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.
