Health ins portability to usher competition, benefit customer

Health insurance portability, whereby one can switch service providers without compromising on policy terms, will increase competition helping customers get well-priced and more quality services, feel experts.

The much awaited health insurance portability guidelines allow customers, who have long been frustrated with their insurance company, change insurer with effect from July 1.

"It is more like mobile number portability. Waiting period of customers will be removed," Sanjay Datta, the head of health at ICICI Lombard General Insurance, said.

While customers can now heave a sigh of relief, insurance companies would find competition brewing up as companies would offer better service.

"There will be increased competition in the sector and better quality of service. Overcharging and variation in rates of premium would be reduced," Bharti AXA General Insurance CEO and Managing Director Amarnath Ananthanarayanan said.

The Insurance Regulatory and Development Authority in its guidelines for health insurance portability has mandated that pre-existing diseases (PED), which are covered by the existing insurers, would also be covered by the new insurer.

"It is essential to protect the policyholders against discontinuity and consequential loss of PED cover by making the health insurance plans portable across the insurance companies," Irda said.

"Customers can now choose to shift their insurers in an hassle free way as there would be lot of choice of them and would also ensure better quality of service from the insurance companies by increasing competition," Datta said.

Irda has also asked insurance companies to provide all records and claims history of the customer to the new insurance company.

"This will bring in more transparency and will also allow insurers to assess the risk and provide underwriting at the point of sales," Max Bupa Health Insurance CFO Neeraj Basur said.

Industry players said while portability would be easier for group insurance policies, portability of individual policies could take some time.