Daybreak - What do health insurers have against pregnancies?

Episode Date: June 12, 2024

When 29-year-old Deepa delivered a healthy baby boy six months ago, she thought her health insurance would cover her hospital expenses. But unfortunately, it barely covered 1/3rd of the Rs 1 lakh bill. So she ended up using her corporate health insurance that offered a higher limit. And this isn’t a one off. The Ken spoke to 13 women from six different cities who delivered babies in the last couple of years. Most of them had experiences just like Deepa. Seven of them said they got their maternity expenses covered by corporate health insurance, either their own or their spouses. And that’s despite having their own personal health cover in place. Luckily for Deepa and the seven women we spoke to, they had some form of corporate health insurance in place. But in a country like ours, that’s a luxury. Only about 200 million out of the 1.4 billion citizens of this country have access to it. That’s pretty abysmal. In this episode, we delve into what health insurers have against pregnancies. Tune In. 

Hi, this is Rohan Dharma Kumar. If you've heard any of the Ken's podcasts, you've probably heard me, my interruptions, my analogies, and my contrarian takes on most topics. And you might rightly be wondering why am I interrupting this episode too. It's for a special announcement. For the last few months, I and Sita Raman Ganesh, my colleague and the Ken's deputy editor, have been working on an ambitious new podcast. It's called Intermission.

We want to tell the secret sauce stories of India's greatest companies. Stories of how they were born, how they fought to survive, how they build their organizations and culture, how they manage to innovate and thrive over decades, and most importantly, how they're poised today. To do that, Sita and I have been reading books, poring over reports, going through financial statements, digging up archives, and talking to dozens of people. And if that wasn't enough, we also decided to throw in video into the mix. Yes, you heard that right. Intermission has also had to find its footing in the world of multi-camera shoots in professional studios, laborious editing, and extensive post-production.

Sita and I are still reeling from the intensity of our first studio recording. Intermission launches on March 23rd. To get alert, as soon as we release our first studio recording, episode, please follow intermission on Spotify and Apple Podcast or subscribe to the Ken's YouTube channel. You can find all of the links at the ken.com slash I am. With that, back to your episode. Deepa, a 29-year-old professional from Bangalore, is one of those people who just has it all figured out. Some would describe her as a meticulous splatter. So whether it's her office work or her household chores, she usually just has it all.

covered. Basically, she could potentially give masterclasses on adulting and we would all benefit from them. She's just that sort of person. So being the responsible adult that she is, Dipa decided to buy a health insurance cover for 10 lakh rupees about four years ago from a health insurance firm called Star Health. She wanted to be able to take care of any major life event or health care planned or unplanned. But despite preparing for every possible eventuality, things didn't end up working out as she had hoped. About six months ago, DIPA delivered a healthy baby boy. But when the hospital drew up a hefty bill of a little under one lakh rupees,

she realized that her health insurance would only cover about one third of that bill. So she ended up using her corporate health insurance that offered a higher limit. And this isn't a one-off. The Kent spoke to 13 women from six different cities who delivered babies in the last couple of years. Most of them had experiences just like DIPA. Seven of them said they got their maternity expenses covered by corporate health insurance,

either their own or their spouses. And that's despite having their own personal health cover in place. Now, luckily for Dipa and the seven women we spoke to, they had some form of corporate. health insurance in place. But in a country like ours, that's a luxury. Only about 200 million out of the 1.4 billion citizens of this country have access to it. And that's pretty abysmal.

In this episode, we delve into what health insurers have against pregnancies. Welcome to Daybreak, a business podcast from the Ken. I'm your host Rahel Philippos. And every day of the week, I join Snigda Sharma to bring you one story that's It's worth understanding and worth your time. Today is Wednesday, the 12th of June. The answer to the question I asked a little while ago, what do health insurers have against pregnancies,

is somewhat obvious. A person is far more likely to have a child than to say get in an accident or get diagnosed with a terminal illness. And remember, the way the health insurance companies make money is by minimizing payouts, which means they will try their best to avoid situations where they have to foot the majority of your hospital. bill. So people like Deepa land up in situations where they get straightforward, stand-alone health

insurance policies, but end up realizing too late that it's not going to cover all their pregnancy-related expenses. Having said that, more and more people are now opting for maternity cover along with their health insurance policy. But of course this comes at a cost. You end up paying a higher premium. But it also increases the scope of what your health insurance policy covers if you decide to have a child. And this sort of insurance is really popular these days. In fact, insurers like ICICI-Lombard and Policy Bazaar have seen a huge rise in the number of health insurance policies they have sold along with maternity cover. In fact, the Ken reporter Narayanan V compared a bunch of regular health insurance policies with policies that have an additional maternity rider or add-on.

He wanted to figure out how they were priced, what you're getting, and what he found was pretty interesting. So, for instance, with pro-health, a regular health policy by Manipal Signar with an annual premium of a little over $20,000, you get maternity benefits of up to $15,000 for a normal delivery and $25,000 for a C-section. Now, you should keep in mind, that a C-section delivery at the average hospital in a big city like Delhi, for instance, could cost up to 3 lakh rupees. So the maternity benefits won't cover even half of the total cost. Things do start looking better when you add a maternity cover.

