Health Insurance and Aids in India - A Narrow path leading nowhere!

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Aids and Health Insurance in India

A staggering 25 Million.

That's the figure quoted by experts, for the number of Indians who will be afflicted by AIDS in the current year. Considering the 2.3 million in the year 2007 it is indeed a sharp rise, which horrifyingly will go on to increase in the near future, given the stigma and shame attached to the disease in India, as well as high medical costs that make treatment a remote possibility for the majority afflicted who cannot afford it!

Considering the role Health Insurance plays in making health care affordable to the general public, AIDS being included in the list of permanent exclusions by Health Insurance Companies makes it rather painful.

The case of AIDS v/s Health Insurance in India  

So why this Exclusion of AIDS from the coverage under health insurance

Delving deeper into the reasons as to why this exclusion of AIDS from the coverage under Health insurance, leads us back to a very old thought process that still exists in India, that of AIDS being contracted only due to illicit sexual relations. Sudhir Sarnobat, Founder of Medimanage Insurance Broking Pvt Ltd. explains the thought process stating that “When AIDS as a disease was first identified, the genesis of the disease was identified as illicit sexual act which in insurance terms comes under the term ‘Moral Hazard’, meaning a disease contracted by virtue of an illicit act by the person himself and hence AIDS became an exclusion”.

However with ongoing research on AIDS still not able to come up with a complete cure, treatment is relegated to simply delaying the inevitable for patients and not a cure, which makes for another strong point in favour of AIDS in the case of AIDS vs Health Insurance in India. However it wouldn’t be fair to blame the Health Insurance Industry for ‘neglecting’ AIDS. According to the insurance policy terms, the main criteria set for a claim to be payable are that 1) there has to be hospitalization and 2) the treatment should be a definitive and curative one and since both of these criteria are not met by any line of treatment for AIDS, it might continue to remain as an exclusion.

What this means for the population suffering from AIDS is an indefinitely ‘long wait’ till cure for AIDS is ultimately found, following which the health insurance industry could probably draft health insurance schemes for the same.

With the constant rise in the number of AIDS cases, why aren’t we seeing an initiative from the Govt. to cover the 2 million + plus population who are living with AIDS

World Bank states that the Indian Government’s spending on AIDS is just 5% of its total $5.4 Billion budget on health care. This will soon start falling short, what with the AIDS cases being alarmingly on the rise in India. A question that is bound to arise in everyone’s mind is ‘Why isn’t the Govt. taking any initiative to come up with an AIDS specific health care scheme for the poor?’

Health Insurance in India is not yet geared to come up with an AIDS specific mediclaim policy

“According to the Indian Government’s data base, over 36 million people do not have access to even primary health care. And given India’s total population of 1.2 Billon, the 2 million odd number of AIDS cases does not even figure in the priority list for the health ministry” states K.S.Sankar, corporate member of Medimanage Health Insurance Pvt. Ltd., throwing ample light on the woes of the Indian governments health care plans.

Plus with perceptions and awareness regarding the need for health Insurance being quite low in India, a fact highlighted by the dismal figure of only 9.8 % of the total population opting to buy health insurance, the idea of an AIDS specific health insurance scheme by the govt. in the near future does not seem quite probable.

Moreover with 42.5% of the 2 million+ AIDS affected population belonging to the BPL category - who simply cannot afford health insurance, it nullifies the effectiveness of the any such health insurance scheme, even if it were to be launched. This one fact alone can do mighty well to explain the government’s reluctance in launching an AIDS specific health Insurance Scheme. 

Is there any hope for the AIDS afflicted?

Is there a consensus with the thought process of getting the IRDA to regulate the list of exclusions, so as to pave a way for AIDS to get covered under health Insurance in India?

The Insurance Regulatory and Development Authority (IRDA) primarily functions as a regulating body for the Health Insurance Industry, wherein technically its job is to protect the policy holders’ interest and issue directives necessary for the same. “There is a faint chance of the social cause behind AIDS propelling the IRDA to issue directives to Insurance companies to devise cover for AIDS. This is not something such as making sure that a minimum percentage of the Insurance company’s premium comes from the rural areas and so on, so as to ensure that the rural population gets the benefit of insurance” states K.S.Sankar, implying that even assuming the IRDA intervenes it wouldn’t by default amount to much of a difference in Health Insurance Industry’s stand towards AIDS.

In the very same vein of thought, Sudhir Sarnobat states that one cannot expect the IRDA, which is primarily formed to look after the insured persons’ interests to add directives that would push for a health insurance cover for AIDS when almost half of the afflicted population is found to be living below the poverty line. “I feel that coming out with a health insurance scheme for AIDS isn’t feasible at this point of time as most of those who are afflicted fall under the BPL and it doesn’t bode well for the health Insurance Industry from the overall premium perspective. Plus given the market’s maturity level in the current scenario, directives issued by the IRDA won’t account to much in regards with insurance coverage for AIDS”

Suggesting a possible alternative route, he adds that “I would rather expect the government to use the tax benefit angle (better tax benefit) for donations to NGOs working in AIDS domain & thus route more funds which would have better utilization”

The Verdict

The verdict in this case is rather grim for those afflicted with AIDS in India.

Health Insurance and AIDS in India

The moral hazard angle is strong, which makes it almost impossible for AIDS to get a Government backed health insurance scheme at least in the near future, in spite of other reasons for the spread of AIDS being identified.  Plus that a majority of AIDS patients belong to the BPL category also poses huge problems for the health Insurance Industry from the premium affordability perspective to launch an AIDS specific health insurance scheme. 

Somehow one can’t help but think that, what really lies at the base of this whole AIDS vs health insurance saga, is the fact that AIDS goes without a health insurance cover in India more than anything else due to the poor social interpretation of AIDS, along with AIDS being more a problem of the poor! As Sudhir Sarnobat puts it, “I think it’s more to do with the stigma AIDS carries with it that has made it very difficult for India to look at AIDS with changed mindset”. Says it all, we guess!

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