDA, which is the ombudsman for insurance regulation just like the TRAI for telecom, has finally mooted the plan for health insurance portability.
In simple terms this means that you can port your health policy to another provider if you are dissatisfied with the current one. The crux of the matter was that until now you could not do such a thing without voiding the no-claim period spent with the earlier company. However with the portability announcement, by June we can switch to other health insurance providers retaining the benefits of the no-claim period, ideally thereby covering all excluded ailments of the first two years.
This is definitely a step ahead in the right direction for the IRDA. However the process is a bit more complicated than the MNP for TRAI. Already its not difficult to figure out that the insurance companies are a mafia by themselves. Lobby is a more decent term to use for covering up the word mafia. Still the lobby of such companies is so powerful that the government would have to tread quite cautiously while implementing this scheme.
Some of the key questions that likely need lots of thought are:
- Would the no-claim be initially effective? or would there be a hold period for the same?
- Once a person ports his policy to another provider, how long would he have to wait until he switches again? What does he lose in terms of benefits on early switching?
- Can there be a single policy defined by IRDA that is uniformly acceptable and implementable by the umpteen insurance companies which are in the field today?
- What amount of complexity is involved with the logistics of implementing such an operation considering there are only two or three TPAs behind all these insurance companies handling the backend?
- How to enable healthy competition between insurance companies over and beyond the basic uniform policy? As is the case with MNP can there be freebies like increased hospitalization charges covered like higher room rent, or ambulance costs etc?
- The biggest single most important question, can there be a uniform premium for all insurers put together?
Unless the IRDA seriously thinks about all this, this would be an effort which can lead to lots of confusion starting July and would take nearly a year more to stabilize. But if implemented properly and judiciously, with zero room for errors in insuring and claim processes, this would be the best gift Indians can get after a really long wait in the midst of archaic claim management cycles and policy renewals.
For those who have not observed, Reliance General Insurance as an example had a Gold and Silver policy for health insurance for sometime after which they removed Gold citing that not many people are opting for it. The real truth was that they had offered too many benefits under Gold policy and they could not continue in a state of non profit with this scheme. So they yanked it off immediately.
One more thing is that an average cover of 2,00,000 for a year, per person was costing about 2000 bucks a year ago. But within a year, citing 100% claims, the lobby (mafia) of insurance companies have succeeded in getting their way for a four fold increase in premium. In the above example it now costs 8000 bucks to cover the same 2 lakhs. So you can judge for yourself how you would be taken for a ride by the insurance lobby and how important it is that the IRDA brings in portability amongst these companies with uniform premium rates and policy plans.
This will be an exciting year to see how this reform is going to shake up the insurance market !
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