Newborn health coverage remains limited despite IRDAI's directives

Health insurance coverage for newborns remains limited or non-existent, making it hard for parents to afford treatment, despite directions from the Insurance Regulatory and Development Authority of India (IRDAI).

Doctors say that about 5 per cent of newborns require two to three months of treatment in the Neonatal Intensive Care Unit (NICU) for serious infections, birth complications, or congenital abnormalities.

Dr Prashanth Urs, a neonatologist, noted that NICU costs in private hospitals can hit Rs 30,000 daily, often unaffordable for parents during extended treatment.

While many popular health insurance packages now offer coverage for babies from day 1 of birth, it is typically included as part of the maternity package. However, most policies only provide maternity benefits within Rs 1 lakh. Given that delivery costs alone in cities like Bengaluru can reach Rs 70,000, there is limited coverage left if the newborn requires separate treatment.

Data from the insurance broker platform PolicyBazaar.com reveals that among the most popular policies in India offering maternity coverage, only around four provide additional coverage for babies aged between day 1 and 90.

For instance, one well-known health insurance company offers an additional coverage of Rs 10,000 for the newborn under the parents' policy with coverage of Rs 10 lakh. Another company provides an additional coverage of Rs 50,000 under a Rs 10 lakh policy for the parents. However, these amounts would be insufficient to cover major expenses in the first three months.

Currently, only two companies offer better additional coverage or full policy coverage for newborns from day 1.

Siddharth Singhal, Business Head (Health Insurance) at PolicyBazaar.com, notes that most companies offer the option to add the child to the policy starting from day 91.

Pediatrician Dr Rajath Athreya said that parents working in corporates and central government organisations typically have better coverage through their employers.

"A small section of corporates offer separate coverage from day 1, while the majority provide a 'Well Baby' package that covers the newborn's immediate hospitalisation costs in case of complications, although it doesn't cover long-term NICU expenses," says Aditya Bagarka, Head of Strategy and Innovation at Plum, a platform offering insurance solutions to corporates.

'Newborn' category

In 2016, the Insurance Regulatory and Development Authority of India (IRDAI) defined the 'newborn' category as a child aged between day 1 and day 90. Last year, the authority also mandated that policies should cover congenital anomalies in newborns and infants.