Health insurance policies will have less exclusions as the insurance regulator has come out with a draft exposure to rationalise and standardise the exclusions in health insurance contracts.
Health insurance policies will have less exclusions as the insurance regulator has come out with a draft exposure to rationalise and standardise the exclusions in health insurance contracts. No health insurance policy will exclude diseases contracted after taking the policy, it will not exclude injury or illness associated with hazardous activities and policies cannot exclude treatment of mental illness, stress or psychological disorders and neuro-degenerative disorders.
Health covers will also not exclude Age-Related Mascular Degeneration (ARMD), behavioural and neuro development disorders and even artificial life maintenance including life support machine use. Experts say rationalising exclusions will benefit policyholders and insurance companies will have to increase the premium.
Exclusions, waiting period
At present, all individual health insurance polices have a waiting period of 48 months in which no pre-existing diseases are covered. Hospitalisation expenses related to the declared ailments can be claimed after four years with the insurer. An insurance firm cannot deny a claim after four years of continuous coverage.
At the time of taking a health policy, the individual will have to declare any specific pre-existing diseases such as diabetes, high blood pressure, thyroid, etc. If an individual is suffering from any such disease, the insurance company will insist on a medical test and then underwrite the cover. There are certain ailments such as ENT disorders, hernia, osteoporosis for which the waiting period is usually one or two years.
Exclusion list trimmed
Last year, Irdai had directed insurance companies offering health insurance to cover treatment for mental illness. The directive follows the Mental Healthcare Act, 2017 making it mandatory for insurers to offer medical insurance for mental illness treatments similar to the ones offered for treatment of physical illness. The draft exposure also underlines that treatment of mental illness, stress or psychological disorders and neuro-degenerative disorders will have to be covered.
There will be no exclusions on disorders of adult personality including gender-related problems, disorders of speech and language including stammering, dyslexia. Insurers cannot exclude expenses related to any admission primarily for enteral feedings and other nutritional and electrolyte supplements. Also, internal congenital diseases, genetic diseases or disorders cannot be put on the list of exclusions. Irdai has identified 17 existing diseases that can be permanently excluded.
Cover for modern treatment
To ensure that the policyholders are not denied availability of health insurance for modern treatment methods, insurers will have to ensure that procedures such as uterine artery embolisation, balloon sinuplasty, deep brain stimulation, oral chemotherapy, robotic surgeries, bronchical thermoplasty, etc., are covered. However, subject to product design, sublimits can be imposed for the above procedures.
Insurers will have to adopt an objective criterion while incorporating any limitations and that will be based on sound actuarial principles. In case of mon-declaration or misrepresentation of material facts that are seen during the course of the policy, insurers can permanently exclude the existing disease and continue with the policy. If the non-disclosed condition is other than from the list of permanent exclusion, then the insurer can incorporate additional waiting period of not more than four years for the undisclosed disease.
In case of non-disclosed conditions, the insurance company can continue with the cover by levying extra premium based on objective criteria laid down in the board-approved underwriting policy. After completion of eight continuous years under the policy, no look back can be applied. After the expiry of the moratorium period no health insurance policy will be contestable except for proven fraud and permanent exclusions specified in the policy contract.