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When Your Existing Health Insurance Protects You No More

By November 17, 2020July 8th, 2021No Comments
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The King Has No Clothes!

Why is your regular health insurance not enough?

In the fable, the King thought he had an elaborate and magnificent attire and no one had the courage to tell him he was naked. See if you feel vulnerable and unclothed after reading this piece. 

This article brings out the hidden risk of having the traditional health insurance cover hoping that your savings will be protected in times of Corona. More than ever before, the evolving situation is throwing up challenges that you never expected. Read further to learn more about the surprises

The details below will show that Covid hospitalizations are resulting in lacs of rupees unpaid in the hospital bills, despite policyholders having ample sum insured. There are reasons for this which are explained and finally what are your options to cover for that risk. 

The rate at which Covid-19 is rising, one expects that most of you reading this may come close to getting infected by the time the disease gets over. Worse of all, CDC in the US has now confirmed that the spread of the coronavirus is evidenced as airborne.

Many of us have a regular health insurance policy. At the time of making a health insurance claim, there are 4 areas where you will end up paying out of pocket –

  1. PPE kits  – Personal Protective Equipment (PPE) kits and other consumables not getting covered under a health insurance claim – Almost 75% of the bill remains unpaid in some cases!
  2. The Government (General Insurance Council) restricts payment to the hospitals – GI Council says 10,000 INR per day to be paid, hospitals charge upto 50,000 INR. You end up bearing the difference. 
  3. Your own policies terms and conditions – especially room rent restrictions if any – Double whammy
  4. Pre & post hospitalisation – the longer the better – complications are sometimes long term.

Although Coronavirus infection is covered under most of the regular health insurance policies, it may not be enough to cover the cost of Covid-19 treatment at a private hospital. People living in metros are spending, on an average, more than half of the amount of the treatment costs out of their own pockets. 

A claim may not be settled fully in the following scenarios:

1. There is a capping on the room rent / ICU in the Health Insurance Policy:

For example, you have a standard health insurance policy of Rs 10 lacs with 2% capping on Room rent and 5% on ICU, and a co-payment of 10% on the total claim amount. The hospitalisation bill comes for Rs 5 lacs – Rs 3 lacs room rent and medical expenses and Rs 2 lacs – Consumables and non medical items. The latter share will not be covered under your regular insurance. And out of the Rs 3 lacs Medical expenses, some more amount will be deducted towards the capping and co-payment. These factors would have a bearing on all associated medical costs. These cappings would result in the insured shelling out a lot of money off their pockets!

*Capping refers to the limit up to which the insurance will settle a claim.

2. Overhead Consumables – may not be covered under a regular health insurance policy

Overhead consumables such as PPE kits, gloves and other disposables. Rising cost of disposables and consumables has resulted in an exorbitant rise in the treatment costs in private hospitals.

PPE kits consist of 7 components i.e Goggles, FaceShield, Mask, Gloves, Coverall / Gowns (With or Without Aprons),  Head Cover & Shoe Cover. Each component & its rationale use has been defined by Ministry of Health & Family Welfare

Usually the portion of consumables in a surgical case is almost 10% of the total bill value. When it comes to Covid-19 related hospitalisations, they constitute a much larger portion as much as 50% of the total bill amount! This is because the hospitals (small or large) have to invest heavily in keeping the infection in control. In addition, they have invested in logistical changes like increasing the health insurance cover for the doctors & nurses, spending more on disposable one-time use items, PPE kits, Overall cleanliness and dis-infection, more number of medical machines and equipment etc. Proportionally, with a rise in the operating costs, the treatment costs have gone up. And hospitals are levying higher charges on patients due to the increased operating costs.

3. Ceiling on Covid-19 treatment rates by various State Governments and GI Council 

In order to maintain a rational costing, GI Council issued a standard zone-wise rate chart to be followed by the hospitals and all the insurance companies. Most of the prominent private hospitals are not agreeing to the guidelines and charging as per their own tariffs. This is where comes the major dispute between insurers and hospitals over the expenses payable! Ultimately, the patient suffers the loss.

