Don’t Let Existing Diseases cut into your Health Cover

[Apollo Munich CEO]

Don’t Let Existing Diseases cut into your Health CoverIndia is called
the world’s diabetes capital. As per estimates, about 10-12 per cent
of India’s urban population is suffering from diabetes. The numbers
are expected to shoot up, given the sedentary lifestyle, lack of
physical activity and a balanced diet. Statistics for hypertension and
heart-related ailments are equally alarming. Increasing cost of
healthcare has made health insurance cover a necessity. But, do
insurance companies provide health insurance coverage to those
suffering from a pre-existing disease?

The answer is a conditional ‘yes’. As per the Insurance Regulatory and
Development Authority (Irda) order, insurance companies will have to
provide health insurance to those suffering from pre-existing diseases
after a waiting period, although, they are allowed to load additional
premium to cover known ‘risks’.

What is a pre-existing disease? A pre-existing disease is defined as
any known medical condition, ailment or injury or related condition(s)
one has suffered within 48 months prior to the commencement of the
health insurance policy. Pre-existing diseases are not just serious
ailments, such as a heart condition or cancer, it can also be
hypertension, asthma or diabetes or any previous injury.

Before taking an insurance cover, as a part of underwriting process,
one has to make health declarations. It is important to make full and
correct disclosures to an insurance company in the policy proposal
form, because not doing so is considered a fraud. If at the time of a
claim, the insurance company finds out that information was
deliberately hidden, it can reject your claim and leave you in soup.

“It is always advisable that the policyholder undergoes a medical
examination before taking a new health insurance plan. That way, the
insurance company is aware of the medical condition of the
policyholder beforehand and conflicts are reduced during the claims
process. Also, depending on the policyholder’s medical records, an
insurance company can either charge extra premium or impose permanent
exclusions on certain diseases and ailments related to that disease,”
said Antony Jacob, chief executive officer, Apollo Munich Health
Insurance.
Insurance companies are wary of issuing health cover to those
suffering from pre-existing diseases because the risks and likelihood
of claims are higher. Insurance coverage of pre-existing diseases
starts after the waiting period is over without a break in the policy.
Waiting period is between two-four years, depending on the insurance
company. It also varies with each ailment.
“Supposing, the policyholder has a pre-existing disease and takes a
new policy, then he may file a claim for the pre-existing disease
after the specified waiting period, even if he suffers from the same
condition during the waiting period. However, the insured cannot file
a claim for the disease during the waiting period,” said D Rama,
assistant vice- president, product cell of Star Health and Allied
Insurance.

If you are suffering from a pre-existing condition, check out the
coverage and premium offered by specialised health insurance
companies, such as Max Bupa Health Insurance, Star Health and Allied
Insurance and Apollo Munich Health Insurance. They may offer you a
better deal.
Disclosures: Most claim rejections by insurance companies are on
account of pre-exiting diseases. While, insurance companies claim that
the policyholder intentionally did not disclose the condition, it is
possible that the policyholder was not aware of his condition.

Often, insurance agents dissuade customers from making a full
disclosure, citing it as a reason for rejection of the policy. Setting
aside such allurements, making disclosures would make filing your
claims easier.

Coverage of pre-existing diseases varies from company to company. If
you are looking at health cover for a pre-existing disease, do your
homework. Get in touch with more than one insurance company and
understand the terms and conditions. Some companies may give you
partial cover for pre-existing diseases. It may be better to pay a
little more and take full cover for pre-existing diseases. Reading the
fineprint with emphasis on exclusions in your policy would be
important. Even after enrolling yourself, if you are not happy with
terms sand conditions, you can return the policy during the free-look
period within 15 days and get a refund.

“Cataracts, hernia, piles, arthritis, sinusitis are generally excluded
in the first year of the policy. Major life-threatening, pre-existing
diseases are generally covered after four years. If the insurance
company covers a pre-existing disease, then related ailments are also
covered under the policy. Insurers generally decline 3-5 per cent of
claims because the insured had either not declared the pre-existing
diseases or supporting documents related to the ailments were not
furnished,” said Sanjay Datta, head customer service, ICICI Lombard
General Insurance.

Portability: To provide an option and flexibility to health insurance
customers, beginning October 1, health insurance portability was
introduced. Health insurance customers can switch between companies,
along with all the benefits including the no-claim bonus option and
most importantly, benefits, such as waiting period for pre-existing
diseases. Policyholders will be allowed to carry forward the waiting
period to the new insurance company. For example, the waiting period
for a pre-existing disease does not change by switching to another
company. If the waiting period is two years, it will remain the same
irrespective of the company that covers the customer. Under
portability, a customer needs to approach a new insurer within 45 days
before his policy renewal date.

Refusal: Some insurance companies can refuse health cover to some pre-
existing chronic ailments, citing those particular diseases as
permanent exclusions. Each insurance company has a list of permanent
exclusions. All insurance policies are issued at the discretion of the
insurance company and as such, a company can decline your policy
proposal on a case-by-case basis. Companies provide health cover based
on their risk perception.

Group insurance schemes: Pre-existing diseases are generally covered
in group insurance plans from the first year itself. If you have a
group cover, mostly funded by employers, do find out about the
inclusions and exclusions. In some group insurance policies, there is
an option to co-pay for pre-existing covers, where in case of a claim,
the cost will be shared by the insurance company and the insured.

Travel insurance: Pre-existing diseases are generally excluded from
travel insurance policies. In case of hospitalisation during travel
abroad, your insurance companies may reject claims. However, some
companies such as Bajaj Allianz General Insurance have started
covering pre-existing medical conditions also in travel insurance. If
you are suffering from an ailment, it is better to check with the
insurance company if it is covered, only then, you should buy a
policy. ICICI Lombard General Insurance covers pre-existing diseases
in life-threatening emergency situations.

Past treatment: A lot has changed with respect to treatment of pre-
existing diseases by insurance companies. Earlier, due to ambiguity in
the definition of pre existing diseases, companies rejected claims
citing conditions.

From a customer’s perspective, however, the concern expressed is that
some insurers are using the concept of “pre-existing condition” as an
unfair means to deny or reduce coverage or payment. Such practices
affect the credibility of a health insurance product and are one of
the potential reasons for lack of acceptance/popularity of health
insurance products in India.
To check malpractices and offer uniformity in health insurance
policies, the General Insurance Council (GIC), a statutory body for
all non-life insurers, has come out with a uniform definition on pre-
existing diseases. Also, all policies issued from June 1, 2008, will
cover pre-existing diseases from the fifth year of the policy. By the
new standard definition, pre-existing exclusion means “the benefits
(of health insurance) would not be available for any condition,
ailment or injury or related conditions for which the insured had
signs or symptoms, and/or was diagnosed and/or received medical advice/
treatment, prior to inception of the first policy, until 48
consecutive months of coverage have elapsed, after the date of
inception of the first policy”.