Sunday, June 7, 2020

Despite IRDAI Advisories in 2016, Persons with Disabilities & other Vulnerable Groups still hankering for Equitable Insurance Covers.

Dear Colleagues,

In 2016 the Insurance Regulatory and Development Authority of India (IRDAI) asked the Insurance Companies to cover all kinds of risks under health policies,  and to provide covers for individuals with special needs, but the Companies are still reluctant and lacking clarity - and as a result the persons with disabilities, people with anxiety and people with HIV have no insurance cover. 

IRDAI has now again asked insurers to be transparent about offering health covers to those with HIV/AIDS, mental health issues and for persons with disabilities, since there is no coverage provided to this segment by the companies.

In compliance of the IRDA notification of 2016, the insurance companies subtly stopped using or simply removed the language related to excluding coverage for those with mental illness, disabilities and HIV to escape the long arm of the law, however, they did not actively start any coverage.

Experience from the field indicates that the Insurers routinely reject covers for differently-abled citing higher risks. For mental health issues and HIV/AIDS, there are hardly any covers available to individual customers.

So far, only national health insurance schemes run by the Govt. partially cover some of these conditions. For example, the 'Niramaya Health Insurance Scheme' by the National Trust covers conditions arising from disabilities, mental retardation, cerebral palsy, autism, and multiple disabilities. 'Ayushman Bharat', which started after the change in regulation brought out by IRDAI, has 17 packages for mental health disorders, which also includes psychoactive substance use and covers ECT (Electroconvulsive therapy), rTMS (Repetitive Transcranial Magnetic Stimulation), MRIs (Magnetic Resonance Imaging) and most of the blood tests.  But sadly, even Ayushman Bharat, does not cover HIV as of today, though there are discussions to include this condition.

Similarly, few popular state health insurance schemes running for nearly a decade like Maharashtra's 'Mahatma Jyotiba Phule Jan Arogya Yojana' or Tamil Nadu's 'Comprehensive Health Insurance Scheme' do not cover these conditions.

Likewise in the private sector, only Star Health Insurance has two plans dealing with the marginalised segments, that too are severely restricted :-
(a)  "India Medi-Classic Insurance Plan" - that covers the HIV positive or AIDS patients. (b) "Indemnity-oriented health insurance policy" - to cover children and young adults (aged 3-25) with autism.
In light of such huge deficit in the insurance coverage, the IDRAI in a notification on June 2, 2020, [link takes you to the website of IRDA], has asked insurers to provide detailed information on their websites stating their underwriting philosophy on covering people with disabilities, HIV/AIDS or mental illnesses. This has to be done by October 1, 2020. However, mere disclosure will not solve issues caused by absence of products.

Access the signed PDF Copy (inaccessible to screen readers)  of the circular Here. Content of the Circular are also pasted below for the purpose of accessibility: 

'CIRCULAR

 Ref: IRDAI/HLT/MISC/CIR/129/06/2020                    Dated:   02nd June, 2020 

To 

All Insurers (Except ECGC and AIC) 

Sub: Disclosure of underwriting philosophy of offering Insurance coverage to Persons with Disability (PWD) and people affected with HIV/AIDS and Mental Illness diseases. 

1.    Reference is drawn to the provisions of IRDAI (Health Insurance) Regulations, 2016 in accordance to which every insurer shall evolve a health insurance underwriting policy covering approach and aspects relating to offering health insurance coverage not only to standard lives but also to substandard lives. Further insurance companies shall also comply with various provisions of HIV and AIDS Prevention and Control Act, 2017 and Mental healthcare Act, 2017. 

2.    Notwithstanding the above provisions, it is considered essential that the targeted population of every insurer shall have complete information on the philosophy that insurers adopt while complying with the above referred provisions. 

3.    In furtherance to above, all Insurers are instructed to publish on their respective websites the underwriting philosophy and approach with regard to offering insurance coverage to the following category of population: 
a.    Persons with Disabilities ( PWD)
b.    Persons affected with HIV /AIDSc.
c.    Persons affected with Mental Illness diseases. 
4.    All Insurers (Life, General and Health Insurers) are here by directed to comply with the aforesaid instruction by 01st October, 2020. 

5.    This has the approval of the competent authority.  

                                                                                   (DVS RAMESH)  


                                                                                   GENERAL MANAGER (H)'

I can recall how the Postal Life Insurance (PLI) justified the extra premium and reduced sum assured to persons with disabilities when it was challenged in W.P.(C) No.10323/2009 titled Vikas Gupta Versus Union of India.  The Hon’ble  Delhi High court in the instant case agreed that charging extra premium from employees with disabilities was indeed a discrimination on the basis of disability and therefore in a remarkable judgement directed the postal life insurance to provide equal insurance coverage and not charge extra premium from the employees with disabilities. Read my earlier discussion dated 22 April 2012 on the subject in the post titled 'Extra Premium or Reduced Insurance Cover, both discriminatory against Disabled - Delhi HC'

Some Experiences from the field 
Mumbai-based software professional Nikhil Deshpande had sought a cover from his health insurance for his anxiety therapy sessions and related medication which costs almost Rs 7,000 per month. He was also hospitalised twice last year. However, the insurer informed him that no cover was available.

