In order to make health insurance more customer friendly, a working group set up by the insurance regulator has recommended that diseases such as Alzheimer’s, Parkinson’s, AIDs/HIV acquired after the policy inception should not be be excluded. It has recommended that there should not be any permanent exclusion in the policy wordings for any specific disease, whether it is degenerative, physiological or chronic in nature.
The Insurance Regulatory and Development Authority of India (Irdai)’s working group report for standardisation of exclusions in health insurance contracts has recommended that waiting periods for any specific disease can be a maximum of four years. However, waiting periods for conditions such as hypertension, diabetes, cardiac cannot be for more than 30 days.
The panel had initially recommended a list of 17 conditions for which insurers can incorporate permanent exclusions if they are pre-existing at the time of underwriting. It also suggested that a standard format of consent letter to be given by the proposer may be specified. Sub-limits or annual policy limits for specific diseases in terms of amount, percentage of sum insured and number of days of hospitalisation will be part of the policy design.
Non-disclosed conditions
Non-declaration or misrepresentation of material facts is a major concern in health insurance. The working group has recommended that after eight years of continuous renewals, claims cannot be questioned based on non-disclosure or misrepresentations when taking policy. The policy will be incontestable in terms of application of any exclusions except for proven fraud as well as permanent exclusions specified in a policy contract.
Standardisation of exclusions
The panel has recommended that exclusions because of alcohol or substance abuse must be reviewed and standardised. This exclusion will be modified to exclude only treatments for alcoholism and drugs or substance abuse unless associated with mental illness. It has also recommended formation of Health Technology Assessment Committee, which will examine and recommend inclusion of advancements in medical technology as well as new treatments/ drugs for coverage under insurance.
It has also recommended that “no exclusions” should be permitted for any advancement in technology or advance treatments if these are in the list approved by this committee. However, insurers can either incorporate co-payments for such treatments or subject them to the usual, customary and reasonable clause. Insurers cannot deny coverage for claims of oral chemo therapy and peritoneal dialysis.
The panel suggested that insurers start adopting an Explanation of Benefits in their prospectus and policy schedule which would be understood by customers.
The panel has also said that new treatments such as balloon sinuplasty, deep brain stimulation, oral chemotherapy, immunotherapy, robotic surgeries, and stem cell therapy may be included in health covers. In case of migration to another policy because of product withdrawal, the policyholder will be given credit to the accrued gains of pre-existing diseases waiting period to the extent that is permitted either in the porting out product or porting in product, whichever is less.
In order to make the pricing structure transparent, the panel has suggested that every insurer publish the list of items which will not be billed separately and make it available to the insured either in the policy contract or as a link on the website.