There is a huge difference between how much an insurance company is willing to pay and what insureds are actually paying out of pocket! 

Read here on the guidelines issued by Oriental Insurance Company on charges that will  be paid under health insurance. 

The insurers are paying as per ‘Government Prescribed Package Rates’ or as per negotiated rates, whichever are lower. 

Some of the ceilings that have been provided are as follows.


For the purpose of a study, we took a sample of 6 different Covid -19 bills.

  Sample Size Claim Amount

(in Rs)

Amount covered by Insurer

(in Rs)

Amount not covered

(in Rs)

Total Claim 6 Claims 1754085 664952 1089133
Average per claim 292348 110825 181522

Chart Covid Cases

Case I

Here is a case of Mrs. Aparna (name changed), 29 years old was hospitalized for Covid-19 for 7 days in Columbia Asia Hospital in a metro city.

The total claim amount was Rs 1,76,533. The amount approved by the insurer was Rs 44,460 to be paid. Total deductions made under the claim was Rs 1,32,073, which is 75% of the claimed amount!

Copy of the bill – 

Case1 Image1

Case1 Image2

Screenshot of GI Council guidelines:

Screenshot 2020 11 18 171549

Screenshot of the inclusions and exclusions under per day Hospital rates as per GI Counsil guidelines:

Case3 Image 4

Bill Assessment

Claim Settlement Note:

Case1 Image 5 Swati Garg Claim Note

Header Actual Bill Amount (in Rs) Amount Deducted** (in Rs) Amount Paid (in Rs)
Room & Investigations 120049 83589 36460
Admin 5440 5440 0
Pharmacy 40704 40704 0
Professional fee 10340 0 10340
Co-Pay 2340
Total 176533   132073 46800
Less 5% Co-pay 44460

**The deductions are as per GI Council Covid Rates Guidelines / An assessment by the TPA

Case1 Image 6

As per GI Council guidelines,

Rs 7800 Package per day (This includes room rent, consultation, Nursing Charges, Covid Test, Investigation, drugs, PPE kit and other protective gears, bedside procedures) – For a Non NABH Hospital in a metro city.

Rs 7800 X 6 days = Rs 46800

Amount settled – Rs 46800

5% Co-payment (for self) – Less Rs 2340

Final Amount paid = Rs 46800 – Rs 2340 = Rs 44,460 (25% of the total claimed amount!)

What if Mrs. Aparna had a Corona Kavach Policy along with her Standard Health Insurance Policy?

Let us assume that Mrs Aparna had Corona Kavach Policy from Oriental Insurance Company Limited. 

The premium for Rs 3 Lacs Sum Insured, 9.5 months tenure for a 29 year old person is Rs 1100 (with GST). This policy would have covered all the charges under the heads – Room & investigations, Pharmacy, Professional fees and most of the charges under Admin (PPE Kit & other protective gear, Oximeter, disposables etc). And absolutely no co-payment is applicable!

Deductions (Admin charges)

Hospital Registration – Rs 250 

Medical Records – Rs 500

Food and Beverages – Rs 175

Linen & Laundry Charges – Rs 600

Total = Rs 1525

Total Amount Payable by Insurer = Rs 176533 – Rs 1525 

= Rs 175008 (99% of the claimed bill amount!)

Regular Health Insurance v/s Carona Kavach Policy  – 25 % v/s 99 %

Case II

This is a Covid claim raised in Palghar, Maharashtra. Mr. Sudesh, 73 years,  was admitted for 15 days in a tertiary-care Non-NABH accredited hospital because of Covid – 19 Pneumonia. He was pre-diabetic. The total bill amount came out to be Rs 193214 and the amount settled by the insurer was Rs 85398. The amount borne by the policyholder was Rs 107816 which is 56% of the total bill amount.

Summary of total hospital bill:

This is a handwritten summary of all the bills, in absence of a single consolidated bill from the hospital.

