The Supreme Court to the rescue of senior citizens

Elderly can't be denied medical insurance: SC
23 May 2008, 0117 hrs IST,Dhananjay Mahapatra,TNN

NEW DELHI: The Supreme Court has come to the rescue of senior citizens who are often refused renewal of their mediclaim policies even by public sector insurance firms only because they need frequent hospitalization which leads to higher reimbursement claims.

The court has frowned upon the practice of insurance companies seeking hefty increases in the renewal premium - a clear disincentive for elderly policy holders - as also the insistence on excluding cover for a particular ailment for which hospitalization is required.

The court asked public sector insurance companies not to follow their private sector counterparts in heartlessly turning down requests for renewal of mediclaim policies just because their clients had to be hospitalized.

The Centre, through solicitor general G E Vahanvati, argued that the insurance sector had been opened up and such conditions relating to societal obligations on the public sector players alone would put them in a position of disadvantage vis-a-vis private players.

Differentiating between public-sector and private insurance companies, a bench comprising Justices S B Sinha and V S Sirpurkar said the action of government-supported companies, which could be classified as "state", must be fair and reasonable even in cases of renewal of mediclaim policies.

Observing that it would be unfair on the part of public sector insurance companies to deny senior citizens their rights to hold a mediclaim policy, the court also took a dig at the government’s catchy ‘‘Health for All’’ policy and the abysmal ground realities.

"On one hand, we cannot forget the new market economy and the foreign direct investment, but on the other,
we also cannot shut our eyes to the ground realities. There is a huge gap between the high-sounding words of the government and the realities on the ground," said Justice Sinha, writing the judgment for the bench.

The court agreed with the solicitor general that onerous conditions could not be binding on one player, disadvantaging it in a free market economy, but at the same time, it refused to compromise on its view that PSUs had to share the social commitment objectives propagated by the government.

Anguished at the prevalent practices relating to renewal of mediclaim policies, the court asked the regulatory body, Insurance Regulatory and Development Authority, to lay down clear guidelines that would be applicable to all players - public sector companies as well as private ones.

Three senior citizens had moved the Gujarat HC against the arbitrary refusal of public sector insurance companies to renew their mediclaim policies even though they had paid the renewal premium. The HC had ruled in their favour. The insurance companies challenged the verdict in the SC.

In the first case, an old man had to undergo angioplasty twice in three years. Though the expenses were reimbursed, the insurance company demanded 300% increase in the premium. When the insured agreed to this and paid the money, the company wanted to exclude heart ailments from his insurance cover.

In the second case, a neurologist, practising since 1961, was also subjected to similar treatment and told that his mediclaim policy would be renewed only if the ailment, which was requiring frequent hospitalization, was excluded from the policy. In the third case, the policy was abruptly cancelled and the insurer was asked to take a policy from another company.

(dhananjay.mahapatra@timesgroup.com)