Mr. Antony Jacob's Interview in NDTV

Health Insurance Goes Portable

Eshwar Bharadwaj Chand often runs into trouble with his existing health insurance provider.  A resident of Ahmedabad, the 62-year-old travels to Delhi for chemotherapy at a corporate hospital every month. The problem arises while making claims from his insurer in Ahmedabad. “The settlement is invariably delayed. Every time I make a claim, it goes to the local branch and, then, to the Delhi office. I have to keep following up with the local representative to ensure that the documents don’t get misplaced. I’m fed up and want to switch to another insurer but, considering my age and pre-existing problems, I stand to lose a lot,” rues Eshwar.

Not anymore. With health insurance portability coming into play in October, policyholders like Eshwar can happily switch to another insurer without losing out on any benefits. “In case a customer believes there is a gap between what is promised and delivered by an insurance company in terms of service or benefits, he or she can now move out and opt for a similar plan with another insurer,” says Antony Jacob, CEO, Apollo Munich Health Insurance.

Prior to portability, if policyholders were not content with their insurer, they had to buy a fresh policy from another provider and go through the requisite waiting period (ranging from one to four years depending on the nature of the pre-existing diseases) to avail the benefits.

“Earlier, customers looking to switch insurers were at the losing end when it came to coverage for pre-existing illnesses and time-bound exclusions. It has now been clarified that policyholders have the right to transfer the credit gained by them for pre-existing conditions and time bound exclusions,” says Subrahmanyam B, Vice President & Head, Health Vertical, Bharti AXA General Insurance.

Benefits of porting include cumulative bonus acquired from the previous insurer. For example, if you are paying a premium of `1,000 for a `1 lakh health policy with zero claims in the past three years, you will continue to pay `1,000 even as your cover gets enhanced to `1.3 lakh. Earlier if you switched insurers, your cover would  remain `1.3 lakh, but you would have to pay a higher premium of, say, `1,300 as the no-claims bonus would  not be carried forward.

“Your earned cumulative bonus may undergo a change based on the portability and underwriting guidelines of the new insurer. Ensure that you get complete advantage of all existing benefits before porting your policy,” says TA Ramalingam, Head, Underwriting, Bajaj Allianz General Insurance.
However, you cannot switch insurers any time you want. You need to apply for portability 45 days before renewing your existing policy. According to Sanjay Datta, Head, Customer Service, Health and Motor, ICICI Lombard GIC, health insurance should be viewed as a long-term relationship and a customer should not switch just because of pricing or loading due to a claim. “One should evaluate the product features and service levels according to one’s requirements and switch only if there is a marked
difference in any of these parameters,” he reasons.

Insurers believe portability will improve customer service standards, and enable an easier buying process, prompt delivery of policy document and hassle-free claims.

“Portability will also serve to improve service standards in the industry as companies run the risk of losing customers if they fail to deliver on service parameters, whether it is in relation to documentation or claims,” says Subrahmanyam. “Portability will also improve innovation in the industry. Companies looking to differentiate themselves will be required to come up with new products and add-ons to attract customers.”

Insurers may even begin to customise products, while some features such as covering doctor consultation fee, transportation and accommodation costs may become tandardised. Going further, they may start aggressive pricing to attract new customers while retaining existing ones.

“We have an inhouse set up for claims processing last November and our efforts are to provide better services to customers. With our service levels increasing, we do expect customers to come to us. The shift will be mainly in our retail portfolio and we expect at least 10 per cent growth in new members due to portability,” says Shreeraj Deshpande, Head, Health Insurance, Future Generali India Insurance Co Ltd.

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