IRDA

IRDAI Mandates General Insurers to Cover Mental Illness, HIV and PWDs

The IRDAI has instructed insurance providers to “mandatorily” launch a suitable product that provides health insurance coverage for certain vulnerable groups in society, including people with disabilities (PWD), those afflicted with HIV/AIDS, and people who have a mental illness, immediately.

In its latest circular, IRDAI said any general and stand-alone health Insurer who has been awarded a Certificate of Registration for transacting health and general insurance business should “mandatorily launch and offer their respective product immediately”. It is reiterated that this circular should take effect right now, according to the regulator.

How are disability, mental illness and HIV determined in Health Insurance?

Disability 

Disability is a mental or physical impairment that limits one’s capacity to carry out daily responsibilities in India. A person is deemed disabled if they have a physical disability that is at least 40% severe. However, a person is severely impaired if they exhibit multiple disabilities or have 80% physical impairment.

Equality and non-discrimination of persons with disabilities in Section 3 of the Rights of People with Disabilities Act, 2016, which was passed in 2016, is explained as follows:

1. The relevant government must make sure that people with disabilities have the same access to equality, life with dignity, and respect for their integrity as everyone else.
2. The relevant government must take action to use the abilities of people with disabilities by creating a suitable environment.
3. Unless it can be proven that the act or omission in question is a proportional method of accomplishing a legal objective, no one with a disability may be discriminated against based on their impairment.
4. No one’s personal liberty may be taken away only because of a disability.
5. The relevant government must take the necessary actions to guarantee reasonable accommodation for persons with disabilities.

Categories of disabilities in health insurance

The three main categories of disability in India are as follows:

• Congenital disability – These diseases or disorders present from birth for inherited or environmental reasons. Heart problems, cystic fibrosis, spina bifida, Down’s syndrome, cerebral palsy, etc., are a few typical examples.
• Accidental Disabilities – These situations arise when someone encounters an accident that leaves them with permanent, temporary, or total disability. They include things like amputated limbs, broken arms or legs, arm or leg loss, blindness or deafness, paralysis, etc.
• Mental Disability – A mental illness or sickness that affects a person’s mood, behaviour, thinking, and mental balance is referred to as a mental disability. These include psychiatric conditions like schizophrenia and developmental problems like autism, as well as conditions like depression, bipolar disorder, anxiety, and dementia.

Health insurance options for disabled persons

As we’ve already established, those with impairments have a few health insurance options.

The majority of standard health insurance plans will provide coverage for those with accidental disabilities without any additional exclusions. If they had Personal Accident Coverage prior to the accident, they would have additional financial stability and a set benefit in the event of a disability.

It should be highlighted, though, that those with congenital and mental impairments will fall into the high-risk group and may not be covered by standard health insurance policies or may only receive partial coverage. They can therefore appeal to government schemes for better health protection.

Mental Illness 

The Mental Health Care Act, 2017^[1] section 21(4) states that “Every insurer shall offer provision for health insurance for the treatment of mental illness on the same basis as is provided for the treatment of physical sickness.”

The Mental Healthcare Act 2017 was produced as a result of quick work by the Insurance Regulatory and Development Authority (IRDAI) to include mental health coverage. This law aimed to offer people with such conditions the proper mental healthcare treatment and assistance.

According to the Mental Healthcare Act of 2017, mental illness is “a substantial disorder of thinking, perception, mood, orientation, or memory that grossly impairs judgement, behaviour, or mental conditions associated with the abuse of alcohol and drugs, the ability to meet the ordinary demands of life, capacity to recognise reality, but does not include mental retardation, which is a matter of arrested or incomplete development of mind of a person, especially characterised by sub-normative behaviour.”

Below are some mental illnesses that fall under the list:

• Acute Depression
• Post-Traumatic Stress Disorder
• Anxiety disorders
• Bipolar disorder
• Schizophrenia
• Mood disorder
• Anxiety disorders
• Psychotic disorder
• Obsessive Compulsive Disorders
• Hyperactivity disorder

Mental Health Coverage in India

For a long time, health insurance in India never paid for the costs of treating mental illnesses, including psychiatric problems. The scope of health insurance coverage only covered physical health conditions and illnesses.

