Understanding permanent exclusions in health insurance disease-wise sub-limits and blacklists

We’ve only just begun here. Here’s an example to explain another kind of line of defence. Imagine your liver is severely damaged and cannot function. 

Your physician has diagnosed you with a severe case of liver cirrhosis. In order to alleviate the situation, you have two options: a surgical procedure or a transplant. Before you file for insurance coverage for the transplant, however, you must determine what caused the liver damage. 

On the rare chance that you get liver cirrhosis with no fault of your own, the more likely explanation could be chronic alcohol misuse. Your drinking habits could have caused this tragedy. Unfortunately, insurance companies do not cover any conditions resulting from substance abuse or alcoholism.

This isn’t just a one-time thing — insurance companies never, ever include transplantation in coverage. Such exclusion is known as ‘permanent exclusions’, so the only way to get the insurer to pay is if your doctor provides a certificate indicating that alcoholism has nothing to do with your condition.

Now, you have to pay for yourself. Permanent exclusions are not applied just during substance abuse. It can be applied to a vast variety, from reasonable ones to those that are quite extreme.

Insurance companies typically exclude permanent cosmetic treatments, such as reimbursing costs associated with fixing misaligned teeth. However, they will pay out if surgery is needed due to an accident, such as breaking your jaw.

Typically, insurance companies look to a simple query when deciding whether or not to cover a particular service —is it medically required, and does it greatly impact your well-being? 

If the answer is negative, it can be difficult for them to agree to the compensation. Though this may appear straightforward, other denials can seem overly severe. 

For instance, insurers often have enduring prohibitions covering any remedy linked with birth defects that are noticeable from birth.

It is imperative to review the permanent exclusions of your policy document before you give it your approval. Here is a sample list to get you started.

But wait, there’s more! The third and fourth lines of defence work to stop mistreatment coming from hospitals. Some hospitals charge customer’s exorbitant costs, especially if they know the insurance company has to foot the bill.

Insurers tend to exclude non-medical costs such as admission fees, administrative costs, television fees (when no TV is present), monitor charges and extra gloves. Some businesses may cover these outgoings for an added fee, but it is typically not offered in the policy.

Most hospitals are generally honest when it comes to their pricing, yet a few may be tempted to inflate the cost of treatment. This could necessitate engaging in questionable behaviour if they were trying to increase their profits.

At the outset, they may go for treatments that are not necessarily suitable solely because they are costlier. Also, they might charge exorbitant amounts for items such as counselling fees, surgical costs and other related services. But insurance companies have taken these into account already.

With this policy in place, the insurer has a “get out of jail card” since they are only obligated to pay for treatments that are both deemed “just and reasonable” as well as accepted by the medical council of India.

Ultimately, if the hospital attempts to deceive the insurer, they may remain fairly unaffected while you are held responsible. Therefore, it is beneficial to seek an alternate opinion when facing expensive medical procedures.

Lastly, some medical centres are operating in an unethical fashion. They may not hold the requisite certification to carry out legitimate procedures, or perhaps it is a well-known fact that they have previously deceived insurers by overcharging and falsely documenting. 

Consequently, most insurers maintain a register of prohibited clinics and should you be treated at one of them, there is a strong chance your claim will be rejected.

This list can be found in your policy document, or you can access an up-to-date version on the organisation’s website.

Do not let yourself be under the impression that an insurance company will always come through for you. As you become more aware of the finer points of exclusions and waiting periods, it makes it easier to manage hospitalisations and the associated paperwork that follows.