Norms on standardisation of health cover and exclusions help customers to better understand insurance policies
It’s been a terrible 2020 no matter where in the world you are or what you do for a living.
With 2021 bringing in rays of hope on a workable vaccine for COVID-19, let us look at some positives in insurance as well that could be available to us in the future.
The Insurance Regulatory and Development Authority of India (IRDAI) has been coming out with standardised covers in health and life insurance, thus creating a basic definition of what should be in such a policy. Using these as reference points, we can understand other policies and identify the benefits and terms we want.
Along with a standard individual health insurance product, the regulator has also published guidelines on standardisation of health insurance and of exclusions — that big bugbear of insurance.
It has long been said that the gap between expectation and reality is the reason why we are so disenchanted with insurance, especially health insurance. One way to ensure expectations themselves are based on reality is to establish a common definition of the technical terms used in policies. This is an important part of the guidelines on standardisation of policies.
Standards for hospitals
Insurance terms, be they co-payment, deductible or network provider; and medical terms and standard nomenclature from blindness to end-stage liver failure; to activities of daily living, are detailed under these guidelines.
So are standards and benchmarks for hospitals in the provider network beginning with certification from the National Accreditation Board for Hospitals and Healthcare Providers.
On the same page
While we may not be looking at these while buying policies, it helps to know that they are being codified and defined so that all of us — customers, insurance companies and medical service providers — have a common understanding of the terms used.
The standardisation of exclusions presents an especially interesting picture. Take artificial life maintenance, including by use of a life-support machine where it will not lead to patient recovery.
These expenses cannot be excluded up to the point when a treating doctor confirms that the patient is in a vegetative state and they will be payable under the framework of the policy.
Treatment of mental illness, stress or psychological disorders and neurodegenerative disorders cannot be excluded and neither can puberty and menopause-related disorders, age-related macular degeneration, disorders of speech and language, including stammering, dyslexia, expenses related to any admission primarily for enteral feeding and failure to seek or follow medical advice or failure to follow treatment.
Some existing diseases are allowed to be permanently excluded, including with due consent of the proposer or person to be insured, only if coverage may be denied as per the underwriting policy of the insurer.
However, after completion of eight continuous years of coverage, called the moratorium period, no health insurance policy shall be contestable except for proven fraud and permanent exclusions specified in the policy contract.
The guidelines also say that all policies shall cover modern treatment methods and advancement in technologies, listing several such procedures such as oral chemotherapy, immunotherapy, robotic surgeries, vaporisation of the prostate and stem cell therapy and that insurers may endeavour to cover any other modern treatment methods as well.
Another sign of thinking along with the times is that the guidelines mention that rest cure, rehabilitation and respite care, including custodial care for help with bathing, dressing and moving around, which is an exclusion now, is something that insurers should try to cover with add-on riders — especially the coverage that kicks in at age 65 onwards.
(The writer is a business journalist specialising in insurance & corporate history)