Medical Insurance - The Cover With A Hole

The rejection of their health insurance claims has landed many Covid patients and their families in dire financial straits

- Shubham Shankdhar

Covid has been worse than just a health nightmare—it has also crippled many families in India financially. A handful of facts highlights this starkly. India has seen just under 30 million Covid cases and 377,000 deaths (those are official statistics, as of June 15) since the onset of the pandemic in India in March 2020. Covid treatment costs an arm and a leg: as a ballpark figure, Rs 1 lakh for a week in hospital. And India’s per capita income is about Rs 1.4 lakh a year.

At about 2 per cent of GDP, India’s public health spend is among the lowest in the world. For comparison, countries like the US, UK, France, Germany and Japan spend near 9 per cent of GDP. The 2017-18 National Health accounts estimated Indians’ out-of-pocket medical expenses at nearly 60 per cent, while a 2018 Public Health Foundation study projected that medical bills pushed 55 million into poverty in 2017. And the pandemic has certainly done far worse.

People pay risk premiums on their health insurance in the hope—no, the expectation—that it will buy them protection should they end up in hospital. In reality, it’s often a chimera, with claim eligibility and payouts subject to the vagaries of ‘deductibles’, ‘sublimits’, ‘exclusions’, ‘co-pay’ percentages and such other devils in the fine print of insurance policies. That Covid is a new disease—with little in the way of ‘standard treatment protocols’—means arbitrary standards leading to dubious rejection of insurance claims.

Rajesh Yadav, a 50-year-old construction contractor in Lucknow’s Alambagh, was diagnosed with Covid last month. His condition deteriorated and Rajesh had to be hospitalised. He was insured under a