a man standing in front of a door: The many confusions and disputes in COVID-19 insurance settlements

© Venkatasubramanian K
The many confusions and disputes in COVID-19 insurance settlements

Abhishek Bondia

“Make sure you assess your viral load based on the CT value,” Biocon’s Kiran Mazumdar Shaw suggested in her blog about ways to manage COVID-19 after successfully recovering from the illness. The Hindu was quick to declare shortly after Shaw’s blog was published that there is “no correlation between CT values and COVID-19 severity.” Such contradictions have been a hallmark of this evolving pandemic. Similar confusion has prevailed in several parts of insurance delivery. At times, this has compounded the issues for the policyholder, who is battling a relatively less understood illness, the social issues attached to it, and limited supply of proper care.

Confusion despite clarification

At the onset of the pandemic, the insurance regulator clarified that all standard health insurance policies cover COVID-19 and asked for insurers to be extremely cautious before rejecting a COVID-19 claim. However, several issues emerged despite such a broad clarification. Would hospital quarantine be covered under insurance, if you are not tested positive but suspected of COVID? Is a claim admissible if a COVID-positive patient is hospitalized to ensure the condition does not deteriorate, but the line of treatment is conservative? Insurance policies generally do not reimburse expenses incurred for observation purpose. If a patient chooses to be treated at home instead of getting hospitalized, would the expenses be reimbursed? In policyholders’ minds, home treatment leads to lower outgo for the insurer. So, they have a commercially rational expectation to have at least the reduced expenses reimbursed. But, in most policies, a minimum 24 hours of hospitalization is required for a claim to be accepted.

Scarcity premium

Scarcity of hospital beds, which resulted in price increases, has been another major source of customer dispute. Several hospitals have unilaterally increased