Health Insurance Portability

At present if you change your insurance provider, you are treated like a new customer. Norms for a new policy are applied e.g. a higher premium would be applicable depending upon your age and if you had acquired a disease during earlier policy, it is seen as a pre-existing one and you have to complete the stipulated period before the policy comes into force.

Major factor which was preventing customers from transferring their health Insurance policies to another company was the possibility of losing continuity of benefits such as coverage for pre-existing disease or illness. Therefore the mediclaim holders fear to shift to new insurer inspite of not satisfied with the services of the existing service provider.

Thanks to insurance regulator IRDA’s nod for portability of health insurance policies. It is more like mobile number portability as customers who have long been frustrated with their insurers, change insurer from 1st July 2011 and  can now switch the policy to an insurer of their  choice with same premium and same conditions. Under portability the financial bonuses, pre-existing disease requirement will also get carried forward.  Insurance Companies will provide all records and claims history of customer to new company which will bring more transparency.

Portability would ensure better competition among insurers which will benefit customers in long run. Portability would make industry more competitive, transparent and innovative. There will be better quality of services. Over charging and variation in rates of premium would be reduced. Portability will also create a level playing field in the industry in long run. The health cover portability would set new service standards and delivery mechanisms for insurance players.

What is portable:

1. Credit from the period elapsed excluding pre-existing disease will be carried forward to new insurer .
2. New insurer will provide cover for same Sum Insured, same terms and conditions with  same premium of the previous insurer. However, for an extra sum insured and extra cover, you will be a new customer.
3. Porting request will be completed within 3 working days and claims data available to counterparts within 7 working days.
4. Typically when you buy a health cover, you can not make any claim in the initial period of 30 days for sickness/illness ( in case of accidental injury, no waiting period)  Health Insurance Portability will waive waiting period.
5. Waiting period on renewal policies will also be waived most importantly the waiting period on pre-existing disease will be done away with.
6. Only common product will be portable so insurance companies should have common products to make shifting process smooth.
7. Under portability  accumulated bonus can be carry forwarded.

Portability is in the best interest of consumers and an impetus to focus more on customer value and engagement. Customer gets more choice and can demand better services and option of moving to other insurers.

Now companies will have to constantly improvise their efficiency standards in terms of customer engagement and relationship and ensure that the customers do not move away from them citing service deficiency. Therefore, insurance companies have started greasing up their service offerings to keep their flock of customers together with the onset of health Insurance portability from July 1st 2011.

Service is going to play a major role as health  insurance being fastest growing segment. Health insurance premium has increased by 49% at Rs 7803 crores in 2009-10 against Rs 3976 crore in previous years. Claim ratio has also decreased to 96% from 103%. Share of group floater policy is 51% and individual policy is 25%.  Claim for circulated diseases was paid for Rs 758 crore and digestive disorder was for Rs 501 crore.

Insurer will have to pull up their socks and offer their better services to ensure that they do not lose their customers to other players, to look inwards into their operations and set things right.

By : G.M.Garg, Regional Manager, United India Ins. Co. Ltd. R O , Jaipur, Published in The Insurance Times, April, 2011