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The pre-existing disease syndrome affects the spread of health insurance in India

The pre-existing disease syndrome affects the spread of health insurance in India. IRDA measures can revolutionise the sector.

Harsh Roongta

24 Jun 2009

Ever since the mediclaim policies were introduced in the 1980s, the biggest bone of contention between the insurance companies and the consumers has been the issue of pre-existing disease.


So, what exactly is meant by pre-existing disease? Well in most mediclaim policies it is defined as any disease that the consumer had (whether he was aware of it or not) at any time prior to the commencement of the policy with the insurance company and it also includes any complications arising in the future from such pre-existing disease. Most consumers are normally not aware about is the 2nd leg of the definition (about complications arising from the pre-existing disease). Since the most common pre-existing diseases in India are diabetes and high blood pressure (hyper tension) and these are responsible for a wide spectrum of serious diseases such as heart blockages, organ failure, etc. etc. the consumers are taken aback when the insurance companies deny payment of claim on grounds that these diseases arose from an pre-existing condition and hence will be classified as an pre-existing disease.


It was to avoid these issues that the General insurance Council which is a statutory body of all general insurance companies in India under the Indian insurance Act, 1938 came up with common wordings in respect of pre-existing diseases that was supposed to apply for all policies issued from June 1, 2008.


Firstly the definition of Pre-existing disease was restricted to Any condition, ailment or injury or related condition(s) for which you had signs or symptoms, and / or were diagnosed, and / or received medical advice/ treatment, within 48 months prior to your first policy with us. Clearly it did not include any future complications arising from a pre-existing condition as well as restricted the pre-existing definition to only those conditions that arose in 4 years before the commencement of the policy (and not, as is usually defined, at any time before the commencement of the policy). Although this is a statutory body of the general insurance companies themselves it is surprising that not a single general insurance company has adopted this definition of pre-existing disease.

The same resolution also went on to provide that Benefits will not be available for any pre-existing condition(s) as defined in the policy, until 48 months of continuous coverage have elapsed, since inception of the first policy with us essentially meaning that even these pre-existing conditions will be covered in the 5th continuous renewal.


Here the general insurance industry follows quite a divergent trend.


  1. Most companies follow the above requirement of covering even pre-existing diseases after a cooling off period though it may not be restricted to only 4 years and may be higher.

  2. Some companies require in addition that there be no claim at all (whether from the pre-existing condition or any other condition) during this cooling off period.

  3. A few companies also require that during the cooling off period there should not have been any care, advise or treatment taken in respect of the pre-existing condition thus effectively ruling out any coverage in respect of diseases such as diabetes and hyper tension (and the host of diseases that arise as a result of these diseases) which require regular care and treatment.

  4. Some companies cover complications arising from diabetes and/or hypertension immediately on payment of additional premium over and above the normal premium.


A quick summary of the position taken by general insurance companies is given below:


Product Name

Pre existing Diseases covered after how many years

Any special dispensation for existing diabetics/hypertensives

Apollo DKV - Easy Health Individual - Exclusive

After 3 years of continuous policy years

Apollo DKV - Easy Health Individual - Premium

After 3 years of continuous policy years

 

Apollo DKV - Easy Health Individual - Standard

After 3 years of continuous policy years

 

Apollo DKV - Easy health insurance - Exclusive

After 3 years of continuous policy years

 

Apollo DKV - Easy health insurance - Premium

After 3 years of continuous policy years

 

Apollo DKV - Easy health insurance - Standard

After 3 years of continuous policy years

 

Bajaj Allianz - Health Guard

After 4 continuous policy year

 

Cholamandalam MS General insurance - Family Floater

After 3 continuous policy years where no claim, care, treatment or advice has been recommended by or received from a doctor in relation to such pre exisitng condition during that 3 year period

 

Cholamandalam MS General Insurance - Individual Health

After 3 continuous policy years where no claim, care, treatment or advice has been recommended by or received from a doctor in relation to such pre exisitng condition during that 3 year period

 

Future Generali - Health Suraksha Family Basic

After 4 years of continuous policy years

 

Future Generali - Health Suraksha Family Golden

After 4 years of continuous policy years

 

Future Generali - Health Suraksha Family Silver

After 4 years of continuous policy years

 

HDFC Ergo - New Healthwise

Not covered

 

ICICI Prudential - MediAssure (Classic)

Pre existing illnesses and conditions which are declared at inception and specifically accepted by the company would be covered

 

ICICI Prudential - MediAssure (Premium)

Pre existing illnesses and conditions which are declared at inception and specifically accepted by the company would be covered

 

IFFCO Tokio - Individual Medishield

After 3 continuous policy years where no claim, care, treatment or advice has been recommended by or received from a doctor in relation to such pre exisitng condition during that 3 year period

 

National Insurance - mediclaim Policy

After 4 continuous claim free policy year

 

National Insurance - Parivar for Family

After 4 continuous claim free policy years

 

New India Assurance - Mediclaim

After 4 continuous claim free policy year

Yes from 2nd year, on payment of additional premium

Oriental Insurance - health insurance

After 4 continuous policy year

 

Reliance General - Healthwise Silver 1 year

After 2 years of continuous policy years

 

Reliance General - Individual Mediclaim

Not covered

 

Royal Sundaram - HealthShield Standard

After 5 continuous policy year

 

Star Health - Family Health Optima

After 5 years of continuous policy years

 

STAR Health - Medi Classic

After 5 continuous policy year

 

United India Insurance - Mediclaim Policy Gold

After 3 continuous claim free policy year

Yes after paying an extra premium of 30 per cent


The big point is that it is only now that consumers are beginning to understand the need for health insurance and the market has started growing rapidly. Any large-scale dispute on claims is likely to affect the consumer confidence in the product. IRDA (which is the regulator for the insurance industry) already has in its circular of March 31, 2009 required that there should be transparency about the coverage of pre-existing diseases. However, given the widely divergent practices followed by the Insurance industry it might be useful if IRDA was also to lay down specific guidelines in this regard. Also, once some degree of standardization has been achieved, the industry as a whole (or perhaps IRDA) should carry out continuing consumer education on this important point so that consumers are able to take an informed decision and do not loose confidence in this vital insurance product.


Summary

Definition of what constitutes Pre-existing disease why is it important

In most mediclaim policies hospitalization expenses arising from pre-existing conditions are not allowed. Most disputes between insurance companies and consumers on claims made for hospitalization expenses arise from this point.

Most important point in the definition which is often not understood by consumers

It is not just the pre-existing condition that is not covered (for example diabetes) but even future complications arising from such disease (for example coronary artery disease) which will be denied coverage. Also it does not matter whether the consumer himself was aware or not of the pre-existing condition, it will still not be covered

This is relevant for

Any consumer who has any pre-existing condition

Do hospitalization expenses arising from pre-existing conditions get covered any time in the future

No standard rules.

Some policies simply do not cover pre-existing diseases at all no matter how many years you renew the policy

Some polices will cover it after a cooling off period of few years (normally 4 to 5)

Some companies have stricter coverage requiring that there be no claims during the cooling off period

Some companies have even stricter condition that coverage will be provided only if no advise, care or treatment is taken for the pre-existing condition during the cooling off period.



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