Free condoms are seen outside the meeting rooms at the 4th International Aids Society Conference, in Sydney, Australia. (Source: Jack Atley/Bloomberg News)

Indian Insurers Uncertain Of Pricing As Regulator Makes HIV/AIDS Cover Compulsory

Insurers say pricing HIV/AIDS insurance will be a challenge till there’s enough historical data after the regulator made such covers compulsory in India, the nation with the world’s third-highest HIV burden.

The Insurance Regulatory and Development Authority of India, in compliance with the HIV and AIDS (Prevention and Control) Act 2017, had directed insurers on Oct. 10 to not deny insurance to such patients “unless supported by actuarial studies”.

“Insurers must cover the condition either under comprehensive health plans or design separate products for patients suffering from it,” said Subhash Chandra Khuntia, IRDAI chairman. The premium calculation will depend on actuarial assessment and data analysis by the insurers, he said.

Nearly 21.4 lakh people in India were infected with HIV and AIDS in 2017—the third highest in the world after South Africa and Nigeria, according to the latest data from United Nations Programme on HIV/AIDS and National Aids Control Organisation. Over 40 percent of the patients didn’t have access to antiretroviral therapy, according to UNAIDS.

So far, the condition was excluded from all health insurance plans in the Indian market, barring a group policy by Star Health and Allied Insurance. The policy covers nominated members of non-governmental organisations, government agencies and registered societies involved in the care and treatment of the human immunodeficiency virus infection and acquired immune deficiency syndrome.

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“It’s a step towards removing any illegal discrimination against HIV/AIDS patients by agencies providing health insurance,” Alok Saxena, joint secretary at National Aids Control Organisation, told BloombergQuint over the phone. “Availability of insurance would ensure greater access to private healthcare for extended care and treatment of infections caused due to low immunity in the patients.”

But pricing remains a challenge. And that may be due to lack of data and experience, said Ashish Mehrotra, managing director and chief executive officer at Max Bupa Health Insurance Company. “Experience from international markets and reinsurers would have to be used to decide the premium rates.”

Anurag Rastogi, head of retail underwriting and claims at HDFC ERGO General Insurance Company Ltd., agreed. “We’re analysing past actuarial studies for guidance on the additional premium charged by global insurers for covering the condition and the medical expenses its treatment entails.”

Mehrotra—while pointing out that patients suffering from HIV/AIDS are entitled to free diagnostics and treatment at government hospitals—said it takes between 7-10 years for HIV to progress into AIDS. “Since health insurance policies are renewable for life, the long-term impact of covering HIV patients is critical.”

What Insurance Firms Agree On

Insurers agree that those covered under existing health insurance plans will also be covered for HIV/AIDS only if the condition was detected during the insurance period.

“If an insured person gets diagnosed with HIV/AIDS, then that person will be covered under the basic health cover,” said Sanjay Datta, chief of underwriting and claims at ICICI Lombard General Insurance Company. “A separate optional cover must be designed for those who declare themselves HIV-positive, the premium for which would be higher than basic health plan.”

Datta said that if someone with an ICICI Lombard health insurance policy seeks cover for HIV/AIDS upon policy renewal, they will get coverage under the same plan.

Rastogi of HDFC ERGO General Insurance concurred. “We will monitor our claims’ experience for a year before we revise premium for basic health plans,” he said. “Until then, those already covered under our policies can make a claim if detected with HIV/AIDS during the validity of the policy.”

“We’re designing a policy around that (HIV/AIDS) and will decide based on the the stage of immuno-deficiency and the recurrent need for hospitalisation of a patient, whether he/she can be insured or not,” Rastogi said. The premium for such policies, he said, will be higher than the basic health cover as is the case with insurance policies for other critical illnesses such as cancer and heart ailments. “The exact premium for such policies can’t be determined at this stage.”

The extent of cover, according to Mehrotra, would increase as companies gain experience. “Once companies are able to gather sufficient experience, the products would move towards benefits related to preventive health through combination of lifestyle changes, nutrition, medication, regular doctor visits and health checks.”

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