Health Insurance And The Cost Of Treatment For COVID-19 In Private Hospitals

In the last few days, the Research Wing of the Insurance Foundation of India has been receiving queries from health insurance policy holders and they are keen to know what will be the cost of treatment for Covid-19---in case the need arises and they decide to go to a private hospital for treatment vis-a-vis a government hospital. The question is very simple but the answer is quite complicated as the cost will depend on many factors: City where treatment is to be taken, Age of the patient, Is the patient having some pre-existing diseases like Cardiac, BP, diabetes? What is the level of Covid-19 at present in the patient?—Is it at the initial stage? Has the infection become complicated? Is he going to be in ICU or will he be on Oxygen support or will he also need ventilator support?

The findings of the study are both interesting and an eye-opener. In government-run hospitals, the cost for Covid-19 treatment is zero in all tier 3 (districts/towns), tier 2 (state capital cities like Lucknow, Bhopal, Chandigarh, Patna, etc) and tier 1 (metro cities like Delhi, Mumbai, Chennai, Kolkata, Hyderabad, Bengaluru). The study found that cost of Covid-19 treatment in private hospital wards in tier 3 towns would cost Rs 0.8 lakh, in tier 2 state capitals would cost Rs 1.5 lakh and in metro cities would cost Rs 2.5 lakh.

Similarly the cost of Covid-19 treatment in private hospital rooms would cost Rs 2 lakh in tier 3 towns, Rs 3 lakh in tier 2 state capital cities and Rs 5 lakh in metro cities. Covid-19 treatment in private super-speciality hospital rooms would cost Rs 7 lakh in tier 2 state capital cities and Rs 8 lakh in metros. In private super-speciality hospitals with ICU and ventilators the cost would be Rs 9 lakh in tier 2 state capital cities and Rs 12.5 lakh in metros. In all the above cases, the assumption is that treatment duration can be as high as 15 days and if there are complications due to pre-existing diseases.

There are many reasons why a Covid-19 patient would opt for treatment in a private hospital. An individual or a family might have been patronising a private hospital or certain doctors for many years. This is because they have faith in doctor or hospital . Another advantage is that doctors know the medical history of the patient very well. Besides, the family might have some prejudice that government hospitals do not offer medical care or logistical facility on par with a private hospital. When a person is getting admitted to a hospital he should be in high spirits so that his recovery is expedited. On the other hand, if you put him in another facility---in this case a government hospital, then from the very beginning you are putting him in a negative syndrome---which is not desirable for faster recovery. 

Another reason can be that family members may like to have a patient admitted in a private hospital which is nearer to their home and in the Indian set up family members want to visit the hospital every day. In the case of Covid-19 patients, meeting of the patient with family members is not advisable. Even then family members have the desire to meet the doctors to enquire about the recovery status and have high degree of satisfaction. We generally find that families who can financially afford or who have Health Insurance policy will like to go to a private hospital when the need arises.

How should a Covid-19 patient best utilise the existing health policies and what do they include and cover? The existing health Insurance policy with an individual, a family or a corporate group policy covers the treatment provided hospitalisation is for more than 24 hours. This is the basic condition.

Normal Health Insurance Policy covers pre-hospitalization expenses (initial doctor consultation, diagnostic lab), all treatment expenses---ward, shared room or single seated room, ICU, ventilator, oxygen, medicine, doctor charges, meals etc. This also includes ambulance charges. After recovery, when the patient comes back home, even then diagnostic tests, consultation and some medicines will be required. All these expenses called post-hospitalization expenses for 60 days from date of discharge are also payable by the Insurer.

Various insurance companies such as Star Health & Allied Insurance, Bharti AXA Insurance, ICICI Lombard, Reliance General Insurance , Religare Health Insurance and Digit Insurance have introduced Covid-19-specific insurance policies. Some of these companies might have stopped sale of these policies on reaching number of sold policies as these products are issued under Sand Box scheme of the Regulator. These policies are fixed benefit covers, which offer a lump sum on the diagnosis of the disease and end after the amount has been paid. The sum assured varies from Rs 21,000 to Rs 5 lakh, with annual premiums varying from Rs 149 to Rs 6,000 or so. Validity of the policy is 1 year.

If someone has to consider which health insurance policy is to be bought, then naturally it is better to go in for normal health Insurance policy which covers all diseases including accidental hospitalization. It is better to take a long term perspective and go in for higher sum (which can also include top up as well as super top up policy) as far as your pocket permits. It is better to buy Health Insurance now---it is expected that in the near future premium will increase by 10% to 25% during April-June 2020 period.

According to our information private labs are doing a good job in testing/tracing of Covid-19 patients. Private Diagnostic Labs are supporting the government hospitals in a big way. As per the medical protocol, this test can only be conducted when the doctor has seen the patient and has given the prescription for the test to be conducted. For persons who are having certain cards (like Jeevan Aargoya or Ayushman) under government directions private labs are conducting the test without any charges. Normal patients will have to pay Rs 4,500 for every test. We suggest that those who have a Health Insurance policy should keep the doctor’s receipt, prescription, lab receipt, lab report carefully with them even if it is negative. If the patient continues to have symptoms there is a possibility that after 2 days the doctor may send the patient for repeat test and it may be positive---which means the decision to get the infected person admitted into a hospital. 

Then all these payments (doctor, lab charges) are payable under Health Insurance. Our survey reveals that persons will like to avoid going to a crowded government hospital for diagonistic tests as they have fear of catching the infection during the waiting period. When someone goes to a private lab---then one is saving time and is also having reduced risk of catching infection. Some labs have set up drive in facility for collecting sample and it may take less than 10 minutes in parking lot.

A large number of government hospitals (national, state, defence forces, railway-owned ) are doing a wonderful job as a national emergency and are providing tests, treatment on free-of-cost basis. Some of these Covid Hospitals have 500 patients facility and are 100% committed to treat Covid-19 patients. They are taking precautions for controlling infection, conducting tests and providing treatment. The government is importing various items and also providing indigenously sourced equipment, personal protective equipment/products, medicines at the national level and state level.

It is their responsibility. In fact we can say 100% attention of the government under the leadership of Prime Minister is to control, treat this disease.

In Metros,Tier 2 and Tier 3 cities, private hospitals are treating Covid patients and day-by-day the number of persons (most of them affluent or holding Health Insurance policies ) under treatment is increasing . The list of such hospitals and their locations will be long. But we can say all super speciality hospitals, large hospitals are treating such patients.

Our suggestion is that one should avoid going to a very small nursing home for such treatment as they might not be having the expertise, equipment, infection-control measures which are required for treating Covid-19. There are reports that treatment bill in a super specialty hospital in a Metro city for a really complicated case (like someone who is a senior citizen having pre-existing disease like diabetes, BP, Cardiac or with Chest-related disease history) can be as high as Rs 12 lakh. The choice of the private hospital will be dependent on where the patient is---is he in a district/town, state capital city like Lucknow or Bhopal or a metro city like Delhi or Mumbai, the age of the patient, complications, pre-existing diseases. One thing is very clear---a human being is very valuable to his family and organization therefore as a nation and as a family, we have to save every human being of this country.

SK Sethi

Guest Author Founder and Chief Executive Officer of the Insurance Foundation of India and the Founder Director of Ria Insurance Brokers Pvt Ltd .