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.
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.
Indemnity plans and defined benefit plans are the two different types of commercial health insurance plans in India.
Traditional health insurance policies that cover hospital-related expenses up to a maximum sum insured are called indemnity plans. A few examples are:
Hospital-related expenses incurred as a result of sudden sickness and accidents are covered under Mediclaim policies.
Individual Health Insurance policies where the medical expenses of only a single individual are covered.
Under a family floater policy, medical expenses of the entire family are covered and the insured sum is equally divided among the individuals.
Group health insurance plans purchased by large-scale companies for their employees come under this category.
When the policyholder gets a lump sum amount as compensation for the detection of a particular illness or gets a considerable sum of money for medical treatment as health insurance, such policies are called defined benefit plans. Some examples are:
In critical illness insurance, a lump sum amount is paid to the insured person if critical illnesses such as cancer, heart attack, kidney failure, major organ transplant, etc are diagnosed.
In Personal accident insurance, in case of accidental injury or death of the insured person, a huge amount will be paid to the insured person’s family.
Upon hospitalisation, a daily hospicash allowance up to a certain limit is provided.
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:
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.
All pre- and post-hospitalisation expenses including doctor’s consultation fees, diagnostics tests, X-rays, etc.
Expenses of daycare treatments where the insured person is hospitalised for less than 24 hours.
Transportation charges to transport the patient to the nearest hospital up to a certain limit.
Expenses for the homecare treatment when the policyholder cannot get treatment at a hospital.
Additional coverages like critical illness cover, free annual health check-ups, and certain outpatient covers are also included.
Some of the common exclusions in commercial health insurance policies are:
Any expenses arising out of hospitalisation without a doctor’s recommendation.
Pre-existing medical conditions till the end of a certain waiting period.
Self-inflicted injuries or injuries due to suicide attempts.
Overseas treatment expenses.
Cosmetic or plastic surgeries except occurring due to accidents, burns, or cancer.
Gender change treatments.
Injuries arising out of adventure sports.
Cost of dietary supplements and substances.
Before buying commercial health insurance, one must check the few pointers mentioned below.
A reputed insurer will be registered with IRDA and will have good feedback and ratings.
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.
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.
It is best if the insurer has a wide network hospital chain since it will help easily access medical treatments using cashless claim facilities.
Instead of looking for policies with the lowest premiums, always check for insurance policies that offer the best value for money.
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.
The Insurance Regulatory and Development Authority of India or IRDA regulates all kinds of insurance policies in India.
Some of the most common examples of commercial health insurance plans in India are mediclaim insurance, family floater insurance policy, group mediclaim, critical illness insurance, etc.
There is no difference between commercial and private health insurance. Health insurance policies provided and administered by private companies and Non-Governmental Organisations are called commercial health insurance policies.
Traditional health insurance policies that cover hospital-related expenses up to a maximum sum insured are called indemnity plans.