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The many confusions and disputes in COVID-19 insurance settlements

The many confusions and disputes in COVID-19 insurance settlements

a man standing in front of a door: The many confusions and disputes in COVID-19 insurance settlements

© Venkatasubramanian K
The many confusions and disputes in COVID-19 insurance settlements

Abhishek Bondia

“Make sure you assess your viral load based on the CT value,” Biocon’s Kiran Mazumdar Shaw suggested in her blog about ways to manage COVID-19 after successfully recovering from the illness. The Hindu was quick to declare shortly after Shaw’s blog was published that there is “no correlation between CT values and COVID-19 severity.” Such contradictions have been a hallmark of this evolving pandemic. Similar confusion has prevailed in several parts of insurance delivery. At times, this has compounded the issues for the policyholder, who is battling a relatively less understood illness, the social issues attached to it, and limited supply of proper care.

Confusion despite clarification

At the onset of the pandemic, the insurance regulator clarified that all standard health insurance policies cover COVID-19 and asked for insurers to be extremely cautious before rejecting a COVID-19 claim. However, several issues emerged despite such a broad clarification. Would hospital quarantine be covered under insurance, if you are not tested positive but suspected of COVID? Is a claim admissible if a COVID-positive patient is hospitalized to ensure the condition does not deteriorate, but the line of treatment is conservative? Insurance policies generally do not reimburse expenses incurred for observation purpose. If a patient chooses to be treated at home instead of getting hospitalized, would the expenses be reimbursed? In policyholders’ minds, home treatment leads to lower outgo for the insurer. So, they have a commercially rational expectation to have at least the reduced expenses reimbursed. But, in most policies, a minimum 24 hours of hospitalization is required for a claim to be accepted.

Scarcity premium

Scarcity of hospital beds, which resulted in price increases, has been another major source of customer dispute. Several hospitals have unilaterally increased

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USOPC Suing Insurance Carriers for Allegedly Delaying Larry Nassar Settlements | Bleacher Report

USOPC Suing Insurance Carriers for Allegedly Delaying Larry Nassar Settlements | Bleacher Report

FILE - In this Jan. 24, 2018, file photo, Larry Nassar, a former doctor for USA Gymnastics and member of Michigan State's sports medicine staff, sits in court during his sentencing hearing in Lansing, Mich. MSU is defending itself against a second wave of lawsuits related to Nassar but says it wants to reach a deal with the additional assault victims. MSU defended itself in a court filing Monday, Aug. 26, 2019. It says it's immune to liability for Nassar's crimes, no matter how

Carlos Osorio/Associated Press

The U.S. Olympic and Paralympic Committee reportedly filed a lawsuit in a Colorado district court on Thursday against its insurance carriers, claiming they are delaying payments stemming from the Larry Nassar sexual abuse fallout.

Nancy Armour and Tom Schad of USA Today reported the news, noting the USOPC has not reached a settlement with the more than 500 girls and young women who sued the organization and USA Gymnastics because they said they were sexually abused by Nassar or others within the sport. 

Mediation has lasted approximately a year and a half, and USOPC said the 11 insurance companies it is using have “failed to honor their promises,” which has delayed any settlement payments.

“This lawsuit seeks to have a court resolve the issues related to the insurers’ obligations, as part of our efforts to achieve a fair resolution for the victims and survivors,” board chair Susanne Lyons said.

Armour and Schad explained the lawsuits filed by the survivors against USA Gymnastics and the USOPC were put on hold in December 2018 when USA Gymnastics filed for bankruptcy, but the organization must reach a settlement agreement or the lawsuits can resume.

As part of the lawsuit against the insurance carriers, the USOPC denied responsibility for Nassar and said it took out the insurance policies so it didn’t have to pay the claims to survivors and could continue funding other athletes.

Armour and Schad also noted on Aug. 24 the USOPC joined a joint motion filed on Aug. 20 by USA Gymnastics and the survivors that said the insurance carriers were stalling settlement negotiations “for their own economic benefit.” 

In 2018, Nassar, who was a former USA Gymnastics and Michigan State University physician, was sentenced to 40 and 175 years in prison.

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