- Date : 10/03/2023
- Read: 3 mins
A look at the new standard insurance policy for people with mental health issues, disabilities and HIV/AIDS
The Insurance Regulatory and Development Authority of India (IRDAI) has recently authorized the introduction of health insurance coverage for mental health conditions, HIV/AIDS and disabilities. It has instructed insurance companies to use the model framework devised by the apex insurance agency. Insurers can widen the scope of the framework but are not to narrow it down to exclude any of these newly added medical conditions. In the recent past, similar standardised products have been mandated by the IRDAI, like Aarogya Sanjeevani, Corona Kavach and Saral Pension.
The Need for This Mandate
Insurers are anyways required to treat mental and physical ailments equally. IRDAI had instructed insurance companies to comply with the Mental Healthcare Act, 2017 after it came into effect in May 2018. And yet IRDAI felt the need for the creation of a model product to specifically include these ailments.
This is because people with mental health issues, HIV/AIDS and disabilities continue to face issues while buying health insurance policies. Insurers exercise their discretion to accept or reject an application based on the severity of the medical condition. This situation is expected to be addressed by the implementation of this model framework. Besides, insurers will now have to lay down board-approved underwriting policies to extend the coverage of these policies. This will ensure that no policy is rejected because of the pre-existence of these diseases.
Inclusion of Pre-existing Conditions
As the model product is introduced for people with mental health conditions, HIV/AIDS and disabilities, the existence of the same will be known to the insurer at the time of policy purchase. This will increase the transparency of disclosure in these policies, which in turn will reduce the issues faced at the time of claim settlement. However, with the pre-existence of these diseases known, the premium for this product can be expected to be on the higher side.
Along with these medical conditions, a policy buyer may have other pre-existing conditions as well. The waiting period, as applicable for such other conditions, may be applicable in the policy. Besides, the insurer may reject a policy application on the grounds of a different pre-existing condition, say cancer or diabetes.
Features and Restrictions Known So Far
Here are a few features and restrictions of this newly introduced health insurance product,
- The sum assured options are Rs 4 lakhs and Rs 5 lakhs,
- It will be available as an individual policy and will be reimbursement-based,
- It can be purchased by individuals between the age of 18 and 65, while it can be bought to provide health coverage for newborns and minors too,
- People with 40% disability or above will be eligible for this policy,
- It will cover around 20 disabilities including lack of eyesight or hearing, Parkinson’s disease, cerebral palsy, muscular dystrophy etc.
- Preexisting conditions other than the ones mentioned in the policy fine print will have a waiting period of 48 months,
- The room rent cap is 1% of the sum assured,
- ICU charges will be 2% of the sum assured,
- Cataract treatment has a cap of Rs 40,000,
- The policy will have a 20% copayment clause.
With the introduction of this policy, people with HIV/AIDS will have a fair chance to avail of health coverage. Besides, people with disabilities and mental ailments will be formally included under a customised health cover product.