Last week I helped a friend sort out a health insurance dilemma her friend found herself in. A middle-aged single lady employed part-time, Meena, takes care of her aged dependant mother. Meena’s hospitalisation claim was rejected because she had not declared a certain treatment she had undergone before the policy was taken.

The policy itself had been running for years and the treatment was of older vintage. Meera, who was completely cured, did not think it was relevant, and did not remember to disclose it in her health insurance proposal. When the claim was repudiated, she actually wrote to the insurer, asking very earnestly that her oversight may be overlooked.

The insurer, did not. However, they did write back saying they would be willing to continue her coverage, but with her specific health condition as an exclusion. What is more, they would protect her accrued benefits under the current policy. Benefits like having finished the waiting period for pre-existing conditions and her no- claim benefits that usually accrue as higher sum insured.

At this point, our common friend asked me what best advice I could give Meena. No, Meena was not interested in pursuing the rejected claim. But at some point, she was not going to be able to afford to keep hospitalisation policy renewed. Plus, there was the cost of her mother’s coverage.

My common-sense advice was Meena should accept the insurer’s offer and continue coverage without a break. For one thing, it would give her a year with coverage to figure out options. Continuity of coverage is also crucial because, after a break, insurers will look at it as a fresh underwriting proposal and could well turn it down. It is getting harder to get coverage, especially as one ages.

I asked her to request the company to give her enhanced sum insured to serve future needs and also make her coverage of more value since sub-limits erode the coverage we think we have under our hospitalisation policies. In addition, she could also go in for a top-up policy. In fact, she should try to do both for her mother as well, was my instinct.

Back to affordability. This is becoming a vexing situation as outlined earlier in CoverNote. Mass government insurance schemes exclude tax assesses, leaving Meena with no happy solution. Extending benefits under the mass insurance scheme to 70 plus citizens is in the picture now but only in the nature of an election promise.

We also have to wait and see what financial-status conditions are attached. We will look at multi-layered challenges of health insurance and healthcare as well in the forthcoming instalments of CoverNote.

(The writer is a business journalist specialising in insurance & corporate history)

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