Published in Economic Times
A mediclaim-type health insurance policy generally does not cover the cost of most consumables used in the treatment of a disease or condition in a hospital. In a pre-coronavirus world, that was not a big problem. However, that is not the case now.
The number and cost of consumables used in the treatment of Covid-19 has been increasing. This along with other factors has led to a rise in overall cost of coronavirus treatment. “Normal treatment cost of Rs 50,000-1 lakh has now surged to Rs 1-2 lakh for Covid-19 treatment (due to increase in cost of consumables, patient distancing in hospitals, etc.) and to Rs 6-7 lakh or more where co-morbidities are involved or treated in expensive hospitals,” said Chandan D S Dang, Executive Director, Securenow.in, a Delhi-based insurance broker.
Consumables in health insurance parlance refer to single-use items that are frequently used in medical treatments or procedures. These are considered non-medical items and hence, are not payable under most health insurance covers.
Why the cost of treatment of Covid-19 has increased
In hospitals, the use of personal protective equipment (PPE) kits is unavoidable to contain the spread of the coronavirus. A single PPE kit includes a pair of nitrile gloves, a single-use coverall, goggles with transparent glasses, an N-95 mask, shoe covers, and a face shield. Since each of these items are separately considered consumables, there is a significant increase in the number of consumables used in the treatment of Covid-19 infection.
It is not just the cost of PPE kits but the cost of other consumables is also included in the hospital bill. These consumables are normally surgical accessories like tissue paper, crepe bandage, gown, foot covers, slippers, disposable gloves, sheets, syringes, gowns, masks etc. Toiletries and cosmetics are also considered as consumables. None of this is covered under a health insurance policy, even though they are included in the hospital bill for treating a coronavirus patient at a hospital.
Rakesh Goyal, Director, Probus Insurance, Insurtech Broking Company, said that on average, the cost of consumables accounts for 10 per cent of the treatment cost. “However, in Covid-19 treatment, the cost of consumables significantly increases as it is linked to the severity of the infection and the duration of hospitalisation. Moreover, the highly infectious nature of the novel coronavirus and mandated quarantine period of 14 days has significantly raised the cost of consumables. For instance, in Covid-19 cases, PPE kits, goggles, footwear, sanitisers and disinfectants are additionally required consumables,” he said.
As a result, the (non-payable) cost of such consumables forms a large portion of the total cost of treatment of Covid 19 infection in a hospital. Basically, these consumables are used for personal comfort or convenience and safety.
Dang said that the list of consumables increases for Covid-19 treatment and can account for around 25 per cent of the total treatment cost. “The regulator has given clear directions that the entire cost of consumables has to be included in the Covid treatment cost,” he said.
Dang explained further, “The incremental cost is about Rs 1,500 per day if the person is just in the room. The nurses, doctors and staff wear these suits throughout the day, so the costs get apportioned across patients. However, during a surgery the incremental cost is about Rs 6,000 per surgery which is based on 5 PPE suits at about Rs 1,200 per suit. These need to be discarded after each surgery. So, over a week-long hospitalisation with a surgery the incremental cost will be Rs 16,500 (at Rs 1,500 for 7 days plus Rs 6,000 for the surgery).”
Impact on hospital bills: Hospitals have increased the cost of treatment for Covid-19 patients not only because of increase in consumables used but also due to social distancing of patients. For instance, in a hospital ward where 20 people used to get treated, now only 10 are being treated due to patient distancing.
Consumables used in treating Covid-19 are costly and mostly not payable by insurers
Currently, most existing health insurance policies do not cover the cost of PPE kits and other consumables used in the treatment of Covid-19. Some insurers have considered these consumables as non-payable medical items the cost of which has to be borne as out-of-pocket expenses by the insured.
Naval Goel, CEO & Founder, PolicyX.com said, “Because of Covid-19, hospitals are charging for consumables like PPEs.Hospitals confirmed that there is a rise of around 25% in the hospital bills due additional consumables required for Covid-19 treatment. However, insurance companies do not cover PPE kit costs at the time of claim settlement. This, however, depends on case to case basis,” Goel said.
Goel further said, “Most consumables generally come under non-medical expenses and are required for one-time use, mainly because of sterility and infection concerns. That is the reason why many health insurers don’t pay for them.”
Since there is no capping on trade margin for consumables or disposables used for Covid-19 treatment, the cost of these consumables is also increasing sharply.
Dr S Prakash, Managing Director, Star Health and Allied Insurance explains why some of the consumables are not covered under mediclaim policies: “Whatever consumables are reasonably required and appropriately charged are covered under the comprehensive health insurance policy. However, the problem occurs with some of the consumables where trade margin is very high. When the trade margin is too high, naturally there will not be adequate funds to pay for it. Hence, these are not covered by the insurers,” Prakash said.
Existing policyholders can check the detailed list of consumables, which are non-payable items, in their policy document.
Abhijit Chatterjee, Executive Vice President (Claims), IFFCO Tokio General Insurance said, “For cashless claims also, the cost of consumables is non payable and has to be borne by the policyholder. However, for Covid-19 related hospitalisation currently there is no protocol issued by any authority on various consumables. Hence, we are considering them on a case to case basis.”
It has been reported that the Insurance Regulatory and Development Authority of India (IRDAI) has asked the non-life insurance companies to work out a standardised cost structure for Covid-19 treatment due to the rise of treatment costs.
What policyholders can do
Insurance companies have the flexibility to include or exclude consumables in their health covers and charge premium accordingly. The regulator has left it to the insurers’ discretion whether they want to pay for consumables like PPE kits.
Prakash said, “Most of the health insurance policies where the premium is priced low usually will reasonably cover some of these consumables. If the policy is priced well and if it is a high-end policy (comprehensive health insurance policy), it will usually cover all types of accommodation and most of the consumables that are used at the time treatment.”
Thus, if you are buying or renewing your policy in the coming days, it is important to check with your insurer whether your policy covers such consumables. Currently, only a few products in the market cover consumables used in the treatment of Covid-19.
Therefore, check the detailed list of consumables in the policy document. The list of non-payable consumables varies from insurer to insurer.