Screenshot of GI Counsil guidelines

Case3 Image 3

Case3 Imgae5Bill Assessment

Claim settlement note: 

Sandeep Bhojani Claim Note

As per GI Council guidelines,

Rs 6000 Package per day (This includes room rent, consultation, Nursing Charges, Covid Test, Investigation, drugs, PPE kit and other protective gears, bedside procedures) – For a Non-NABH Hospital in ‘Rest of India’

Rs 6000 X 15 days = Rs 90000 + A + B + C = Rs 94887.00

(A+B+C – Pre / Post hospitalisation and Covid Test)

10% Co-payment (for parent)     – Less Rs 9489

Final Amount paid = Rs 94887 – Rs 9489 = Rs 85398 (44% of the total claimed amount!)

What if Mr. Sudesh had a Corona Kavach / Rakshak Policy along with his Standard Health Insurance Policy?

Mr Sudesh is 73 years old. A Corona Kavach / Rakshak policy can not be offered to anyone beyond the age of 65 years.

Case III

Mr. Subhash, 33 years old was admitted for 10 days in a super-specialty hospital in Hyderabad for health complications due to Coronavirus Infection. He incurred a bill of Rs 813571 at the time of discharge. He is covered under a group health insurance policy (Group Medical Policy) offer by his employer for Sum Insured of Rs 500000.

Copy of the bill – 

Case3 Image1 1

Case3 Image 2


Complete Bill Break-Up

Bill Head Days Amount (in Rs) Amount Break-Up / Detail Department
Economy Ward – 9th Oct 11th Oct 3 12000 Rs 4000*3 days Ward Charges
ICU Ward – 12th oct to 16th Oct 5 37500 Rs 7500*5 days
Sharing Covid Ward – 17th Oct to 19th oct – 2 8000 Rs 4000*2 days
Room Sanitisation Charges 10 46000 (Rs 3000*6 days) + (Rs 7000*4 days)
PPE Kit 10 69000 (Rs 4000 * 3 days)+ (Rs 9000 * 5 days) + (Rs 6000 * 2 days)
Additional Security 10 37000 (Rs 2000 * 3 days) + (Rs 5000 * 5 days) + (Rs 3000 * 2 days)
BIO Waste Disposal 10 32000 (Rs 2000 * 3 days) + (Rs 4000 * 5 days) + (Rs 3000 * 2 days)
HCW Welfare Charges 10 41000 (Rs 1000 * 3 days) + (Rs 6000 * 5 days) + (Rs 4000 * 2 days)
Laundry 10 26500 (Rs 1000 * 3 days) + (Rs 3500 * 5 days) + (Rs 3000 * 2 days)
Single Use Disposable items 10 37000 (Rs 2000 * 3 days + (Rs 5000 * 5 days) + (Rs 3000 * 2 days)
Special Amenities as per patient request 10 24000 (Rs 3000 * 7 days) + (Rs 1000 * 3 days)
Oxytherapy   50000 Rs 5000 * 10 days Services
Plasma Therapy 1 40000  
C PAP 4 40000 Rs 10000 * 4 days
Blood Transfusion 2 4000 Rs 2000 * 2 days
Admission Charges 1 2000  
Cardiac Monitor 8 8000 Rs 1000 * 8 days
Catheterisation 1 2000  
Emergency consultation 1 1000  
ER Bed Charges 1 1000  
ER Nursing Charges 1 1000  
Medical Records 1 2000  
Investigation Cardiology 1 2130 ECG and ECHO Investigation
Investigation Microbiology 1 7667 D Dimer Test*2, Hbsag, Hcv HIV, Troponine,
Investigation Pathology 1 51763 Blood Test
Radiology 1 4500 CT Scan
Issued to Patient 1 1954 Some items issued to patient like Water Bottle *3 + 2 medicine Others
Dr. Visit Charges 2 1000 2 times
Hospital Total Final Bill 590014  
Other Bill (Outside Hospital)
Meditech Sleep Solution Medicine Shop 19th oct to 18th Nov 8500 Oxygen Glucometer Outside Medical bills
M/S TX Pharmacy  Bill No-208638 44123 377 Medicine  Post Discharge
M/S TX Pharmacy  Bill No-208478 44120 15004 During admission
M/S TX Pharmacy  Bill No-208219 44114 21478 During admission
M/S TX Pharmacy  Bill No-208194 44113 18568 During admission
M/S TX Pharmacy  Bill No-208271 44115 23162 During admission
M/S TX Pharmacy  Bill No-208319 44116 6409 During admission
M/S TX Pharmacy  Bill No-208315 44116 919 During admission
M/S TX Pharmacy  Bill No-208226 44114 3139 During admission
M/S TX Pharmacy  Bill No-208310 44116 19394 During admission
M/S TX Pharmacy  Bill No-208285 44115 713 During admission
M/S TX Pharmacy  Bill No-208571 44121 3998 During admission
M/S TX Pharmacy  Bill No-208187 44113 7058 During admission
M/S TX Pharmacy  Bill No-208537 44121 4379 During admission
M/S TX Pharmacy  Bill No-208559 44121 571 During admission
M/S TX Pharmacy  Bill No-208487 44119 877 During admission
M/S TX Pharmacy  Bill No-208593 44122 18498 During admission
M/S TX Pharmacy  Bill No-208536 44121 11003 During admission
M/S TX Pharmacy  Bill No-208368 44117 20505 During admission
M/S TX Pharmacy  Bill No-208444 44122 16051 During admission
M/S TX Pharmacy  Bill No-208586 44123 2204 During admission
Srikara Hospital blood bank 44118 15000 During admission
Yashoda Hospital ORE158240/20 44110 8750 CT Scan (Pre Hospitalisation)
Covid Plasma Therapy Not Found   15000  
Total             Rs 831571


