How Insurers are making mockery of Health Insurance Portability?

When it comes to health insurance portability, porting is not your right. Insurer commands a lot of discretion. I have already mentioned in my earlier posts that health insurance portability is only for young and healthy.

In this post, I will highlight a case of extreme irrationality shown by my insurer when I applied for porting of my insurance plan. In my case, I wanted to port to a different plan from the same insurer.

Since I have been at the receiving end in this case, it is advised that you consider this aspect when you read this post. My views may not be objective.

My wife, daughter and I are covered in a Max Bupa Heart Beat Gold plan. Since the plan is a maternity plan, it is quite expensive.  I asked Max Bupa to port my family floater plan to a non-maternity plan from Max Bupa. The difference in premium was significant.

My porting application was rejected.

Acceptable. Porting is not my right. It is subject to approval from insurer’s underwriting team. The insurer is expected to do fresh underwriting exercise and convey its decision to the policy holder.

Must Read: All you need to know about Health Insurance Portability

Why was the porting request rejected?

1. There was no counter proposal from Max Bupa for loading premium because of any illness. The application was rejected outright.
2. There was no medical test conducted.

Hence, I believed the policy was rejected due to any existing medical conditions already known to Max Bupa.

I asked Max Bupa to provide me the reason for rejection of my porting request.

I was told that the rejection is due to internal underwriting guidelines.

So, my family is good to continue in a maternity plan from Max Bupa without any loading but not good enough for a non-maternity plan.

IRDA Guidelines

As per Clause 8(c) of Health Insurance Reguations, 2016, an insurer has to provide reasons for rejecting any application. I am copying the exact clause below.

Any proposal for health insurance may be accepted as proposed or on modified terms or denied wholly based on the Board approved underwriting policy. A denial of a proposal shall be communicated to the prospect in writing, by recording the reasons for denial. Provided, the denial of the coverage shall be the last resort that an insurer may consider.

When I countered Max Bupa with this clause, Max Bupa again replied that the porting application has been declined basis its underwriting guidelines. And that this was their reason.

Why else will anyone reject a policy application? Of course, due to underwriting guidelines.

In my opinion, Max Bupa has made a very convenient interpretation of IRDA guidelines. If such is the interpretation of the guidelines, then Max Bupa never has to give any reason for any policy rejection.

Other options

Seeing Max Bupa’s reluctance to specify the exact reason, I gave Max Bupa three options and asked if any two members could be ported to the non-maternity plan.

1. I will stay in Heart Beat Gold plan. Let my wife and daughter port to non-maternity plan.
2. My wife will stay in Heart Beat Gold plan. Let my daughter and me port to non-maternity plan.
3. My daughter will stay in Heart Beat Gold plan. Let my wife and I port to non-maternity plan.

All the three combinations were declined swiftly, again due to internal underwriting policies.

I asked them if any one of us could port to the non-maternity plan. The answer was No again.

The reason did not change either.

You can see nothing is allowed.

Hence, I have to stay in a very expensive maternity plan if I have to continue with Max Bupa.

What is my worry?

I am not much worried about not being able to shift to a non-maternity plan. At least, my family has health insurance cover although it is quite expensive.

However, in this case, I smell something fishy. It looks like a deliberate attempt to keep my family in a more expensive maternity plan. In my opinion, Max Bupa is simply preventing me from shifting to a less expensive plan by being this non-transparent.

And I was right (Updated on October 28, 2014)

After I raised the issue with CEO, Max Bupa, he assigned Head, Agency Business to look into the matter.

I got a call from the Head, Business and a manager in Grievance Redressal team on October 25, 2016 (12:15 pm).

I was told that it is internal policy of Max Bupa that it does not port any policy with pre-existing conditions or where any claim has been paid before.

By the way, I had made a claim under maternity benefit in the previous year.

Another aspect they shared with me was that they can accept a new customer with the same pre-existing conditions but cannot port the policy if case the policyholder has those pre-existing illnesses.

Sounds farcical, doesn’t it?

Essentially, it is a way of keeping customers in the more expensive plan.

Of course, Max Bupa declined to give this in writing because it would have opened up Pandora ’s Box for them.

What does this mean?

The only benefit of health insurance porting is that you get credit for the waiting period for pre-existing illnesses served under the old plan. There is no other benefit.

Insurers can choose to load the premium, if they wish to.

If the insurance companies decline to port the policy if there is any pre-existing illnesses or in the event of any prior claim, then IRDA health insurance porting guidelines are completely useless.

By the way, Max Bupa could have chosen to load the premium in the new plan if it found anything adverse. But, having a blanket policy for pre-existing conditions and prior claims is unfair to customers.

What I could not figure out was if Max Bupa had this policy only for existing customers. Quite possible Max Bupa still accepts porting requests from other insurers with open arms (despite pre-existing conditions and prior claims).

If that is the case, it is particularly shameful on part of Max Bupa and an example of how insurers fleece its own customers.

As I feared, it is actually a deliberate attempt to keep customers in a more expensive plan.

I do not know if other insurers have a porting policy similar to Max Bupa. If that’s the case, IRDA needs to look into the matter.

Is Max Bupa worse than other insurers?

I don’t think so. Though I do not have much experience of interaction with other health insurers, I do not expect other insurers to be any different. I have heard and read many stories of irrational and unreasonable behavior by other insurance companies.

Fortunately, for me, Max Bupa has displayed arbitrary behavior by rejecting porting application. The situation would have been much worse if Max Bupa has displayed such behavior at the time claim settlement.

What this post is not about?

The idea behind this post is not to rant about perceived irrational and opaque behavior by Max Bupa. The intent is also not to show Max Bupa in poor light. The intent is also not to discourage readers from dealing with Max Bupa.

To be honest, my claim experience with Max Bupa has been quite reasonable.

What is the learning in this case?

The intent is to make you aware that you cannot rely on health insurance porting mechanism.

After my interaction with Max Bupa, it seems IRDA health insurance porting regulations might be useless.  You cannot take health insurance porting for granted.

I have mentioned many times before that Health Insurance porting is only for young and healthy.

After this experience, I believe porting is not merely subject to underwriting policies of the insurer but also to whims and fancies of the insurer. In this case, Max Bupa has made complete mockery of IRDA porting guidelines.

Therefore, purchase the right health insurance plan. Purchase it early.

Do not purchase a maternity plan to begin with. Hence, plans such as Max Bupa Heart Beat Gold can be easily avoided. This is because you may not be able to port to a non-maternity plan with the same insurer when you want to. Your insurer may just not let you.

Secondly, in case you plan to port to another plan, do not wait.

What will I do now?

I will continue this year with Max Bupa and take the matter up with IRDA. It is quite possible insurers use this tactic only to keep existing customers in an expensive plan.

Next year, I will consider porting the plan to a different insurer.

Will keep you posted.

If you have experienced something similar, do share your experiences in the comments section.