i Getting a health insurance cover can set one’s pulse racing — what with the large checklist and comparisons between products, insurers, the hospital network, room rent, reimbursement, pricing, exclusions, et al .

And yet, claims get rejected for reasons including the customer not having read the fine-print initially or because the insurer has a problem with the claim.

All this could change, depending on how the Insurance Regulatory and Development Authority of India (IRDAI ) acts on recommendations from a working group it set up to standardise health exclusions. Standardising exclusions will bring in transparency on the part of the insurance company, besides encouraging disclosures by customers so they are clear on the illnesses that will not be covered. Presently, patients and their families have that niggling worry whether their insurer will pay for a real medical emergency, despite paying premiums annually.

The recommendations are “customer friendly” and seek to reduce ambiguity around exclusions, says Vaidyanathan Ramani, Head (Product and Innovation), Policybazaar.com. “There have been cases where long standing customers, who have had health insurance for, say, 13 years have been told that the disease is pre-existing and the claim will not be accepted.”

About 70 per cent of all medical insurance features are similar, it is the 30 per cent that is different, and tricky. “For instance, oral chemotherapy is excluded in many policies. Unless they have been diagnosed with a condition, no one really pays attention to such details,” notes a health insurer.

Media professional P Shah is not clear why his insurance claim of around ₹75,000 for his wife’s hospitalisation is pending. “My wife was hospitalised twice. Part of the claims for both the instances of hospitalisation is still pending,” he says, adding that the claim, pending for two months, is now up for re-examination according to his agent. The IRDAI committee report seeks to weed out such anxiety by having clearer definitions on pre-existing ailments (diagnosed before the policy was taken), a standardised list of diseases (see box) for permanent exclusions and a waiting-period cap of 30 days for lifestyle diseases like hypertension, diabetes and cardiac problems.

For customers paying their health premium diligently every year, the report suggests that the policy be “non-questionable” after eight years of renewals, even in case of non-disclosure or misrepresentation. The report also suggests a four-year waiting period (against two years now) for inclusion of any ailment in the health cover.

Pain point

The recommendation of permanent exclusion for 17 pre-existing diseases has raised the hackles of people who see insurance as a “fair-weather friend”. “Health insurance in the country is never comprehensive. And a proposal like this merely reduces the amount of claims, while increasing premiums,” says Jayant Singh, who received a hefty medical bill from Fortis Hospital after his seven-year old daughter Adya passed away last year from dengue. “What is the point of taking insurance if it does not cover a critical illness?” asks Singh, unhappy that such working groups do not represent the patients’ voice.

Other countries cover a pre-existing illness by raising the premium initially and having a waiting period of, say, three years, but the patient is covered after that and the premium too levels out, he says. Singh, along with other patient families, has started the Campaign for Affordable and Dignified Healthcare.

Gaurang Damani, a PIL (public interest litigation) petitioner on health insurance regulations, feels the report is an “honest effort”, but much will depend on its implementation.

The report clarifies that people with a history of serious medical illnesses, like cancer survivors, can purchase a general health cover, something that was not earlier possible.

“The report, if accepted, limits the scope of interpretation in the insurance policies, which can often lead to litigation. The proposed technical assessment committee, which will keep reviewing the exclusions, is also a good move. Retaining pre-existing exclusions is very important for long-term sustainability of insurance, because, if all diseases are covered with no exclusions, it will be unfair to the healthy population who buy policies,” says Anurag Rastogi, Member, Executive Management, HDFC ERGO.

The onus is also on policyholders for a full disclosure — the reason being a 25 per cent spike seen in claim ratios after the two-year waiting period for defined conditions and treatments gets over, the report explains. In other words, the patient possibly had a pre-existing illness and waited for the mandatory period before seeking claims for treatment.

The report now awaits IRDAI’s action, and this will determine how it pans out for patients.

( With inputs from PT Jyothi Datta )

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