What are the Benefits of Health Insurance Portability?
Benefits of Health Insurance Portability include - Waiting period for pre existing diseases is portable i.e. time spent with previous insurer for pre- existing disease will be considered.
- Initial 30 days of waiting period when no cover is provided will be waived off in case you switch to another health insurer.
- At least same sum assured (with bonus) will be given by new insurer.
Benefits of Health Insurance Portability for the Customer
People who will try and opt for other insurers also have to be aware that though most of the major benefits are or will be transferred to the new insurers but sub-limits or features that your old insurer would have provided you may not be transferred.
Take an example - if a customer plans to shift from an insurance company ABC which does not have sub limits on the hospital room rents but the new insurer XYZ has such limits then the customer will have to accept these changes in the new policy.
For policyholders who want to change to a different health insurer, particularly if they have acquired a chronic illness, they may need to pay higher insurance premium to get the same cover.
In addition to this the other benefits of portability include:
- More competitive premium pricing by health insurance providers
- Customer oriented services
- More innovative products will be in the offering.
- More transparency due to sharing of information across insurers.
- Carry forward of bonuses
What does Health Insurance Portability mean for Insurance Companies
While the process seems quite simple for the customer, but the execution for all the health insurance providers not without obstacles.
The competition created means that the customer may shift to the next cheapest option available. This would mean a need to provide a more robust electronic customer data management system (this now is mandatory requirements).
With the possibility of the customer shifting to another insurer year-on-year the only major way for the companies would be to provide a wider network of hospitals and coverage's along with superior customer service. By providing this to the customer, they will be able to retain their more profitable and loyal customers.
Health insurance portability is a good thing to have as a consumer, but they should also ensure that they use this choice of theirs more efficiently and with a lot more thought process , as other than pricing of the policy, there are a whole lot of other factors which needs to be taken into consideration.
Portability of Benefits
At present, changing insurer means buying a new policy. So waiting periods on pre-existing or specified ailments is applicable for the new policy as well. For instance, say, you bought a policy from insurer X two years back but now want to move to insurer Y. Insurer Y will treat you as a fresh customer and not let you carry forward two years from the policy of insurer X. So for treatment of specified medical condition such as cataract for which the waiting period is two years, you will have to wait for two years again with insurer Y.
Once portability is available, you will be able to switch to insurer Y without losing out on the waiting period. So in the above example, you can use your health insurance policy from insurer Y immediately for cataract. Customers should have the choice to move across insurers without any loss of credits they have accumulated on waiting period and bonus on the health cover.
All insurers will have to acknowledge a request to port the health insurance policy within three working days and make data on claim details available to the counterpart within seven working days.
What’s Portable
Waiting period: Primarily waiting period on pre-existing diseases is portable. To illustrate, say, a specific disease has a waiting period of two years in policy X and three years in policy Y. In this case, policy Y can exclude the disease for only one year if the policyholder has already waited for two years in the previous policy.
Sum insured: For the same example above, say, you had Rs. 2 lakhsas sum insured in policy X and you opt for Rs. 5 lakhs in policy Y. Here you will get a claim benefit of up to Rs. 2 lakhsafter a waiting period of a year for pre-existing diseases. Full claim benefit, i.e Rs. 5 lakhs on these diseases will be available only after two-year waiting period. However, for other diseases, full claim benefit will be available immediately. The sum insured carried forward will also include the no-claim bonus that the previous insurer would have given you.
Initial waiting period: The one-time initial waiting period of around 30 days, which most insurers have, will also get waived off in case a customer decides to port policy. The credits in this case can be carried forward too.
The regulator has also specified that a delay in porting on the part of insurers will not be considered as a break in the policy and the new insurer will have to give portability benefits instead of treating the customer as a new.
What’s Not Portable
Remember that you can only port credits on waiting period on pre-existing ailments and not features of the policy. While buying a new policy, the features of the new policy will apply
