Health Insurance Goes Portable

[Apollo Munich CEO]

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.