Reality check for health insurers

The Delhi High Court's recent ruling that insurance companies cannot deny health insurance to those with genetic disorders is important because it removes a widely used ground that excludes large numbers of people from coverage. The ruling conceptually expands the scope of insurance and has welcome practical implications. It said that the right to avail health insurance is an integral part of the right to healthcare and the right to health, as recognised in Article 21 of the Constitution. That is why it held a clause in insurance policies that denied reimbursement of treatment costs for genetic disorders ill-defined, unconstitutional and arbitrary. The court gave the verdict while dismissing an appeal from the public sector United India Insurance Company against a trial court order directing payment of Rs 5 lakh plus interest to a person who suffers from a rare heart disorder. The company had refused to pay, claiming that the disorder was genetic.  

Health insurance should be most inclusive in coverage and least obstructionist in reimbursement. But companies have been found wanting in both respects. Policies exclude older people and many pre-existing diseases. There is a serious problem of lack of clarity and poor definition in the rules and regulations. The court said that  "the exclusionary clause of genetic disorders is too ambiguous and discriminatory", and hence violative of Article 14 of the Constitution. It noted that the term genetic disorder is open to "myriad interpretations'' and this is inimical to public policy. The regulations issued in 2016, which superseded an earlier set of regulations, do not actually mention "genetic disorders" but mentions a  "congenital anomaly", which is different from disorders as such. The ruling is especially important because many lifestyle diseases like diabetes and cardiac problems, which are becoming serious health challenges in the country, may have genetic roots.

The Insurance Regulatory Authority of India (IRDAI) needs to firm up its loose regulations. The definitions are crucial because they make a difference to patients and claimants. The principles that should guide the definitions and formulations should not be exclusionary and discriminatory. The court has underlined their importance by linking health insurance to the constitutional right to life and health. Heath insurance rules and regulations have to develop and mature in India because it is a relatively new area of law. They have to be tested at the level of implementation in cases and through judicial pronouncements, as in this case. The court felt that most health insurance policies are not fair to, and do not favour, the patients. That is why it has stressed the need for an inclusive and rights-based idea of insurance.