The Total Hospital bill – Rs 590014

Total pharmacy bills + Other bills (Outside the Hospital) – Rs 226557

The final claim amount is worked out to be Rs 813571

Screenshot of GI Council guidelines:

Case3 Image 3

Case3 Image 4

Case3 Imgae5

Bill Assessment

As per GI Council guidelines (Rest of India),

Rs 7200 Package per day for Ward and Rs 11700 per day for ICU 

So, the total amount covered under insurance is Rs 242506 (Room & ICU packages, High-end Drugs & Investigations, CT Scan etc)

Less 5% of Co-pay:  Rs 242506 – Rs 12125 = Rs 230381, which is just 28% of a total bill! And the rest is paid by the policyholder.

What if Mr. Subhash had a Corona Kavach Policy along with his Standard Health Insurance Policy?

Let us assume that Mr Subhash had Corona Kavach Policy from Oriental Insurance Company Limited. 

The premium for Rs 5 Lacs Sum Insured, 9.5 months tenure for a 33 year old person is Rs 1517 (with GST). This policy would cover all the charges under the heads – Room & investigations, Pharmacy, Professional fees, pre-hospitalisation & post hospitalisation bill expenses and most of the charges under Admin (PPE Kit & other protective gear, Oximeter, disposables etc) upto a maximum limit of Rs 500000.

Total Covered amount = Rs 500000     ——–> A


Total Bill amount = Rs 831571

Total deducted amount = Rs 331571 (this includes all the non-medical expenses that can not be covered under the policy, like Admission, Medical Records, Food and Beverages etc along with a few other expenses) – 27% of the total claimed amount.

Regular Health Insurance v/s Carona Kavach Policy  – 28 % v/s 60 % 

Furthermore, the total deducted amount of Rs 331571 under the Corona Kavach Policy can be claimed through the regular health insurance policy (Group Mediclaim Policy). Except the expenses for non medical items and a 5% co-payment on the amount payable, rest all charges would get covered by the insurance policy (as per the terms and conditions of the existing health insurance policy).

Total non-medical items – Rs 110454 (Like Additional Security, Admission, Medical Records, HCW Welfare Charges, Laundry, Water bottle etc).

Less 5% Co-Payment (under existing policy) = Rs 11055

Payable Amount – Rs 210061                 ———> B

Final Amount Paid = A + B = Rs 500000 + Rs 210061 = Rs 710061 

This entire exercise shows that the total covered amount under both the insurance policies (Regular Health Insurance Policy and a Standard Corona Kavach Policy) rises up to 85% of the total claimed amount!

