Health insurance: Time to act

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Health insurance has become indispensable. The pandemic has taught us why it is an integral part of financial planning. Last year the regulator ushered in changes to rationalise and standardise exclusions in health insurance policies. Following those guidelines, insurance companies can no longer deny coverage to a patient for 17 critical diseases such as HIV, AIDS, Alzheimer’s, Parkinson’s, Epilepsy and Hepatitis B. They can either make it as a permanent exclusion or can bring in sub-limits and restrictions according to the underwriting practices of the company.

Similarly, along with mental illness, 11 other illnesses such as psychological disorders, behavioural and neuro-developmental disorders, genetic disorders puberty and menopause-related disorders are removed from the exclusion list. It means that the insurer now has to cover them.

With the inclusion of these illnesses, the scope of health insurance policies has increased manifold. There was a time when insurance companies used to outright deny coverage for many such diseases. But now policyholders can buy health insurance even with high-risk conditions such as Parkinson’s and Alzheimer’s. All you need is to declare the condition to the insurer at the time of buying a policy. As per regulatory guidelines, insurance companies cannot deny coverage to a patient.

Health insurance premium rates have also increased following this standardisation and widening of cover but still a lot needs to be done from the insurers’ side to cover the gap. While the regulator has already given the structured approach, the challenge lies at the level of the insurance company to incorporate these changes.

It is the role of Irdai to ensure that insurers comply with the guidelines and not turn a blind eye to the non-implementation of the same. In April 2021 Delhi High Court had to intervene and say that the treatment of schizophrenia is reimbursable and cannot be denied. Justice Prathiba M Singh said that any delay in doing so would be “contrary to the letter and spirit of the law” by insurance companies.