Health insurance is an essential product for every person out there, but it is not the easiest to get if you are not in the best of health. Health insurance companies have a bias toward younger, healthier clients as they’re aware the risk of claims is lower in this category. 

 

And those who are not in this category, such as aged persons, people with pre-existing conditions, those who underwent a major surgery, people with mental and physical disabilities – essentially those who ‘need’ a health policy more than others – are denied health cover.

 

We have come across two Moneylife subscribers trying to get a health insurance, and their struggle through the entire process. The first is trying to get an additional mediclaim for himself and his wife. He chose a group policy offered through banks for this purpose. The insurer of this group policy is the same one that he is currently insured with in a different bank’s mediclaim. The new policy he wishes to purchase has been denied to his wife on the basis of her pre-existing disease (PED). Here is his story -

 

My wife suffered from cancer of the uterus about 10 years ago. Her uterus was removed; she was treated for cancer and cured completely. Thereafter, for many years she regularly underwent blood test as well as PET scan. The tests were always negative. 

 

Finally, the doctor declared, “Now there is no need to keep testing again and her chance of getting cancer again is like any other normal person.”

 

I came to know about the AMHI-Canara Bank group health policy. I approached the Canara Bank, opened an account and applied for two individual policies. I told all the history and produced doctor’s certificates. AMHI declined to grant the policy. 

 

I told them that the IRDAI definition covers PED for only 48 months before the application. My wife was fully cured for many more years ago and so as per the IRDAI definition, she had no PED at all. 

 

Moreover, the policy document had no clause to deny cover in the case of PED (it only mentioned about the waiting period). Thus, as per the rules there was no basis for denial. They did not reply despite reminders, but refused to issue the policies.”

 

In the above situation, there is a conflict between two important things – first is the insurer’s right to underwrite and second, the insurance regulator IRDAI’s standard definitions that are supposed to be the basis for underwriting. 

 

This is the definition of pre-existing disease as per the latest Master Circular on Health Insurance released on 22 July 2020, page 10: Link - https://www.irdai.gov.in/ADMINCMS/cms/whatsNew_Layout.aspx?page=PageNo4196&flag=1

 

 

If a person who has undergone a surgery or had an illness,but was then declared as healthy as any other person for more than 48 months, then such a person does not have a ‘PED’. But insurers think otherwise, and have been using their independent judgment, which is different from that of IRDAI and sometimes even their own policy wordings.

 

Secondly, there is no clause that says that an insurer can reject your case because you have a PED. This is why there is a PED clause stating there will be a 3 or 4 year waiting period on all claims arising out of PEDs.

 

The subscriber had faced this challenge even for purchasing the first mediclaim policy. All necessary information of his wife’s PED was disclosed and doctor’s certificates submitted as well. However, he was first issued the policy and later notified of termination of policy due to non-disclosure of vital facts. The case was taken to the Insurance Ombudsman, who heard both sides and asked the insurer to reinstate the terminated policy.

 

So the solution for others who have faced a similar situation is to approach the Ombudsman. But the Ombudsman is only helpful if you already have a policy and face grievances that were not resolved satisfactorily with the grievance cell of the insurer.

 

So what should a person who is outright denied cover do? Let’s look at another case.

 

Here is another subscriber trying to get additional mediclaim for his child who suffers from anxiety/OCD. The person tried asking for cover to multiple insurers, and with the minimum demand of at least getting a cover for physical ailments, if not comprehensive cover.

 

Yet, the insurers denied his proposal. He then tried to escalate the issue to the Insurance Ombudsman, but was told that the Ombudsman would only help if you have issues with an existing policy. The Ombudsman directed him to approach the IRDAI to resolve his simple request.

 

Firstly, your health insurance/mediclaim must include coverage for mental illness. The IRDAI has clearly mentioned this in the latest consolidated guidelines, which have come into force with immediate effect. Link, page 9 - https://www.irdai.gov.in/ADMINCMS/cms/whatsNew_Layout.aspx?page=PageNo4197&flag=1

 

The Mental Healthcare Act, 2017 has come into force w.e.f 29th May, 2018. As per Sec 21(4) of the said Act, every insurer shall make provision for medical insurance for treatment of mental illness on the same basis as is available for treatment of physical illness. Insurers shall comply with the relevant provisions of this Act without fail.

 

Now coming to the other part i.e. underwriting policy of the insurer. IRDAI in an order in June 2020 said, “insurer shall evolve a health insurance underwriting policy covering approach and aspects relating to offering health insurance coverage not only to standard lives but also to substandard lives.

 

Further insurance companies shall also comply with various provisions of HIV and AIDS Prevention and Control Act, 2017 and Mental healthcare Act, 2017.”

 

The regulator desires all insurers’ targeted population to have complete knowledge on the philosophy that the insurers adopt while adhering to the coverage philosophy of above mentioned categories.

Essentially, the IRDAI order suggests that insurers to be transparent about who they wish to cover, while at the same time asking insurers to develop a more inclusive underwriting policy.

 

Considering these matters may take some time to fully resolve, our suggestion to those seeking resolution and whose matters do not fall under the purview of the Insurance Ombudsman, should follow the complaint process notified by IRDAI on their website. The process can be found in this link- https://www.policyholder.gov.in/Report.aspx