Ultimately, on May 29, 2018, the Mental Healthcare Act 2017 was passed, and the IRDAI mandated that all insurance providers must cover mental diseases through health insurance. The insurance industry’s regulatory body has urged insurers to provide health insurance coverage for mental illness and treat it similarly to bodily illnesses. This uniform law was intended to include stress-related illnesses, mental illnesses, and neurological problems in health insurance coverage.

Persons afflicted with HIV/AIDs

HIV/AIDS patients – The Insurance Regulatory and Development Authority of India’s (IRDAI) stance is that HIV-positive patients cannot be denied insurance coverage. Most insurers do not cover people who have HIV and related illnesses since they are viewed as high-risk patients.

According to Section 3 (j) prohibition of discrimination under the HIV and AIDS (Prevention and Control) Act, 2017, “No one may discriminate against the protected person on any ground regarding unfair treatment in or the denial of, the provision of insurance unless justified by actuarial studies”.

However, the insurance companies that provide coverage have the following conditions:

• Those with HIV are eligible for the policy. The coverage will be removed if an individual has an infection after a specific period (generally 90 days) has passed since purchasing the insurance.
• The insurer only pays for tests and medical procedures in the event of AIDS detection; other pre-existing diseases are not covered by health insurance.
• The applicant must have support from the government, an NGO, or organisations that assist persons afflicted with HIV. 
• This means that if a health plan covers HIV, it will not cover any other pre-existing conditions.

Challenges Faced in Providing Health Insurance for HIV/AIDS patients

Health insurance for people with HIV/AIDS faces a number of difficulties. Their impaired immunity makes them susceptible to a variety of diseases. Patients pass away from the illness more quickly when their immune systems are compromised if their bodies are unable to fight infections. Insurance companies still refuse to cover them despite the fact that they can live with the sickness due to the high risks involved. Few people have stepped forward to provide HIV-positive individuals with financial security despite the IRDAI’s instruction to provide some coverage. Much work is still to be done to safeguard persons with weakened immunity financially.

New Circular issued by IRDAI to cover health insurance 

Despite the IRDAI’s instructions to all insurers to provide health insurance for persons with disability, mental illness and persons afflicted with HIV, insurers are not coming forward to implement the same because of high-risk involved. Now IRDAI released a mandatory circular to general and stand-alone health insurers with the certificate of registration to transact the general and health insurance business.

• The attention of the reader is given to the following sections of the Statutes:

1. Section 3 of the Rights of People with Disabilities Act, 2016 
2. Section 21(4) of the Mental Health Care Act (MHCA), 2017
3. Section 3(j) of the HIV AND AIDS (Prevention and Control) ACT, 2017;

• All general and health insurers must provide specific cover for people with disabilities (PWD), people suffering from mental illness, and persons afflicted with HIV/AIDS in light of the aforementioned provisions that have been incorporated into the relevant Acts and with the aim of providing a suitable product with health insurance coverage for some vulnerable groups in society. A model outlining the minimum parameters and scope for the product’s design is enclosed. In other words, insurers may widen the product’s scope, but under no circumstances the scope of the product be narrowed down.

• The insurers are instructed to implement an underwriting policy authorised by the Board and ensure that no applications from the categories mentioned above of the population will be rejected due to the aforementioned illnesses and disabilities.

• The insurers may choose the product’s pricing as long as they adhere to the standard outlines in the Insurance Regulatory and Development Authority of India (Health Insurance) Regulations, 2016 and any guidelines or circulars that were made in response.

• The policy tenure for the product shall be for a duration of one year, renewed in accordance with the already established regulatory structure.

• The Standard Product must adhere to all the requirements of the IRDAI (Health Insurance) Regulations, 2016, as well as any other applicable laws and guidelines that may have changed since then.

• Every general and stand-alone health insurer with a Certificate of Registration to transact Health and General Insurance Business must start and provide their respective product immediately.

• It is reiterated that this circular will take effect immediately.

Conclusion

IRDAI was established to facilitate the quick and orderly expansion of the insurance sector, including annuity and superannuation payments for the commoner’s benefit and to provide long-term finances for the economy’s rapid expansion. The IRDAI believes that insurance providers would take decisive action by issuing the new regulation to provide comprehensive coverage and meet the nation’s rising demand.

Also Read: Healthcare Services under GST: A Complete Analysis