IRDAI panel recommends diseases after health policy purchase should be covered

As per recommendations of a panel set up by Insurance Regulatory and Development Authority of India (IRDAI), Chronic diseases like Alzheimer's, Parkinson’s, AIDs/HIV infection and Morbid obesity should be covered under medical cover if a person contracts such ailments after buying a health insurance policy. IRDAI had set up this panel for standardisation of exclusions in health insurance contracts in July this year. The panel has submitted its report containing host of recommendations to the regulator. This panel has also suggested a list of 17 diseases, including chronic kidney disease, Hepatitis B, epilepsy and HIV & AIDS, which could be excluded from health insurance policies. Alzheimer’s and Parkinson’s disease are on the list and will not be covered if they are pre-existing conditions.

The panel has also noted that non-declaration/ misrepresentation of material facts is a major concern in health insurance contracts. There may be cases where major ailments are detected as pre-existing during 4th or 5th renewal when a person is admitted for some other ailment. In such cases, if the non-disclosed condition is from the list of the permanent exclusions, the insurer can take consent from the insured person and permanently exclude the condition and continue with the policy. If the non-disclosed condition is other than from the list of permanent exclusions, then the insurer can incorporate additional waiting period for the maximum period of 4 years from the date of detection. During the waiting period, claims are not admissible. This panel further recommended a moratorium period of 8 years of continuous renewals, after which the claim shall not be questioned based on non-disclosures or misrepresentations at the time of taking the policy. Another recommendation is that the exclusions applied by insurers for alcohol and substance abuse must be reviewed and standardised.

As per the report, the panel felt that with advancement in technologies as well as covers, the policies are moving from hospitalisation insurance policies to comprehensive coverage, including outpatient. Hence, to enhance transparency and increase the understanding to the policyholders, it is suggested that insurers start adopting an explanation of benefits (EOB) in their collaterals as well as policy schedule / wordings which would be easily understandable by the customers.