Insurance plan for diabetics: A costly, bitter pill to swallow

Diabetes is a medical condition in which the body cannot produce enough insulin to control the amount of sugar in the blood. The ICMR report states that more than 101 million Indians aged 20 and above are estimated to be already living with diabetes, constituting 11.4% of the population. Another 136 million (15.3%) are pre-diabetic, with sugar levels higher than the normal range but not high enough to qualify as diabetes.

Diabetics are prone to cardiovascular diseases, kidney ailments, neuropathy (a condition that affects the nerves), and blindness, among others. Gautam Chopra, co-founder and CEO of BeatO, a digital health platform for chronic condition management, cites the Chennai Urban Rural Epidemiology Study (CURES) on the high prevalence of coronary artery disease (CAD), neuropathy, retinopathy, peripheral vascular disease (reduced circulation of blood to a body part) and nephropathy—21.4%, 26.1%, 17.6%, 6.3% and 2.2%, respectively— among diabetics in the country.

Chopra says these complications often lead to in-patient hospitalization (IPD) of diabetics that can cost them several lakhs of rupees. A single episode of hospitalisation can easily make such patients poorer by ₹5-10 lakh.

Even regular daily treatments are very expensive. Prashanth Manikananda (49) from Thalakkad, Kerala, has been suffering from type 1 diabetes—a chronic condition in which the pancreas produces little or no insulin—for many years now. He takes insulin injections thrice a day and that costs him ₹4,200 a month, or a whopping ₹50,400 a year. Manikananda has registered with BeatO, which helps him manage his diabetes daily via in-app doctor consultations and health coaches. It is an additional expense of ₹6,000 annually.

According to Dr M.P. Mishra, professor & head, department of pathology at Naraina Medical College & Research Centre in Kanpur, the out-patient department (OPD) expenses in a hospital for diabetics could be even higher. “People suffering from type 1 or type 2 diabetes may have to spend ₹5,000-15,000 a month on medication, including insulin injections, alone. However, this is in cases where there are no complications. Else, the expenses will be higher," he says.

 

 

With the costs of medication and hospitalization on the rise over the years, experts say it is better for diabetics to have a good insurance policy in place. While regular insurance policies in India cover diabetes-related complications with a waiting period of 2-4 years, that doesn’t include OPD expenses. Moreover, insurers are wary of policy proposals from diabetic patients. “The average hbA1c (a type of blood test to monitor sugar levels) reading in diabetics is 7-8%. Insurers tend to cover those with a level that is less than 7%. Even if they do cover others, the premium could easily be 50-60% higher," says Chopra.

To be sure, a few insurers have curated diabetic-specific plans to cater to this segment. Such plans could be expensive but often come with a reduced waiting period and disease management programmes.

Diabetic-specific plans

Ajay Tripathi, a 35-year-old from Nashik who has had type 2 diabetes since the age of 28, pays ₹13,000 annual premium for a ₹5 lakh policy cover. His policy includes Day 1 coverage for diabetes—there is no waiting period for any related complications. Other illnesses, though, have a waiting period of three years.

Kapil Mehta, co-founder, Secure Now, says diabetes plans are expensive. The solution to this is to buy such a policy and work alongside to improve your health and reduce the extent of diabetes. “If that happens. then you would be eligible for regular mediclaim policies," says Mehta.

Some insurers also offer wellness benefits if a diabetic maintains good health. This is an effective way to avail discounts on renewal premium. Jatin Patel, a resident of Ahmedabad, said he ported his family floater health insurance policy from a government insurer to Aditya Birla Health Insurance. His wife was diabetic but she was able to bring down her blood sugar to manageable levels. The couple also got a 100% discount on premium renewal by meeting certain health parameters, including walking 10,000 steps daily for at least 13 days in a month and 325 days in a year.

“We provide diabetics with Day 1 coverage to manage their chronic condition and provide access to specialized health coaches (doctors) for guidance. Our chronic disease management program motivates people to stay active with 100% HealthReturns and expert guidance to get their health back on track," says Mayank Bathwal, CEO, Aditya Birla Health Insurance. The firm’s diabetic-specific plan includes OPD benefits of around ₹2,250 a year.

Manipal Signa and Niva Bupa’s diabetic specific plans also offer discounts of 15-20% on renewal premium. But, these plans don’t have OPD benefits.

Do note that diabetic specific plans may have co-payment or disease-specific limits on treatment cost covered under insurance.

Star Health has two variants of its Diabetes Safe Insurance Policy. Plan A requires you to go for mandatory pre-insurance medical test and has a lower premium. The pre-screening is not mandatory for Plan B. “We encourage people to go for Plan A with pre-policy medical evaluation as this provides a day 1 coverage for diabetes and also has a lower premium. The cost of the pre-acceptance medical tests is borne by us. Plan B, however, comes with a waiting period of one year," says Dr Madhumathi Ramakrishnan, executive vice president at Star Health and Allied Insurance. The insurer recorded a growth of 5% (from 585,000 policies in FY22 to 615,000 policies in FY23) in the number of fresh and renewed diabetic plans(both plan A & B) and other retail policies where diabetes is declared as a pre-existing disease.

The right cover

Is a healthcare fund better than an insurance policy? Such a fund can only support additional medical expenses but will not suffice in case of hospitalization. For example, if you were to invest ₹20,000 a month for one year, your healthcare fund will fetch you around ₹2.5 lakh at a conservative 6% interest. But, a ₹20,000 annual premium can get you a policy cover of ₹10 lakh.

As for the different types of insurance policies for diabetics, Siddharth Singhal, business head- health insurance at Policybazaar, says : “There are three categories of diabetics. The mild-to-moderate (hb1Ac level less than 7-8%) don’t face any problems in getting an insurance policy. They should go for a regular comprehensive policy and pay 15-20% extra premium to reduce the waiting period," he says. In case their diabetes worsens, they can switch to diabetic specific plans.

For those with moderate to severe diabetes (hb1Ac level between 8-10%), the diabetic specific plans are better. “This segment will have to produce the latest medical reports to get the policy. Obviously, the premiums will tend to be higher," he says.

The third category of severely high diabetics (hb1Ac level higher than 10) many not even get the diabetic-specific policies. "Some plans are available in the market with diabetes as a permanent exclusion but cover accidental and other non-diabetic ailments. This may not be the best plan but it is better than having no cover at all," he says.

Mint take

The insurance coverage for diabetics has indeed improved with the specific plans, but these policies have shortcomings. For instance, the OPD benefits in such policies are a pittance. Also, there is a need to reduce the premium for this segment of the population.