Health Insurers Barred from Excluding Many Illnesses

In a recent move by IRDAI (The Insurance Regulatory and Development Authority), the health insurance companies are barred from excluding many illnesses. Earlier, any illness related to hazardous work activity, mental illness treatment, obesity/weight control procedures, internal congenital diseases, age-related degeneration, and artificial life maintenance activity were excluded under many health insurance plans. But, this announcement by IRDAI is surely going to benefit lakhs of policyholders.

IRDAI also specified that age-related conditions such as Alzheimer’s, cataract, knee-cap replacements and Parkinson’s would also need to be covered. Also, workers working under hazardous work conditions and exposed to harmful chemicals cannot be barred from skin or respiratory-related treatment that arises as a result of being exposed to such harmful conditions. Treatment related to stress, mental conditions or psychological disorders cannot be excluded. Also, the impairment of facilities due to long use of prescribed drugs needs to be covered.

There is also standardisation of exclusions, which states that if any insurer does not want to cover HIV/AIDS, epilepsy or chronic kidney disease then specific wordings need to be mentioned in the policy document and the waiting period of 30 days or 1 year needs to be specified after which coverage would begin. 

These guidelines would greatly benefit those policyholders who disclose their pre-existing conditions. As per IRDAI, each insurer is bound to provide coverage to the policyholders for their pre-existing diseases after the waiting period of 48 months or sooner, as mentioned in the policy document.

The standardisation will also help in portability, as the new insurer cannot set the undue waiting period. IRDAI said that if the policyholder has completed a part of the waiting period under its old policy then on porting to a new insurer, the new insurer can impose only the unexpired or residual waiting period not more than 48 months from the first issuance date of porting out of policy.

Gurdeep Singh Batra, head (retail underwriting), Bajaj Allianz General Insurance said that the standardisation of exclusion wordings across all insurers would help in providing a better understanding to the policyholders and avoid any grey areas.

But TPAs and brokers are both sceptical of the move. They warn that while this is a great move for the policyholders; however, with the rise in the claims faced by the insurers, there might be a drastic increase in the premiums too.

IRDAI has given the insurers an extension of one year by October 2020 to meet the new standardised guidelines. IRDAI has specified that all the new products filed from October 1, 2019, will be based on the new guidelines and all the existing products will continue until September 2020. Also, the insurers will have to revise all the existing products as per the guidelines and withdraw all the products not confirming the guidelines by October 2020.

Chief operating officer, Future Generali India Insurance Company, Shreeraj Deshpande said that the guidelines set would disallow any disputable or ambiguous exclusions.

Subramanyam Brahmajosyula, head — underwriting & reinsurance, SBI General Insurance Company Limited  is of the view that these measures initiated by IRDAI are definitely going to help with health insurance penetration medium to long term.

However, this move by IRDAI is considered as a result of the report submitted by the working committee in November 2018 regarding exclusions under various health insurance policies. 

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