Pay more for Luxury hospitals

Mediclaim policy premiums may go up substantially if you need treatment at major hospital chains such as Apollo, Fortis, Gangaram, Jaslok, Hindujas, Leelavati, etc as insurance companies are devising new products to break the current cashless deadlock.

Refusing to mediate between major hospital chains and insurance companies on denying cashless treatment to policyholders, Insurance and Regulatory Development Authority (IRDA) chairman J Hari Narayan hinted on Wednesday that premiums for treatment in five-star hospitals are likely to go up.

"If you want to stay at Ashoka Hotel...and avail five-star facility, you need to pay more," Hari Narayan said at a Ficci meeting, justifying the assumed hike in mediclaim policy premiums.

His remarks came a day after the Delhi High Court asked the insurance regulator to sort out the cashless facility to policyholders in major hospitals across the country. The IRDA chairman said there was nothing the insurance regulator could do about it.

Hari Narayan said that he has held extensive discussions with major hospital chains and insurers but it was not an issue for IRDA to address.

Ever since the insurance companies discontinued the cashless facility to its policyholders at major hospital chains IRDA has been stating that it is for the health ministry to regulate over-charging by hospitals and that there is nothing wrong in the insurance companies denying cashless facility as long as they reimburse the claims.

On Wednesday, Hari Narayan went a step further and said in light of the present controversy if the insurance companies decide to revise their premium for treatment at these five-star hospitals, the regulator could not stop it.

"We have long moved away from the administered price regime and it is for the market forces to determine the price of their product," Hari Narayan said, adding that there may be co-payee or higher premium products for these five-star hospitals, which the insurance companies have to decide. The consumers will get a range of products.

So, say for instance you take a Rs 3 lakh limit reimbursement policy, it may invite a different premium for a set of hospitals and altogether different for five-star hospitals. The pricing would entirely be determined by the insurance companies and IRDA will not intervene, according to Hari Narayan.

The cashless facility was discontinued at all major hospitals from July 1 as they refused to lower their rates for many of the standard procedures. Four major PSU insurers which command 80% market share of health insurance are firm and have said hospitals have to agree to the package deals if they need to be on the preferred network service and benefit from the cashless system.

These insurers along with some TPAs have worked out package rates for some of the hospitalisation expenses, which are commonly claimed under health insurance policies and have asked all hospitals to abide by the prescribed rates to be on the cashless facility.

The insurers, 18 of them including the four PSUs, took this extreme step as they annually bled to the extent of Rs 1,500 crore more than what they collected as the premium from the mediclaim policies while settling claims of hospitals across the country.