We maintain a hypocritical attitude to sex despite being the
second-most populous country (and on course to being the first).
Whilst this attitude has its fallout primarily in cultural and
social arena such as films, drama, music, television and
advertisements, etc, it also has an impact on our financial
lives.
One such significant impact is on the health insurance industry. As
per our research, every single non-group mediclaim policy issued in
this country permanently excludes any hospitalisation expenses
caused due to sexually transmitted diseases including AIDS
(although AIDS can be caused by myriad factors other than
unprotected sex, in the popular Indian psyche, it is the sexual
motif that dominates). It does not matter for how many years you
have been renewing the policy.
Even if you have been a loyal customer of the insurance company for
10 years (and have not made any claims) and contract HIV in the
eleventh year for the first time, you will still not be covered for
any hospitalisation expenses incurred due to this.
Of course, to be fair to the insurance companies, there are valid
reasons for the exclusions of HIV/AIDS.
HIV/AIDS as a disease is relatively new at around 25-30 years and
there is still no certified cure for it. Besides, the expenses
required for treatment and the eventual outcome are uncertain. The
insurance industry depends on statistics about how many people get
affected by the disease as well as the average cost of treating
such a disease and the outcomes thereof to be able to price its
product appropriately. Since no reliable data is available on this,
it is excluded from the scope of coverage to avoid making the cost
prohibitive.
In fact, one of the insurance companies we spoke to while doing
research on this subject gave the interesting example of diabetes
and its coverage in health insurance plans in western
countries:
Pre-1950s: no treatment for diabetes; not
insurable;
1960 to early 70s: treatment protocols established;
outcomes uncertain; insurance expensive; and
Mid to late 1970s onwards: treatment improved;
compliance good; outcomes more predictable, insurance
affordable.
Going by that example, we should be ready to move to at least the
second stage where at least expensive insurance is available. As
per a newspaper report, the labour ministry is reportedly gathering
data on this before approaching the insurance Regulatory and
Development Authority (IRDA) to request them for some regulation in
this regard.
Since HIV/AIDS is such a big issue, the government would do well to
create some kind of a common re-insurance pool just like it has
done for terrorism cover, without which the cost of covering this
risk is likely to be prohibitive. Hopefully, some portion of the
government funds being spent on fighting this scourge will see its
way to the creation of such a pool.
Meanwhile, the insurance industry is doing its bit by launching low
value group schemes targeted at the most vulnerable sections of the
society through a network of NGOs. PSI, an NGO, has done pioneering
work in this regard. With Star Health, it has launched the Star
Health HIV Care Policy, which provides some relief (Rs 15,000 per
annum) towards hospitalisation expenses as well as a one-time
benefit of Rs 15,000 when the disease becomes full-blown AIDS.
"Star Health already had a HIV care product but it was not being
taken up well. We worked extensively with them to provide on the
ground data to fine-tune the programme as well as to roll it out,"
says Ravi Subbiah, director of PSI. Another NGO, Project Concern
International, has also launched an innovative mutual insurance
programme for HIV Positive persons called Jeevodhyam. These are
baby steps (very welcome ones though) in the right direction, but
can hardly dent the huge problem that we are increasingly being
faced with.
However, when we checked on the reasons for the permanent exclusion
of other sexually transmitted diseases, the reasons for their
exclusion are less clear. Statistical data on these diseases is
widely available and treatment protocols and outcomes are
reasonably reliable like any other non-sexually transmitted
diseases.
Most insurance companies we spoke to told us this is possibly just
a hangover from the original mediclaim document that has been
around for around 20-plus years now. This document was framed in a
different era when sexually transmitted diseases were seen as
immoral and hence anybody getting hospitalised due to them deserved
not to be covered for the expenses (or maybe it was very expensive
at that time to treat other sexually transmitted diseases).
In the current day and age, clearly, this is a fit subject on which
IRDA regulations would be welcome. It would be fitting if we could
have regulations on the entire subject of permanent exclusions
(those that will not be covered irrespective of how long you have
been insured) with standard permanent exclusions such as congenital
defects, cosmetic or obesity treatments and non-allopathic
treatments allowed under the regulations. If any insurance company
wishes to expand the list, it should be allowed to do so as long as
an easily understandable communication is made to a prospective
consumer and his prior informed assent obtained.
In fact, IRDA has been very pro-active and with its recent circular
of March 31, 2009 has laid down several welcome measures to bring
in transparency in the health insurance sector. So the chances of
regulations in this vital area of permanent exclusions are also
good. Whilst this may lead to an increase in premiums in the near
term, it will reinforce the consumer's faith in the insurance
policy and bring more customers in the health insurance net. Prices
will also stabilise once the insurance companies get some claim
experience. An example is the steep fall in term insurance prices
(presumably due to the low claims experience).
Hopefully proactive regulation by IRDA will make the health
insurance industry so big that one day further improvements in
health insurance sector will be a major national election issue.
Can you imagine a debate between the spokespersons of different
political parties --- say the BJP and Congress --- on their plans
for the health insurance industry, on prime time national TV? Let
us all look forward to that day.
The writer is CEO of ApnaInsurance, a price comparison site that
allows consumers in India to compare the premiums and features of
life insurance as well as general insurance policies such as health
insurance, car insurance and travel insurance.
