Is Your Insurance Ready For Nipah?

The Nipah virus outbreak in India is scary because it can spread from human to human, and the fatality rate is up to 80 per cent. The situation is so serious that it has triggered screenings at airports.

What Health Insurance Covers 

“Standard health insurance coverage in India includes all aspects of hospitalisation and the treatment of viral illnesses, including rare and newly emerging diseases such as the Nipah virus, as long as there is a valid, active health insurance policy and the hospitalisation was medically necessary at the time of admission,” says Arun Ramamurthy, co-founder, Staywell.Health.

There is usually no specific exclusion for the Nipah virus, but there are still certain waiting period restrictions to be aware of, including the first 30 days after the commencement of your insurance policy, with the exception of hospitalisation due to an accident. Coverage will depend on where treatment is given (if treatment is given in a network hospital), and if the claim is in accordance with the health insurance policy's terms of coverage regarding the diagnosis, hospitalization, and documentation requirements.

How Outbreaks Affect Pricing

“While isolated outbreaks of Nipah virus will have little or no effect on premium rates, repeated, high-severity events will eventually impact an insurer's assessment of how they will serve the insured, and insurers will review their underwriting assumptions, increase their surveillance of illnesses, and also consider the presence of regional risk data when creating actuarial models,” says Ramamurthy.

During outbreaks of Nipah virus, there has typically been evidence of increased utilisation of ICU beds during the outbreak and length of stay in hospital, which will result in higher overall claims costs to insurers at that time; these claims trends would not normally impact the pricing of premiums individually, but the pricing at the portfolio level. The majority of the industry will manage risks through diversification and/or reinsurance instead of passing along the costs of shock events directly to their customers.

Reducing Out-of-Pocket Burden

Government health systems play the lead role in outbreak detection, surveillance, isolation, and containment. This will also be the case in the case of the Nipah virus. Private health insurance complements this by absorbing the financial burden of treatment for insured individuals, covering hospitalization costs, advanced critical care, and post-treatment recovery where required.

“By reducing out-of-pocket expenses, insurance helps ensure that patients seek timely medical care, which is crucial in managing high-risk infectious diseases. In parallel, insurers work closely with hospitals to facilitate cashless treatment, ensure protocol-based care, and support continuity of treatment, thereby reinforcing, rather than duplicating, public health efforts,” says Narendra Bharindwal, president, Insurance Brokers Association of India (IBAI).