Commercial Health Insurance

Health insurance policies offered and managed by Non-Governmental Organisations are called commercial health insurance policies. Governmental health insurance is reserved for certain groups and works without a profit orientation.  In contrast to this, private companies offer health insurance that is designed to generate profit from the monthly premiums paid by the policyholder.

 

The Insurance Regulatory and Development Authority in India or IRDA regulates commercial health insurance companies and the market in India. Earlier, the health insurance market was constrained only to governmental organisations. When it was opened to private companies in 1986, there were only two types of commercial health insurance; ESIS and CGHS. At present, there are 27 general insurance, 24 life insurance, and 7 standalone health insurance companies in India. During the Covid-19 pandemic, commercial medical insurance has witnessed a surge in sales.

 

Let us take a look at commercial health plans and their coverage in India. 

Important Update (Dated May 30, 2024) – Good news for Health Insurance policyholders! According to the Master Circular on Health Insurance Business 29052024 rolled out on May 29, 2024 by IRDAI, insurers are to decide on the request for cashless claims within 1 hour of receiving the request. Also, the final claim is to be granted within 3 hours after the policyholder’s discharge from the hospital. Insurers have been directed by IRDAI to establish necessary systems and procedures for this process by July 31, 2024.

 

The Master Circular on Health Insurance Business 29052024 circular is available here - https://irdai.gov.in/document-detail?documentId=4942918

Commercial health insurance companies offer a wide range of health insurance policies depending on the type of coverage, premium amount, and various other features. One who wants to buy a policy can use the help of licensed agents and brokers or buy it directly from the company via online or offline methods. Indian consumers choose a health insurance policy based on the policy premium and desired cover of services.

 

If we check the list of commercial health insurance companies in India, we can find that most of the policies they offer cover in-patient hospitalisation and necessary treatment costs in hospitals. Daycare expenses, doctor’s fees, ambulance charges, room rent, ICU charges, and nursing charges are also covered by many. 

 

You can make a health insurance claim by using either the cashless claim facility or by claim reimbursement. Under the cashless claim facility, you have to take medical assistance and care in any of the network hospitals of the insurer. But, if you are unable to locate a network hospital during an emergency, you can go to any hospital of your choice and claim reimbursement of the charges after discharge by submitting the claim forms and documents to your insurer. 

 

Certain commercial health insurance policies come with deductibles. Such policies have a lower monthly premium. Deductibles are the amount the policyholder has to pay out-of-pocket every year before the insurer pays its portion. These kinds of policies usually cover the majority of medical expenses and save the policyholder from huge debts.

Individual insurance policies are ideal for higher-risk individuals as they do not have a maximum limit for policy renewal. Since the insured sum is divided equally among members in a family floater plan, they carry a lower premium than mediclaim or individual policies. Group mediclaims are helpful for employers because they increase employee retention and offer a free/nominal cost health policy for employees.

Commercial health insurance policies in India cover:

 

1. All in-patient expenses including nursing fees, room rent, ICU/ICCU expenses, doctor’s fees, etc., when the insured person is admitted to a hospital for more than 24 hours.

2. All pre- and post-hospitalisation expenses including doctor’s consultation fees, diagnostics tests, X-rays, etc.

3. Expenses of daycare treatments where the insured person is hospitalised for less than 24 hours.

4. Transportation charges to transport the patient to the nearest hospital up to a certain limit.

5. Expenses for the homecare treatment when the policyholder cannot get treatment at a hospital.

6. Additional coverages like critical illness cover, free annual health check-ups, and certain outpatient covers are also included.

Before buying commercial health insurance, one must check the few pointers mentioned below.

• Insurer’s reputation

A reputed insurer will be registered with IRDA and will have good feedback and ratings. 

• Insurer’s track record

A trustable and reliable insurance company will have a good track record of arranging funds for treatment and must have sold a higher number of health insurance policies. 

• Claim Settlement Ratio

A high health insurance claim settlement ratio of the company indicates that they settle the claim requests swiftly. It is important to ensure that the insurer will pay the claim during an emergency. 

• A wide network hospital chain

It is best if the insurer has a wide network hospital chain since it will help easily access medical treatments using cashless claim facilities. 

• Premiums of the best value 

Instead of looking for policies with the lowest premiums, always check for insurance policies that offer the best value for money. 

• Good customer service

An ideal insurer will have good customer service to provide necessary financial support during times of medical emergencies. 

Health insurance in the commercial sector is wide and has custom-made policy options with a variety of premium options and wide coverage. Choose a policy ideal for you after carefully considering all terms and conditions and understanding the pros and cons.