Health Insurance may become more consumer friendly: IRDAI panel calls for removing these exclusions – Financial Express – 12th November 2018

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 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, and 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.
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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.

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