IRDAI makes specific health insurance cover mandatory for persons with disabilities, mental illness, HIV; here's what it means for insurers

Now people even with high-risk conditions can buy a health insurance policy, as the insurance regulator has asked companies to launch a specific product covering persons with disabilities, mental illness or those who are HIV positive. 

It is a significant step by the Insurance Regulatory and Development Authority of India (IRDAI) as now non-life insurance companies have to introduce health covers immediately that cater to these individuals. However, experts say, a lack of proper data for the purpose of pricing can be a challenge initially. The regulator has also provided a model policy setting out the minimum scope and parameters for product design.

“The circular issued by the Authority supports the inclusion of persons with disabilities, those afflicted with HIV/ AIDS, and those with mental illness. It would encourage providers to evaluate and develop an appropriate product for the vulnerable section of society. We are evaluating to construct a suitable cover for this special segment. Although the lack of proper data for the purpose of pricing is a challenge but it is not insurmountable. We look forward to serving the need to the best possible extent,” said Sharad Mathur, MD and CEO, Universal Sompo General Insurance.

Abhishek Poddar, CEO and Co–Founder, Plum agrees: “This regulatory change is important for several reasons. First, it addresses a significant gap in the insurance industry where people with disabilities, mental illness, or HIV were often excluded from obtaining health insurance. This left these individuals vulnerable to financial and health risks, making it difficult for them to access essential healthcare services. By requiring insurers to design covers for these individuals, the IRDAI is promoting inclusion and ensuring that everyone has access to essential health services."

According to Poddar, having health insurance for persons with disabilities, mental illness, or HIV is essential to ensure that they receive appropriate care and treatment.  "The cost of healthcare services can be prohibitive, and having health insurance can significantly ease the financial burden of accessing healthcare services. With these new policies in place, individuals with disabilities, mental illness, or HIV can be assured that they will receive the care and treatment they need without worrying about the financial burden," he added.

IRDAI introduced a slew of measures to increase the scope of health insurance policies from October 2020 onwards. The scope of coverage was expanded to include health conditions, such as age-related macular degeneration, HIV, Alzheimer’s, mental illnesses, internal congenital and genetic diseases.

IRDAI also instructed all the insurers last year in March to publish on their respective websites the aspects of the underwriting philosophy of offering insurance coverage to Persons with Disability, people affected with HIV/AIDS and mental illness diseases and transgender persons. The regulator stated that the move would help people to have complete information on the philosophy that insurers adopt in this regard.

“It is important for all insurers to have health insurance product covers for these individuals to address the significant gap in the insurance industry and ensure that vulnerable individuals can access the care and treatment they need. This is not just a regulatory change; it is an opportunity for insurers to demonstrate their commitment to inclusion, diversity, and social responsibility,” said Poddar. 

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