Consumer Law: Cashless Hospitalization Scrapped, What Follows Next?

The announcement of scrapping cashless hospitalization facility, made by leading insurance companies has caused a public uproar. The reason cited by the four leading insurers namely National Insurance, New India Assurance, United India and Oriental Insurance Company is that they are facing heavy losses in the health insurance sector. The insurers alleged that the hospitals charge higher rates for the insured patients. However, this change in policy has been slammed by the hospitals, authorized bodies and consumers.

Ketan Mehta, an avid reader of LIG, states, “Conspiracy between hospitals and TPA are responsible for it. Because of this, now every one will face hassle during hospitalization and during claims. I feel that TPA should be a government regulated agency and not an independent agency.”

Consumer Law: Now You Have to Pay Higher Premium Rate

Following the public outrage and consumer law activists protesting against it, the insurance companies are trying to develop a new health insurance product. It will be based on differential ratings that will bare the expenses of the high-end hospitals. The consumers will probably be charged 50 percent extra premium to avail services of these high-end hospitals.

This means that if a person was paying a premium of Rs.1, 400, now, he will have to pay Rs.2, 000, to get treatment in the high-end hospitals. However, the premium rates will be calculated based on the total number of people treated and the total claims paid.

Rashmi PN, another reader, points out that scrapping cashless hospitalization would only add up to the hassles faced by consumers, especially senior citizens, with meager savings.

However, G. Srinivasan, the Chairman and Managing Director of United India Insurance, told the Press that for long, the hospitals have been charging excess rates, which results in consumers exhausting their policy limits early. Also, he said that the new product had been already under consideration and the recent public outrage has only expedited the process.

Harish Agrawal, who wrote the highly popular article titled, Time to Change, states,

“People who want to misuse it will misuse the cashless as well as the new one. Insurance companies will now make patients and their family members suffer for claims.”