The same goes for the differently-abled as well. Pratigya Tiwari from Kolkata who lost her eyesight due to polio at the age of seven in 1998, still does not have a health cover. Reason? All insurers said that she is prone to higher risks and will cause adverse selection.

“I work in an administrative position in a power facility and also travel to work on a daily basis. Especially with the coronavirus pandemic, I am at a loss because if I am hospitalised I do not have any insurance. Why can’t the regulator make it mandatory?” asks Tiwari.

The magic word here is ‘mandatory’. So far, IRDAI has only ‘advised’ companies to offer covers for all types of risks, defined in insurance parlance as ‘standard’ and ‘sub-standard’ lives.

Here, standard lives are regular able-bodied individuals with no ailments whereas substandard are defined as all others. Lack of data to price products is often cited as a reason to reject covers.

While IRDAI had advised insurers to cover all kinds of health requirements, be it HIV/AIDS, cancer or mental health, the truth is that less than 10 percent of the industry is offering covers.

“Whatever few covers are available, they are not adequate in sum assured sizes. Further, the annual premiums are above Rs 20,000 which is not affordable for the masses,” said disability rights' activist Naveen Das.

Das also questioned that when insurers were offering covers for diabetes, blood pressure and even advanced stages of cancer, why not offer covers for all disabilities. When individuals with some sort of physical disabilities function normally without any major concerns, he explained that it is baffling why insurers don’t want to offer covers.

Insurance companies are of the view that certain sections of the society are high-risk depending on their physical and mental well-being. Companies feel that offering an individual cover to such people would lead to a high ratio of claims because a proportion of the high-risk category would require medical intervention at regular intervals.

Insurance works as a pooling concept where premium is put into a common pool and the claims are paid out of it. Underwriting officials believe that insuring individuals who are prone to claim regularly would mean that ‘healthy’ individuals would compensate for premium loss by having to pay a higher annual cost for covers. This argument has been earlier rejected by the Courts as indicated in the ibid judgement of Vikas Gupta Vs. UOI.

An article in MoneyControl.com titled 'Four years on, the differently abled, anxiety and HIV patients have no insurance cover. Is IRDAI doing enough?' suggests that  a better solution would be to have standardised products of health insurance of say Rs 5-7 lakh size with a premium range of Rs 10,000-12,000 for those with special needs. Those seeking a higher cover size could buy a top-up plan by paying a market-linked premium. This will ensure that no individual in India is denied a health insurance cover. With the absence of a standard social security scheme (except for the Pradhan Mantri Jan Arogya Yojana for those below poverty line), there should be more standard medical covers across the spectrum covering those with all types of physical and mental health.

As of now, in the private health insurance space, very few insurers provide coverage for HIV positive/AIDS patients. One of these policies that provide coverage is Star Health Insurance's India Medi-classic Insurance plan. And with regard to disabilities, Star health provides an indemnity-oriented health insurance policy for children and young adults with autism.

Issues that we still need to work on 
However, issues I had raised in my article dated 22 Apr 2012, continue to be relevant and we need to work on these issues. I reiterate the same once again with some improvements:-

(a) The insurance sector still discriminates on the basis of etiology of the disability i.e. causes of disability, whether it is from birth and after birth; neurological or physical and  then rates their lives accordingly,  which in my considered view has again no scientific base.

(b) The persons with neurological disabilities are still not allowed any insurance policy and needs to be challenged.

(c) The ibid Delhi HC judgement in 2012 only adjudicated about  PLI's inactions which is an insurance scheme for the benefit of government employees hence, it covered a very small section of persons with disabilities. Those who are outside the government jobs especially those in rural areas are far away from reaping the benefits of insurance, particularly health insurance. Though the judgement challenges the principles that have so far formed the basis for denying the insurance to the disabled.

(d) The Actuaries who are in the business of assessing the life risks are not aware of the real challenges and the lives of the persons with disabilities and they continue to live in their own world and decide on their own whims, the risk calculation of the life of a person with disabilities. They need to be sensitized and made aware not only about the lives of persons with disabilities but also the rights regime that UNCRPD brings.

(e) The entire literature on insurance that I had to read while pursuing this case from outside, I found it reinforced the stereotypes about persons with disabilities and their proneness to accident! Hence, we need new literature for future actuaries to understand that Disability can not be treated always as a negative health profile and that living with disability was distinct from suffering from a life threatening disease.

(f) There is a need to raise awareness that a person with visual impairment or with hearing impairment or with neurological impairment also enjoys good health like anybody else.

(g) The rules of Insurance sector needs to be changed in light of the 2012 judgement and a few more that came afterwards and applied across the sector. All insurance  issuing companies - be it private or government have to factor in the principles of this judgement and make amends. And this must apply to not just life insurance but also health insurance and other insurance products available in the market and we see a larger role of IRDAI- the insurance regulator in making their advisories mandatory.

Regards
Subhash Chandra Vashishth
Adv

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