Health Insurance for Disabled

Health Insurance for Disabled Persons

The need for suitable health insurance cover has been underscored by the fact that rising inflation has increased healthcare costs. In the absence of sufficient health coverage, facing a medical emergency can increase stress—mentally, physically, and financially.

This is even more critical if an individual is disabled and needs financial coverage for their medical needs. In India, according to the National Statistics Office (NSO), as of December 2018, 2.2% of the Indian population suffers from some form of disability.

Many disabled individuals are physically and financially dependent on their families, making adequate health insurance coverage essential for their medical needs. Let us first understand the different types of disabilities affecting people.

Types of Disabilities

In India, a person must have at least 40% impairment to be considered disabled under the Persons with Disability (Equal Opportunities, Protection of Rights and Full Participation) Act, 1955. Individuals who suffer from more than one kind of disability, or are more than 80% impaired, are referred to as severely disabled. Major types of disabilities are classified as follows:

Congenital Disabilities

Congenital disabilities, also known as birth defects or congenital anomalies, are functional disorders present from birth. While some congenital defects are detected prenatally, in many cases, infants are diagnosed with such defects later in their infancy. Many of these abnormalities are caused by genetic factors, while others stem from socio-economic, demographic, or environmental factors impacting the mother during pregnancy. Many health insurance companies traditionally did not cover congenital defects, as insurance typically covers unknown risks and uncertainties.

However, on February 26, 2018, a Delhi Court ruling emphasized that insurance companies cannot deny health insurance solely based on congenital disorders. Before 2016, all congenital defects were typically excluded. However, after IRDAI's 2016 health insurance regulation, only external and visible congenital defects affecting major body parts are excluded. Genetic disorders that are incurable and present from birth are generally not covered. Each differently-abled person applying for an insurance policy must clearly state the nature of their condition. The insurance company will then assess if the disorder is curable, recurring, etc., and determine the premium and waiting period accordingly.

Accidental Disabilities

Accidental disabilities are those which occur after a person meets with an accident. According to insurance terms, an accident can result in either total, partial, or temporary disabilities, and all these types are covered by health insurance companies in India. Data indicates that a person dies in an accident every four minutes, and a serious road mishap occurs every minute in India, highlighting the importance of accident insurance.

Mental Disabilities

Mental disabilities are conditions that can irreversibly impact a person's mood, thinking, and mental balance. As of 2017, 197.3 million people in India have some kind of mental disorder. Mental healthcare was not typically covered by health insurance until the Mental Healthcare Act was passed in 2017. According to Section 21(4) of the act, "every insurer shall make provision for medical insurance for treatment of mental illness on the same basis as is available for the treatment of physical illness." While some insurance companies now cover mental illnesses, providing adequate coverage can be challenging due to the difficulty in ascertaining the degree of a mental disorder, making it complex to price as a standalone product.

Due to these reasons, insurance companies generally do not provide a specific mental illness plan but do cover mental illnesses in some of their best health insurance plans. Most of these health insurers provide coverage for in-patient hospitalization, and some also cover outpatient hospitalization, therapy, and counseling (if the plan offers OPD benefits). If an individual is seeking mental illness coverage, they should check if their condition requires hospitalization or simple therapy and counseling, and select a plan accordingly. For individuals with pre-existing mental disorders, insurance companies may apply a suitable waiting period before coverage begins. If the risk of morbidity and the severity of the disorder are high, the insurance company may refuse coverage.

How is Eligibility Determined?

State of Health

As with any insurance policy, an individual's health condition is paramount to determine if they suffer from any pre-existing complications. The premium amount is calculated based on the risk determined by an individual's state of health. For differently-abled individuals, the insurance company may review their health condition over the preceding months to assess the extent and degree of risk. Based on this assessment, the company may approve or reject coverage.

Family's Earning Capacity

An insurance policy may be issued based on the earning capacity of the family to which the dependent insured belongs. Many insurance companies consider family income to determine coverage and premium. Based on bank account statements from previous months, the insurance company assesses premium payment capacity and total coverage.

Government Insurance Schemes for the Disabled

1. Niramaya Health Insurance Scheme

   The Niramaya Health Insurance Scheme is a comprehensive insurance plan launched by the National Trust for individuals suffering from disorders such as Cerebral Palsy, Autism, Mental Retardation, and Multiple Disabilities. This scheme is available across India, except for Jammu & Kashmir, and requires no pre-insurance medical tests. All individuals must enroll with the National Trust to avail of this insurance policy.

   Features of the plan:

   Eligibility	Coverage Details
   No age limit (valid disability certificate and enrolment with The National Trust is mandatory)	Coverage: ₹1 Lac Hospitalization expenses limit: ₹70,000 OPD expenses limit: ₹14,500 Ongoing therapy complications: ₹10,000 Alternative Medicine Limit: ₹4,500 Transportation costs: ₹1,000
   Premium	Family income less than ₹15,000: ₹250 Family Income more than ₹15,000: ₹500

2. Swavlamban Health Insurance Scheme

   The Swavlamban Health Insurance Scheme was launched by the Government of India on October 2, 2015, to provide comprehensive coverage to the beneficiary and their family. This tailor-made policy, issued by New India Assurance Company, provides health coverage to individuals with blindness, low vision, leprosy-cured conditions, hearing impairment, locomotor disability, mental retardation, and mental illnesses.

   Features of the plan:

   Eligibility	Details
   Age	18-65 years, with disability certified by the competent authority
   Family Income Limit	Less than ₹3 Lacs per annum
   Coverage	₹2 Lacs
   Premium	₹3,100 p.a. (only 10% collected from the insured)
   People Covered	Disabled person, spouse, and two children
   Documents required	Proposal form Premium Payment Receipt Income certificate Identity Proof

Tax Benefits

When filing income tax returns, individuals can claim deductions either as a disabled person or as individuals supporting disabled dependents. If an individual has a 40%-79% disability, they can claim a deduction of ₹75,000 per year. Individuals with more than 80% disability can claim a deduction of ₹1,25,000.

The deductions for disabled individuals are explained under Section 80DD and 80U of the Income Tax Act, 1961. Under Section 80DD, an individual can claim a deduction for income spent on the medical treatment of dependent disabled individuals in their homes. The individual can also claim a deduction for premiums paid towards a disability insurance policy for their disabled family member. Under Section 80U, a disabled person can claim a tax deduction for their own medical expenses.

To avail these tax benefits, the following documents must be submitted:

• A medical certificate describing the extent and type of disability
• Form 10-IA in case of autism, cerebral palsy, or other multiple disabilities
• Self-declaration certificate of expenses incurred on medical treatment
• Premium payment receipts

Conclusion

Differently-abled individuals have the right to live a life of joy and satisfaction. A suitable health insurance cover can ensure that all the financial and medical needs of these individuals are met.