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Health Insurance Policy

By : brainykey   March 2, 2018

Health Insurance Policy In India


ü  G.S. Paper 2

ü  Health insurance policy in India

ü  Issues related to health insurance and recent Delhi HC ruling


  • Delhi High Court has ruled against an insurance firm that rejected the medi-claim of a person, by stating contractual conditions.
  • The ruling further stressed that discriminatory exemption cluses of insurance polies need to be done away with.

Why the claim was denied by the insurance company?

  • The insurance claim of a person with a rare heart condition was rejected by the United India Insurance Company.
  • This was because the heart condition was due to a genetic disorder, which isn’t covered under the policy.
  • Notably, insurance policies sold to individuals invariably contain a plethora of exclusions in the fine print, which diminishing their practical value.
  • By its very nature, such exclusion defeats the purpose of the health policy and tilt the balance heavily in favour of the insurer firms.

What is the Delhi high court’s ruling?

  • When the case was taken to the Delhi high court, it ruled against the insurance firm, and stated that the rejection of the claim was discriminatory.
  • The court has held that exclusions cannot be unreasonable or based on a broad parameter such as genetic disposition or heritage.
  • The order hence upheld the insurance claim made, and noted that the case can’t be seen merely as a contractual issue.
  • Rather, it has reasoned this as an extention of the ‘right to health’ as derived form the Article 21 (Right to life) in the Constitution.
  • Further, it was noted that ‘right to health’ is meaningful only with the right to health care, and by extension, health insurance required to access it.
  • It also called for the elimination of all other arbitrary exemption clauses in insurance schemes to curtail people’s rights.

How significance is the ruling?

  • This judgement is indeed a significant one and the central government and the Insurance Regulatory and Development Authority (IRDAI), should heed to it.
  • They must review all the policies, and eliminate unreasonable exclusionary clauses designed to avoid claims.
  • Notably, the government has already stated its intent in proceding aheadf with a universal “National Health Protection Scheme”.

What is the current status of Insurance in India?

  • Several studies have pointed out that health insurance in India suffers from lack of scale, and presently covers only about 29% of the households.
  • Even among those within the insurance bracket, the coverage is only limited and the health-care system also lacks regulation of costs.
  • Also, there is an information asymmetry, and the insured member is usually unable to assess the real scope of the policy.
  • These highlight the need for stronger regulations within the health insurance and hospital sectors in India.

What needs to be done?

  • This is a necessity to define costs, curb frauds and empower patients.
  • Insurance law has to be revisited to ensure that there is a guaranteed renewal of policies, and that age is no bar for entry.
  • It needs to be ensured that pre-existing conditions are uniformly covered.
  • State sponsored insurance that is universal in coverage (which is envisioned in the long-term) could help in addressing the problems of exclusion.
  • As a short-term priority, it is important to remove discriminatory clauses in policies and expand coverage to as many people as possible.

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