Exclusions Under Health Insurance Policy

Health insurance is essential in order to ease the financial burden that arises due to a medical emergency, surgery, or critical illness. There are many health insurance plans offered by different insurance companies with different add-on covers and benefits. You should opt for the policy that best suits your needs and gives you respite in difficult times, such as the hospitalization of yourself or a loved one due to an untimely injury or illness. At the same time, it is important to know the kind of treatments and health conditions your medical insurance plan does not cover. Understanding these exclusions is crucial to avoid surprises during critical times.

What are Health Insurance exclusions?

Health insurance exclusions refer to the situations, medical conditions, or treatments excluded from your health insurance policy coverage. These exclusions are mentioned in the policy document and highlight the boundaries of what the insurer will and will not cover.

For instance, if a policy excludes cosmetic surgeries, any expenses related to such treatments will not be reimbursed, even if the policyholder files a claim.

Exclusions generally fall into two categories:

1. Permanent exclusions: Conditions or treatments never covered by the policy.
2. Temporary exclusions: Conditions or treatments excluded for a specific period (e.g., pre-existing diseases during the waiting period).

Common Health Insurance exclusions

Below are some of the most common exclusions in health insurance policies:

1. Cosmetic Surgery

A surgery of this kind is not life-threatening or dangerous, thus Liposuction, Botox, or surgeries of a similar kind are not covered under a health insurance policy.

2. Pre-existing Diseases

Now this varies from one insurance provider to the other. Some insurance providers do not provide coverage for high blood pressure and diabetes, while some do. Some insurance companies offer cover for pre-existing diseases if the insured continues with the policy for a considerable period of time such as 12 - 48 months. In the case of some insurers, payment of additional premiums will cover the insured for pre-existing diseases.

3. Pregnancy and Abortion

Medical treatment expenses for pregnancy and abortion are not covered under health insurance. Even if it is a cesarean section or complication due to pregnancy, insurers do not consider pregnancy as a condition to be included in a health insurance plan. Most of the insurance providers do offer financial protection for abortion unless it is crucial in saving the mother’s life. In such an unfortunate instance, the case should be presented post-certification by a medical practitioner to the insurance company. Some companies also provide additional maternity covers. Note that voluntary abortion is not covered under health insurance. 

4. Diagnostics Expenses

Charges incurred to identify the virus or pathological surveillance (blood test, CT Scan) of your body performed at a hospital or a nursing home are not accounted for in a health insurance policy.

5. Miscellaneous Charges

Registration charges, admission fees, and service charges are not considered for claims by a medical insurance plan.

6. Health Supplements

Health tonics and protein shakes, which is not consumed by an individual to counter disease are not included under health insurance. However,  if these supplements are recommended by a medical practitioner as part of treatment while the individual is hospitalized, only then it rightfully falls under an insurance plan.

Why Do Health Insurance Plans Have Exclusions?

Health insurance exclusions are not arbitrary; they serve specific purposes:

1. To Keep Premiums Affordable

By excluding high-risk or non-essential treatments, insurers can offer affordable premiums to a broader customer base. Covering every possible condition or scenario would make health insurance unaffordable.

2. To Reduce Fraudulent Claims

Exclusions act as safeguards against false or inflated claims for non-essential or self-inflicted injuries, ensuring fair play for all policyholders.

3. To Align with Risk Management

Insurers calculate risk based on historical data and trends. Excluding high-risk activities or conditions helps manage financial liabilities.

4. To Focus on Essential Treatments

Exclusions allow insurers to prioritise coverage for essential and widely needed conditions, such as hospitalisation and critical illnesses, rather than niche or cosmetic procedures.

5. To Set Clear Policy Boundaries

Clearly defined exclusions prevent ambiguity and help policyholders understand the scope of their coverage.

How Do Insurance Companies Decide Exclusions in Health Insurance Policy?

Insurance companies set exclusions based on multiple factors, including medical, financial, and regulatory considerations. Here’s how they decide what to exclude:

1. Actuarial Risk Assessment

Actuaries analyse disease prevalence, treatment costs, and claim frequency data to identify high-risk conditions that could financially burden the insurer.

2. Regulatory Guidelines

Regulatory bodies like the Insurance Regulatory and Development Authority of India (IRDAI) provide guidelines for exclusions to ensure standardisation and fairness across policies.

3. Market Trends

Insurers consider trends in customer behaviour, demand for certain coverages, and industry norms to decide on exclusions. For example, policies without maternity benefits cater to younger, single individuals.

4. Cost-Benefit Analysis

Treatments or conditions with a high cost but low probability of occurrence are often excluded to maintain financial viability.

5. Focus on Insurable Risks

Insurers focus on risks that are insurable and measurable. Non-measurable risks, like those associated with substance abuse or experimental treatments, are excluded.

FAQs

1. Can exclusions in a health insurance policy be removed?

Some exclusions, like pre-existing diseases, can be covered after completing the waiting period. Riders or add-ons can also remove certain exclusions, such as maternity coverage.

2. Are exclusions the same across all health insurance policies?

While many exclusions are standard, specific exclusions can vary between insurers and policy types. Always read the policy document carefully.

3. How can I minimise the impact of exclusions?

• Opt for policies with fewer exclusions.
• Use add-ons or riders to extend coverage.
• Choose comprehensive plans with features tailored to your needs.

4. Are alternative treatments like Ayurveda or Homeopathy excluded?

Many insurers now cover alternative treatments recognised by the AYUSH system. However, unproven therapies may still be excluded.

5. What happens if I file a claim for an excluded condition?

Claims for excluded conditions will be rejected. Ensure you understand your policy’s exclusions to avoid such scenarios.

6. What are common exclusions in health insurance policies?

Pre-existing health issues, cosmetic surgeries, self-harm done on purpose, optional medical therapies, and experimental treatments are standard exclusions under any health insurance.

7. Do health insurance policies in India have exclusions for international or foreign individuals?

Yes, insurance policies in India may exclude foreign nationals from their coverage unless they are mentioned and included in the policy.

8. Are there age-related exclusions in medical insurance?

Yes, several health insurance policies have limitations on coverage, especially for older policyholders. People above 60 are thus advised to go for Senior Health Insurance plans, which are better suited for their advanced age and medical conditions.

Conclusion

Exclusions under a health insurance policy are as important as the inclusions. They ensure that policies are affordable and sustainable for larger groups of people while catering to the medical needs of each policyholder. It is advisable to familiarise yourself with things like exclusions at the time of buying the policy. Read the documents carefully and consult the insurer in case of any questions. Remember, by being aware of the nitty-gritty of your insurance, you can ensure that it becomes your safety net when you need it the most.

Disclaimer: The information provided in this blog is for educational and informational purposes only. It is not intended as a substitute for professional advice, diagnosis or treatment. Please consult a certified medical and/or nutrition professional for any questions. Relying on any information provided in this blog is solely at your own risk, and ICICI Lombard is not responsible for any effects or consequences resulting from the use of the information shared.