The Delhi High Court last month ruled that insurance policies could not exclude genetic disorders, raising hope that insurance companies will not be able to discriminate against people with genetic disorders. However, a close reading of the judgment reveals that even though the court grants that the right to health insurance is a part of the fundamental right to life, it has left the door open for insurance companies to exclude coverage for certain genetic disorders like Huntington’s disease and Down’s syndrome.
In a judgment that contradicts itself, the court has implied that insurance companies cannot discriminate against their clients based on genetic heritage or disposition, but can ask for higher premiums or deny claim if a genetic disorder has been established by appropriate medical testing.
The court was settling a dispute between United India Insurance and Jai Prakash Tayal, who suffers from a rare disease called hypertrophic obstructive cardiomyopathy, in which a portion of the heart thickens for no obvious reasons. In 2004 and 2006, the insurance company had made reimbursements to the patient for medical procedures related to his condition. However, in 2011, it rejected his claims on the grounds that genetic disorders were not covered by the insurance policy. The exclusion regarding genetic disorders was inserted into the insurance policy at the time of renewal. When the claim form in 2011 was filled in by the doctor, he responded in the affirmative to the question asking if the medical condition was a genetic disorder. The insurance company denied the claim, leading to a lawsuit.
The trial court ruled in favour of the patient on the grounds that the insurance company could not change the terms of a medical policy at the time of renewal and that there could not be a discriminatory clause against persons suffering from genetic disorders. The insurance company was ordered by the trial court to pay the defendant a sum of Rs 5 lakh along with interest at 8% per annum. The insurance company then appealed the decision to the Delhi High Court, which pronounced its judgment on February 26.
Fundamental rights and genetic disorders
The Delhi High Court could have disposed of the case by pointing to the fairly well accepted proposition of law that insurance companies were prohibited from introducing new exclusions at the time of policy renewals. If a person has taken an insurance policy and then develops a chronic disease, it is not permissible for an insurance company to exclude such a disease from the purview of the policy at the time of renewal. If that the case, nobody would ever be able to claim reimbursement from an insurance company. The mere fact that the insurance company had included this prohibition against genetic disorders during the course of a renewal was enough reason for the court to dismiss the appeal filed by the insurance company.
The court however chose to wade into the issue of constitutional law, fundamental rights and genetic disorders and, in the process, ended up contradicting itself.
The court made the lofty assertion that it is unconstitutional and discriminatory to bar coverage for persons with genetic disorders. Referring to constitutional precedents, the court states in pertinent part, the following:
“Thus, Right to Healthcare is a part of Right to Life. Medical care and health facilities are part of Right to Healthcare. With spiralling medical costs, health insurance has to be an integral part of medical care and health facilities. Thus, healthcare without health insurance is a challenge. The individual’s right to avail of health insurance is an inalienable part of the Right to Healthcare. Health insurance with the exclusion of ‘genetic disorders’ hits at the basic right of an individual to avail of insurance for prevention, diagnosis, management and cure of diseases. Excluding any particular category of individuals i.e., those with genetic disorders, from obtaining health insurance or having their claims honoured, based on genetic disposition would be per se discriminatory and violative of the citizen’s Right to Health.”
Building on this proposition, the court then declared that broad categorisation and exclusion of genetic disorders would be arbitrary and unreasonable and hence prohibited by the constitution. The court states in pertinent part:
“A broad categorisation and exclusion of genetic disorders of every and all kind would lead to enormous discretion in the hands of the insurance company to reject genuine claims. The ambiguity and the uncertainty of the precise definition of genetic disorders makes the exclusion too broad. Firstly, exclusion of genetic disorders by itself would be unconstitutional and the broad unqualified exclusion would not stand the test of non-arbitrariness and unreasonableness.”
It then proceeds to qualify this assertion in the very next paragraph, when it allows insurance companies to discriminate against patients with genetic disorders like Huntington’s disease, Down’s syndrome etc. The court states:
“There has been enormous thought, which has gone into such exclusions in most jurisdictions. Pure genetic disorders such as Huntington’s disease, Down’s syndrome, etc., can be treated differently in insurance policies. However, exclusion of the entire gamut of disorders which are speculatively genetic would be totally illegal.”
This qualification is further expanded upon when the court states that:
“Discrimination in health insurance against individuals based on their genetic disposition or genetic heritage, in the absence of appropriate genetic testing and laying down of intelligible differentia, is unconstitutional”.
In other words, the court says that while it is illegal to use an all-encompassing, generic phrase like “genetic disorder” in an insurance policy because such terms are poorly defined, it is still permissible to prohibit specific diseases that can be identified through “appropriate genetic testing”. This allows insurance companies to discriminate against any person with a genetic disorder provided there is evidence linking the genetic disorder to the disease condition.
How does the court reconcile this conclusion with the right to health insurance as part of the fundamental right to health under Article 21? The answer is simple – the court simply does not answer the contradiction in its order.
Fundamental rights are usually not absolute and are subject to reasonable restrictions. But of what use is a fundamental right to health if reasonable restrictions can be imposed on the right? If health insurance has been grounded in a fundamental right to health, insurance companies should not be allowed to discriminate against any person for any disease because there is no rational way of judging the reasonableness of a restriction that permits exclusions for particular diseases in health insurance policies. What is the rational argument to decide that one particular disease can be excluded in an insurance policy and another cannot? The goal of a fundamental right to health is to ensure a healthy citizen, no matter whether the disease is attributable to personal habits or genetic disorders.
Rather than muddy its judgment with these obvious contradictions, the court should have decided the appeal by sticking to simple principles of contract law rather than resolving the case with the aid of constitutional law.
Prashant Reddy T is assistant professor at NALSAR University of Law.