The struggle to cover pre-existing health conditions in Insurance

41 percent of Indian households have at least one usual member covered under health insurance or any financing scheme.

The struggle to cover pre-existing health conditions in Insurance
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Health Insurance is advanced health coverage for future medical or surgical expenditure by paying a fee called the “premium.” Indian health insurance is covered under various insurance schemes operated by government and private organizations and Standalone Health organizations. The unnoticeable fact is that there is no health insurance scheme which provides coverage for pre-existing conditions. In addition, the lack of universal health insurance mechanisms is the reason for the high out-of-pocket cost of medical care.

I. Introduction

India still has unfinished agendas related to child and maternal mortality and other communicable diseases. Apart from that there is a lack of treatment and care coverage for HIV, Tuberculosis and other health problems (Global Health Observatory: World Health Organization, 2019). In addition, the changes in patterns of health with an increase in non-communicable diseases cause 66 per cent of total deaths in India. Moreover, 22 percent of people are at risk of premature deaths (World Health Organization, 2022). Diseases impose not only levy heavy human costs in terms of suffering and deaths but also heavy financial costs on poor and middle-income households. To save people from catastrophic expenses, health insurance is a bare minimum need. However, only 41 percent of Indian households have at least one usual member covered under health insurance or any financing scheme (National Family Health Survey, 2021).

II.Why lack of Health Insurance?

Health insurance, in particular, is a complex product. Health insurance companies incorporated several clauses and features such as exclusions, waiting periods, deductibles, co-payment, and sub-limits that are difficult to understand.  The unnoticeable fact is none of the health insurance companies provides coverage benefits to pre-existing diseases until 48 months of continuous coverage have elapsed since the inception of the first Policy as per the existing guidelines of the Insurance Regulatory and Development Authority.  IRDA is liable for protection approaches in India.  IRDA states “Pre-existing diseases include Cardiovascular diseases, diabetes, COPD, Cancer, Sleep apnea and many more chronic conditions, ailment or injury for which the Insured Person had signs or symptoms or was diagnosed in the past 2 years before the first Policy issued ("Health Companion Health Insurance Plan, Policy Document – Part II", 2022). Even if the insurance companies that cover pre-existing diseases under Individual Health Insurance cover the individuals with many exclusions, conditions, capping, co-pay etc. Consequently, a large proportion of the country’s population is at risk to bear healthcare expenditures from their own pockets and not from any insurance providers. The decreasing chances of obtaining insurance coverage after a certain illness may not be feasible due to the high insurance premiums associated with the health problem (Sengupta & Rooj, 2019).

III.Limit exclusions for pre-existing conditions  by the above-mentioned insurance providers

a) At present, insurance policies do not cover most chronic or pre-existing conditions. This leaves out large segments of the population who suffer from diseases like Sarcoidosis, hearing disorders, STDs, etc.

b) Applicants suffer/suffer from any health or lifestyle condition, disease, disability; history of a major accident or taking any daily medication declined or offered a policy with exclusion restrictions.

c) The claim of pre-existing diseases can only be settled after 3-4 years of the policy, after which the health plan enrollees may become eligible for coverage.

d) Moreover, there are no rated premiums to cover pre-existing diseases. In addition, if you file a claim for such illness during the waiting period, it would not be accepted.

IV. The rationale for exclusion of pre-existing diseased people

The IRDAI circular stipulates that waiting periods for lifestyle conditions like hypertension, diabetes, and heart disease cannot exceed 90 days unless they are pre-existing and disclosed during the underwriting process. However, most insurance providers exclude these lifestyle diseases from their policy plans.  Some disease such as Sarcoidosis, Neoplasms, Epilepsy, Heart diseases, Stroke, chronic liver diseases, HIV and others comes under the permanent exclusion criteria ("Guidelines on Standardization of Exclusions in Health Insurance Contracts", 2019). The rationale for exclusion of pre-existing disease people in the comprehensive health insurance schemes creates a large gap. There are two key reasons to exclude

1. Lifestyle diseases are associated with various complications;

2. Expenses will be predictably higher, and insurance companies will tend to lose money on these enrollees.

V.Diabetes vs Health Insurance coverage

India’s diabetes population totals 74.2 million and is projected to reach 124.9 million by 2045. About 39.4 million people are still undiagnosed. India has the third highest number of deaths with 0.6 million.  India is among the countries, which spend approximately 20000 INR per person per month with diabetes (20–79 years) (IDF Diabetes Atlas, 2021). The average cost of management of diabetes complications like diabetic foot, retinopathy, cardiovascular disease, renal disease, and patients with two complications was between INR 7,200 to 67,300; equivalent to the estimated claim size of diabetic policyholder was estimated at INR 50,000 i.e. increasing 18% every year. Health insurance for a diabetic patient can decrease a huge economic burden on his family. However, despite India’s large diabetes population, a negligible number of insurance companies mentioned above provide such coverage for diabetes because insurers are reluctant to provide these patients with comprehensive coverage that tackles such costs (Ghosh, S., et al. 2019).

VI.Consider a Lower Cost Option to Address Pre-existing Conditions

While India is going through the transition of getting a high burden of diseases. For many chronic health conditions, costly treatments are excluded from the insurance criteria. Thus, it is necessary to design a health plan by reducing exclusion restrictions, which in turn increase the acceptance of the product. The proposition to minimise complexity is guided by the motive of the limited uptake due to high premiums and covering several diseases/treatments. The modified product should cover all diseases/treatments at the earliest) to increase its attractiveness (Health Insurance for India's Missing Middle, 2021).


Post the Covid-19 experience; this is an opportune time to look at achieving universal health coverage. As we know, high out-of-pocket costs made health services inaccessible to a significant proportion of Indian households. This high cost of treatment often discourages people to avail of treatments even in case of major illness. In this context, the inclusion of pre-existing diseases for all under the ambit of insurance will no doubt contribute to reducing the treatment gap by covering the financial risks that families need to endure.



1.      World Health Organization. (2022). Global Health Observatory: World Health Organization; 2019

2.      World Health Organization. (2022). Non-communicable diseases progress monitor 2022.

3.      International Institute For Population Sciences (IIPS) (2021) National Family Health Survey (NFHS-5), 2019–2021. Vol. I IIPS Mumbai, India.

4.      Health Companion Health Insurance Plan, Policy Document – Part II. (2022).

5.      Sengupta, R., & Rooj, D. (2019). The effect of health insurance on hospitalization: Identification of adverse selection, moral hazard and the vulnerable population in the Indian healthcare market. World Development, 122, 110-129.

6.      Insurance Regulatory and Development Authority of India. (2022). Handbook On Indian Insurance Statisticsf.Y.2020-21.

7.      International Institute for Population Sciences (IIPS) and ICF. (2021). National Family Health Survey (NFHS-5), (2019-20) India: Volume I. Mumbai: IIPS

8.      Guidelines on Standardization of Exclusions in Health Insurance Contracts. (2019).

9.      IDF Diabetes Atlas. 10th ed. (2021).

10.   Ghosh, S., Mukhopadhyay, P., & Bajaj, S. (2019). Diabetes and insurance. Journal of Social Health and Diabetes, 7(02), 50-53.

11.   NITI AAYOG. (2021). Health Insurance for India's Missing Middle.