As per the guidelines issued by the General Insurance Council (GIC), the following is the reference rate chart for Covid – 19 treatment with respect to rates published by various state governments.

No State / City Normal Ward ICU (without Ventilator) ICU (with Ventilator)
1 Delhi 10000 8000 15000 13000 18000 15000
2 Uttar Pradesh 10000 8000 15000 13000 18000 15000
3 Gujarat 9000 18050 21850
4 Telangana# 4000 7500 9000
5 Rajasthan 5500 5000 8250 7500 9900 9000
6 Maharashtra# 4000 7500 9000
7 Vadodara## 6000 12000 8500 21500 18000
8 Jharkhand 8000 7500 10000 9000 12000 11500
9 Punjab 10000 15000 18000
10 Haryana 10000 8000 15000 13000 18000 15000
11 Ahmedabad 10000 / 14000 19000 23000
12 Karnataka### 10000 / 12000 15000 25000

Source: Guidelines issued  by various State Governments toward standard charges (packages) for Coronavirus treatment. The above rates are on a per-diem basis. The per day package rates include doctor’s consultation, nursing charges, room stay, meals, Covid testing, investigation expenses, PPE and other necessary consumable items, biochemical waste management, bedside procedures etc. It doesn’t include some high-end drugs and investigations, and some interventional procedures (like bronchoscopic procedures, biopsies etc). 

# Does not include PPE Kits, Covid tests, High end investigations including Imaging viz CT, MRI – all to be billed as per MRP or Hospital rack rates. Covid – 19 test to be billed as per the agreed rates.

## Doesn’t include Dialysis – RS 1500 per dialysis, cost of inj. Tocilizumad, high end antibiotics for secondary infection

### Rates as per Covid – 19 Patients privately admitted by Hospitals (Cash payment – non-insurance)

Role of Covid-specific Health Insurance Policy

This is exactly where the IRDAI mandated Covid-specific health insurance products provide the much-needed support! The following are some points worth considering as to why we need to have a Coronavirus Insurance Policy in addition to the regular health policy:

  1. Corona Kavach Policy covers the cost of essential consumables: It aptly, addresses the high cost of consumables that forms a significant part of a hospital bill
  2. The out of pocket payment due to the capping on the room rent / ICU in a regular policy is taken care of in this policy. A Corona Kavach policy doesn’t impose a cap on the room charges or any other treatment cost.
  3. This policy covers a ‘home care treatment’ or a ‘home-quarantine’ with a continuous active line of treatment for a specified number of days. 
  4. It provides Coverage for Road ambulance, Ayush benefit upto the SI, Pre and Post hospitalisation.
  5. There is an option to go for an add on – Hospital Daily Cash with a very little extra price. This will ensure a payment of 0.5 % of the Sum Insured for every 24 hours of hospitalisation for a maximum of 15 days, by the insurer to the insured (benefit based). This could take care of the loss of pay due to hospitalisation.
  6. A Corona Rakshak Policy (Benefit Based) pays a lump sum amount on occurrence of the infection with specific conditions. A 100% of the Sum Insured is paid to the insured when he tests positive for covid – 19 and requires hospitalisation for a minimum of 72 hours. 

Overview of some Covid – 19 Specific Policies:

Corona Kavach 

It is an indemnity-based health insurance cover which is offered as an individual as well as a family floater policy. Recently this product has been offered as a group cover by many insurance companies.

