Are genetic disorders covered by insurers?

A recent ruling by the Delhi High Court has brought good tidings for people with genetic disorders. According to the ruling (on February 26), insurance companies cannot deny health insurance claims to those with genetic disorders. The case was filed against United India Insurance by Jai Prakash Tayal.

The court held that excluding people with genetic disorders from obtaining health insurance or denying to honour their claims is “discriminatory and violative” of a citizen’s right to health.

While on the face of it the ruling appears to offer relief to policy-holders with genetic disorders, digging deeper into the various facts and existing regulations reveals that it is hardly an open-and-shut case. For instance, diabetes and some heart ailments are also genetic and not purely lifestyle disorders, but health insurers cover them. So, what is the market practice? BusinessLine spoke to health insurance companies and underwriters to understand the many ‘ifs’ and ‘buts’ in offering cover to people with genetic disorders.

No tweaking allowed

First, while United India Insurance had, on two occasions, honoured claims of Jai Prakash Tayal for the same illness, it rejected it on the third occasion claiming that it was a genetic disorder and not payable as per the policy. The ‘exclusion’ on ‘genetic disorders’, it appears, was included during the policy renewal and was not intimated to the plaintiff.

The Trial Court, which first heard the case, held that an insurance policy has to be renewed on the existing terms and conditions, and that at the time of renewal, fresh clauses and exclusions cannot be added.

Hence, if your claim has been processed in the past (for genetic disorders), the same cannot be rejected subsequently by adding in fresh exclusions.

Congenital conditions

Second, the case has brought to light the loosely pinned regulations of the insurance market watchdog, IRDAI. The 2016 health insurance regulation, which superseded the 2013 regulation, has no mention of ‘genetic disorders’. In fact, it does not talk of what can be excluded from coverage under health policies, though it defines the term ‘congenital anomaly’ (a condition which is present since birth, and which is abnormal with reference to form, structure or position). There is confusion now because in the 2013 regulation, congenital and genetic conditions were mentioned among exclusions.

So, are health insurers now excluding or covering genetic conditions?

While the regulation is silent on ‘exclusions’, insurers say the regulator is watchful of it when approving the products. IRDAI allows only exclusion of ‘congenital conditions’, and that too if it is external, which is in the visible and accessible parts of the body. If the genetic disorder is not known and manifests itself for the first time after the policy, health insurers generally cover it.

But in the case of non-disclosure of the disorder intentionally at the time of signing up of the policy, claims would be rejected as is the case with any other disease or ailment.

Nikhil Apte, Chief Product Officer, Royal Sundaram, says: “When signing up for the policy itself, one is supposed to disclose the health history, including genetic disorders. If they disclose it, the insurance company will take a call based on underwriting. It will see whether the illness is curable and whether there will be recurrent medical expenses and then decide on the proposal. The insurer may accept it most times after a loading on premium or with a co-pay or sub-limit or sometimes a waiting period. But if the genetic disorder is known but not disclosed and found out later by the insurer, the claim will be rejected.”

The next question is: What kind of claims are rejected at the first instance itself?

“Only genetic disorders, which are not curable or those that have been present from the time of birth, say, a type 1 diabetes or a mental problem, is generally not covered,” said Apte.

This is fair given that the underlying principle of insurance is to provide cover for the unknown risks.

The recent ruling throws up yet another pertinent question: Will IRDAI insist on covering all genetic conditions? If it does, premiums can go up across the board for everyone who buys a health policy.

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