A few days ago, I read a news story about a cancer survivor’s struggle to get an insurance claim for a targeted therapy using Trastuzumab. She was successful in getting a partial claim after a legal battle. Despite it being a victory, in most cases, it often does not feel so for the policyholder. Health insurance is increasingly becoming a mainstay support for health expenditure. Policyholders buy high sum assured to hedge against an accelerating medical inflation, advancement in medical treatment, and complex critical illnesses. The rapid medical progress means that some of the medical treatment undertaken by patients may not be prevalent at the time of policy design and underwriting. However, this should not become an insurer’s excuse to reject claims. If so, the insurer fails to provide due indemnity. Aside from financial coverage, one of the primary objectives of insurance is to deliver peace of mind. The prospect of legal fights is hardly any assurance.
The regulator had taken note of the increasing health insurance claim disputes and standardized health insurance exclusions in 2019. This was an extremely forward looking measure. The regulations specifically asked insurers to cover modern treatments. Advance technology methods such as robotic surgery, deep brain stimulation, and stem cell therapy were explicitly mentioned in the regulations. For cancer, treatments such as oral chemotherapy, and immunotherapy (monoclonal antibody to be given as injection) were covered. This significantly removed ambiguity about coverage. However, the regulator left a window for insurers to cap these coverages to a pre-defined limit.
The capping provision is misapplied in some cases. Considering these are advanced treatments, they ought to be expensive. High sum assured is expected to cover the more expensive treatments. Putting a capping of ₹5 lakh for modern treatments, while offering a sum insured of ₹20 lakh is counter-productive. A few insurers have made it a standard policy to cap 50% of the sum insured for modern treatment. This obviously helps them get more customers by offering lower price, but creates negative feedback loop for the category. Unsuspecting policyholders do not understand the implications of such capping at the proposal stage. Worse, they sign-up being unaware. Besides the capping, some insurers are being creative with the interpretation of these exclusions. One insurer rejects oral chemotherapy claim if the treatment is not administered without being hospitalized. This is outrageous. Why should one need to get hospitalized for oral medication! Advancement of medical care has led hundreds of surgeries to be converted into day care procedures or ambulatory care. The basic rule of 24-hour hospitalization, for standard health insurance, does not apply for day care treatments. The same principle should apply for oral chemotherapy, more so because the regulatory intent was to cover all kinds of treatment process whether “as in-patient or as part of domiciliary hospitalization or as day care treatment in a hospital.” The insurer’s interpretation would not stand in the court of law. The question is: how many people would survive cancer and have the energy left to fight the insurer? Should the insurer be allowed to continue to benefit from this situation?
The world of cancer treatment saw a breakthrough when the Indian drug regulator approved immunotherapy using ‘CAR T-cell’ therapy in October 2023. The treatment has shown the ability to eradicate advanced leukemias and lymphomas. A leading hospital in Mumbai was able to deliver this breakthrough treatment for around ₹44 lakh. This is almost one-tenth the cost of same treatment abroad. I checked whether this is covered by insurers and got strange responses. One said that this is ‘advanced treatment’ and not ‘modern treatment’ and so not covered by the policy. Another one enquired about the stage of cancer, and later denied coverage. Neither response made sense. The treatment is no longer experimental. Why should it not be covered! Regulations specify that “insurers may endeavour to cover any other modern treatment methods.” For clarity, it would be appropriate for insurers or the General Insurance Council to come out with a proactive notification or clarification about coverage of such procedures. It will certainly bring more transparency and goodwill to the sector.
Even if the above suggestions were to be incorporated, indemnity policies are not adequate for critical illnesses. Sometimes patients may have to undergo experimental treatments which is clearly outside the policy scope. A large amount of non-hospitalization medical expenses and non-medical expenses are incurred for critical illnesses. This increased cash outflow coincides with an impaired income earning ability of the patient. For these reasons, a fixed benefit critical illness plan will be beneficial. Such a plan would pay the sum assured when a specified critical illness is diagnosed. The patient is free to use the money as they deem fit. This gives substantial flexibility to the policyholder and due coverage.
Health insurance is a specialized field. Effective delivery of service requires solid actuarial pricing, an understanding of medical care, and a proactive service. Each of these hold equal importance. The most difficult to build is the service quality. This entails transparent and proactive communication, a well-trained support staff and a predictable claims process and experience. The industry needs to up the game in customer centricity, and reduce its avoidable legal disputes. It would be more reassuring to see an insurer’s advertisement highlighting coverage for CAR T-cell therapy, rather than a news story about a policyholder’s fight to get a claim for oral chemotherapy.
Abhishek Bondia is principal officer and managing director, SecureNow.in