  • Range of Sum Insured: ₹ 50000 to ₹ 500000 (In multiples of ₹ 50000)
  • Corona Kavach policy can be taken for self, spouse, dependent children, parents and parent-in-laws. 
  • The cover eligibility extends from day 1 of birth till 65 years of age. 
  • This policy covers hospitalisation costs that include room / ICU rent, Doctors’ fee, anaesthesia, blood, oxygen charges, medicines, diagnostic costs etc. A minimum period of 24 consecutive hours of hospitalisation is required.
  • A Corona Kavach policy typically covers a pre-hospitalisation of 15 days prior to the hospitalisation or home care treatment and a post hospitalisation of 30 days after the discharge or completion of the home care treatment.   
  • Ayush treatment covered.
  • Ambulance cover offered with a maximum limit of 2000 / hospitalisation

Some highlights of Corona Kavach Health Insurance Policy are:

  • No room rent sub-limit
  • No co-payment
  • No zone-based pricing
  • No pre-policy check-up required
  • These will cover pre-existing illnesses (comorbidities) along with the treatment of Coronavirus (after an underwriting assessment is done). Other health insurance policies usually cover some Pre-Existing Diseases after a WP of 2 to 4 years
  • 15 days waiting period
  • Children covered from day 1 of their birth
  • Home Care Expenses covered – Up to 14 days per incident. It is covered only in case there is a positive diagnosis of Covid from a Government authorised diagnostic centre. Most importantly, home care is advised by a Medical Practitioner along  with an active line of treatment with monitoring of the health status every day. For the claim, a daily monitoring chart including records of treatment by the treating doctor is required.
  • Coverage for essential consumable – PPE Kit, Gloves, Masks etc (these may not otherwise be covered under any other standard health insurance)

Hospital Daily Cash: Corona Kavach Policy gives an option of an add on cover of Hospital Daily Cash (this optional cover is benefit based). As per the guidelines the insured person will get 0.5% of the sum insured per day for up to a maximum of 15 days during hospitalisation.

Many insurers offer a range of discounts under Corona Kavach Policy:

  • Discount for health care workers
  • Family discount – Non floater
  • Family Floater discount
  • Female insured discount
  • Loyalty discount
  • Employee discount

Who should buy a Corona Kavach Policy?

  • People who do not have a Health Insurance Policy for their family and themselves
  • People who have a Health Insurance Policy of a lower Sum Insured or with a Room Rent sub-limit (Sub-limits result in a proportionate deduction whereas Corona Kavach Policy doesn’t have a limit on room rent). Corona Kavach Policy can be bought as a supplementary cover.

Premium Comparison – Corona Kavach Policy

Premium Compare Corona Kavach

Corona Rakshak

It is a benefit based Health Insurance Policy where Lump sum benefit equal to 100% of the Sum Insured would be payable on positive diagnosis of Covid-19. This is offered as an Individual policy only.

  • Range of Sum Insured: 50000 to 250000 (In multiples of 50000)
  • Corona Rakshak policy can be taken for self, spouse, dependent children, parents and parent-in-laws.
  • The minimum requirement is a hospitalisation for a continuous period of 72 hours.
  • The positive diagnosis of Covid-19 should be from a government authorized diagnostic centre.
  • The cover eligibility starts from 18 years to 65 years of age.
  • There is a 15 days waiting period from the start of the policy, to avail the benefits.
  • The policy will terminate when 100% of the Sum Insured is paid.

Who should buy a Corona Rakshak Policy?

People who already have a Health Insurance Policy. But a hospitalisation may impact the financial position of the person. In such a case, Corona Rakshak Policy acts as a replacement of his/her income.

Premium Comparison

Sum Insured Insurer / Age Band (in Years) The Oriental Insurance Company Limited Cholamandalam MS General Insurance Company Limited Star Health & Allied Insurance Company Limited
Rs 200000 18-40 1748 1728 4154
41-60 2331 1728 4154
61-65 3497 1728 4154
Rs 250000 18-40 2186 2160 5192
41-60 2914 2160 5192
61-65 4371 2160 5192

What is not covered in both Corona Kavach and Corona Rakshak Policies:

  • Non – authorised diagnostic centres: A claim can be rejected if the Covid test is carried out in a non-authorised diagnostic centre. The test has to be carried out from a Government authorised diagnostic centre.
  • Home quarantine cases without an active line of treatment for Corona Kavach Policy. Home quarantine is not covered under the Corona Rakshak Plan.
  • Claim within waiting period: There is a stipulated 15 days waiting period within which no claim is entertained.

Frequently Asked Questions

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