THE PLUS POINTS
Till now,policyholders were reluctant to switch to a new health insurer mainly because the transfer of the waiting period credit for pre-existing diseases (PED) was generally not allowed.Typically,pre-existing diseases are covered only after one to four years of the policy being in force,depending on the company and the illness.This is referred to as waiting period in insurance industry parlance.Portability will allow policyholders dissatisfied with their insurers services be it with premiums or claim settlement to migrate to another insurer who will not insist on them biding their time for four more years to get the PED cover.For instance,if you decide to shift to another insurer after completing three policy years,and the existing policy undertakes to cover PED after four years,you will have to wait for just one more year to be eligible for PED cover under the new policy.Health insurance portability will help policyholders as they will gain from a wider choice.It will also benefit the insurance industry in the long run, says Sanjay Datta,head,customer service,health and motor,ICICI Lombard.The penalty of the portability proposal being deemed accepted in case the insurance company does not respond within the timeline will make the process very efficient, says Mahavir Chopra,head,e-business,Medimanage.The most interesting aspect of the guidelines,perhaps,is that they allow a switch from group mediclaim to individual or family floater policies,and let the policyholder to retain the waiting period credit.Since many families depend solely on their employers' group policies,such transfers will help them have a policy of their own without having to wait for the four-year period for coverage of pre-existing diseases to come to an end.
WILL IT REALLY HELP
NOT ALL BLACK AND WHITE
Confusion prevails over the definition of pre-existing illnesses in certain cases.Say a policyholder has undergone treatment for a disease and his/her insurer has settled the claim.If he/she decides to migrate,will the new company deny cover for the disease for which a claim has been made This is a grey area that needs clarity.If the new insurer does not offer cover without a waiting period for ailments suffered during the continuous running of the old policy,then senior citizens and others with chronic ailments would not be able to enjoy portability in the true spirit, says Chopra.If the new insurer is aware of the fact that the policyholder was suffering from a pre-existing condition and decides to accept the proposal,in practical terms,it will be difficult to reject a claim on the grounds of pre-existing diseases, says Subrahmanyam B,head,health insurance vertical,Bharti-Axa General Insurance.However,Gai says the new insurer will have to extend cover to these illnesses,too.This is in view of the provisions of clause 2.If a disease is already listed as pre-existing in the existing policy,then the new insurer will also treat it as pre-existing. Under the definition of PED,the waiting period is across any insurer.Therefore,if the new company accepts the risk,the time-bound PED would apply and PED would be covered, says Antony Jacob,CEO,Apollo Munich.While measures taken by Irda are commendable,health policyholders will have to wait for some more time before they have complete freedom of choice.But,at least it is a desirable beginning.
Health Insurance Portability is Welcome,but...
Some limitations,grey areas may prevent it from being implemented in its true spirit
Portability will allow policyholders to switch to another company and carry forward the waiting period credit for the pre-existing diseases cover.Till now,policyholders have been forced to stick to their insurer for fear of losing continuity benefits
If the new insurance company does not communicate its decision on the portability proposal within the stipulated time,it becomes obligated to accept the proposal
Even policyholders covered under employers' group mediclaim can now transfer the waiting period credit and move to individual or family floater health policy
It is up to the insurers to accept or reject a proposal for a switch.Those dissatisfied with an insurer's claim settlement record and wishing to migrate may not find takers
Insurers are free to levy premiums as per their underwriting norms.Hence,those in high- risk categories,like the elderly,or those with illnesses cannot expect reasonable premiums while porting
Those with accumulated no-claim bonus could be at a disadvantage as the new insurer will levy the premium applicable to the enhanced sum assured
While porting from a group cover,the insured will have to first switch to an individual cover of the same insurer.Only after a year can they then move to an insurer of their choice
The guidelines are confined to PED cover credit.They are silent on how other features like exclusions and loading clauses,etc,can be factored in
Insurers should clear migration proposal in a specified time,but there is confusion over calculation of the time limit.Some say the guidelines stipulate 15 days,others feel it is 35-40 days
Clarity is needed on whether new insurer should immediately cover diseases contracted during existing policys term
Bear in Mind
Submit your proposal for migration 45 days before renewal of your existing policy Porting will be possible only if policies are maintained without a break
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