If you were to opt for, say, Manipal Signas, prime advantage policy along with a rider of a little over $4,000 annually, your maternity cover does get better. It would go up to rupees 1 lakh. And that doesn't sound too bad, right? Just about $4,000 a year for a significantly higher maternity cover. Now, unfortunately, this isn't always the case. Higher maternity covers don't always come at a moderate rise in premiums.

Sometimes it means paying as much as double of your premium manually. And that's exactly why people like DIPA end up relying on corporate health insurance policies. For one, there's no waiting period on pre-existing conditions, and the coverage limit is higher than what a retail policy offers. But again, not everyone has the benefit of a corporate health insurance in the first place. And that brings us to another factor that insurers often use to their advantage. Time. And by that, I mean waiting time. More on that in the next segment. Hashth has reached a platoon in his career. He had joined an early stage. state startup with a lot of enthusiasm because he believed in the company's mission.

But very soon things started to take a turn for the worse. When the going got tough, the culture of feedback disappeared. The leadership was so busy putting on fires that they completely deprioritized feedback. And his role kept changing to keep up with the changing business needs. Without feedback, he felt directionless and lost. His frustration only grew with time. Was he making progress? adding value. He couldn't really tell. And all his messages requesting feedback were left on

scene. Then he did what he thought he never would. Quit his job in less than a year of joining. On most days, he knows that he made the right decision for himself, but sometimes he wondered if he had to take a share in the blame as well. Did he not know how to get people's time and ask for feedback? Was there anything else he could have done to get people interested in his work enough to give him meaningful feedback? Should he have been more relentless in asking? Ask just one more time? This is not just harshet's story. Many early career professionals face this predicament while starting out. So, on the latest episode of the first two years, an early careers podcast from the Ken, I get to the bottom of how to ask for feedback in a way that people want to give it.

Click on the link in the show notes or simply search the first two years wherever you get your podcasts. I'm Aksha Chandrashakran from the Ken. Now, back to Rahal. Most of the buyers of these policies are within the 25 to 35 age group. Since for this demographic, pregnancy is generally one of the major medical expenses that they like to plan for. So it all adds up. And this is a market that the insurance industry is going out of their way to tap. The aim is to make.

make more people opt for maternity cover. And they're doing this in a bunch of different ways. One way is obviously increasing coverage limits, so your policy takes care of more of your expenses. And the other way is by reducing waiting periods. This is the time you wait after purchasing the policy before you can actually claim benefits. Now, a typical waiting time for a policy with a maternity cover

goes upwards of nine months. Some maternity policies offered by Tata AIG General Insurance or ICICI-Lombard or Manipal Sikina come with a waiting period of a couple years. So with maternity covers, timing is everything. Best case scenario, you apply for your insurance well before you or your partner actually gets pregnant. And on the off chance that you apply after you get pregnant, I have bad news for you. You're no longer eligible for maternity cover. Siddharth Singhhal, health insurance business head at Policy Bazaar, explained that this is because pregnancy is typically considered a pre-existing condition which falls outside the scope of the policy. And unfortunately, this happens very often.

In fact, Singhal told the Ken reporter Narayanan B, that nearly four out of ten people seeking maternity cover on policy bazaar are already pregnant. So they don't end up getting maternity coverage. Now, one way policyholders can reduce the waiting period is by adding a maternity rider to their existing policies with some additional premium payouts. For example, a Niva Bupa policyholder upgrading to its health premium plan can halve the waiting period of four years. But of course, that can work out to be significantly more expensive. And all said and done, maternity policies are only beneficial as long as the couples seeking parenthood are fertile. And here's the thing. Ironically enough, the world's most populous nation

is dealing with rising levels of infertility. But guess what? There's insurance for that too. Nearly 30 million couples are grappling with infertility issues today. But unfortunately, in vitro fertilization or IVF treatments are out of reach for a majority of these couples. They cost anywhere between 1 and 8 lakh rupees. So the insurance industry recognized an opportunity here.

Many of them have expanded the scope of maternity insurance to include assisted reproductive treatments, surrogacy and even adoption. But like with any insurance policy, terms and conditions apply. To avail of your policy, the infertility treatment must be successful. So if you don't get pregnant from IVF, you can't make a claim. And this, despite the fact that only about third, 30 to 40% IVF treatments actually result in pregnancy. And then of course there's the waiting period.

Industry insiders that Narayanan spoke to pointed out that the older you get, the less likely the treatment is to work. And when you are buying a policy that mandates a three-year waiting period, it kind of ends up being a futile exercise. That's why Nandita Palchshedkar, an IVF specialist, recommends a waiting period of a maximum of one year. But things do seem to be changing for the better. A lot of insurers are actively reducing waiting periods and increasing maternity cover.

The fact that they have also started covering treatments like IVF is also a good sign. Basically, the maternity space is fast evolving. And insurers are striving to keep pace with it. If that happens, soon people like DIPA won't need to depend on their corporate health insurance when planning a family. Daybreak is produced from the newsroom of the Ken India's first subscriber-focused business news platform. What you're listening to is just a small sample of our subscriber-only offerings.

A full subscription unlocks daily long-form feature stories, newsletters and podcast extras. Head to the ken.com and click on the red subscribe button on the top of the website. Today's episode was hosted by Rahil Filippo's, produced by me, Snigda Sharma, and edited by Rajiv Sien.