Six-month insurance waiting period in UAE clarified
Pre-existing health conditions not covered for first-time insurance cover
Dubai: Preexisting health conditions are not covered during the initial six months when expatriates are applying for insurance for the first time, a top official has said. However, these conditions will be covered for those who are migrating onto a new health insurance while changing job.
Saleh Al Hashimi, CEO of Dubai Health Insurance Corporation (DHIC) told Gulf News, “Waiting periods are a standard practice in many insurance policies but predominantly seen in the health insurance sector to prevent an unnecessary rise in annual premiums.”
The waiting period helps prevent people from buying insurance only to cover the cost of an illness or surgery that they are aware of as opposed to buying insurance as a security for when it is needed, explained Al Hashimi.
The process of antiselection, increased insurance claims unjustly, which in turn drives premiums higher inflating the cost for everyone. This is always felt in subsequent years during renewal
This mechanism thus prevents quick claim seekers from buying insurance only for a period of treatment for a particular surgery or illness, otherwise the burden of this payment would fall on the rest of the insurance payers, he added.
“It is for this reason that insurers rightfully utilise the allowed waiting periods to avoid abuse to their pooling of funds and to avoid unnecessary litigation,” he said.
If waiting periods were not allowed, there would be an influx of individuals migrating to Dubai to purchase health insurance only to obtain known required treatments at 10 times higher than the premium they had purchased their policy for, he explained. This would in turn severely hurt the insurance sector and drive up premiums for the population in subsequent years.
Anti-selection
Anti-selection is a process where an insurance company while underwriting the details of the individual purchasing the health policy fails to alert the provider about a high health risk exposure the person may have and actually pays the same premium as a healthy individual with low health risks. For instance if the person has been addicted to smoking or use of tobacco and is at risk of contracting cancer or developing hypertension, he ends up filing a higher number of claims as opposed to the healthy individuals. When this anti-selection happens in higher numbers the insurance provider has no choice but to raise the premium and this cost inflation also affects the individual who may have filed minimum claims.
“The process of anti-selection, increased insurance claims unjustly, which in turn drives premiums higher inflating the cost for everyone. This is always felt in subsequent years during renewal,” added Al Hashimi.
Recognising that waiting periods can also hassle genuine policy holders, the DHA has worked out a system to allow emergency treatments for free even in case of a preexisting treatment.
“At Dubai Health Insurance Corporation (DHIC), we have allowed a six-month waiting period against preexisting conditions, however, if a preexisting condition develops into an emergency, the waiting period must be waived off for that episode,” said Al Hashimi. “In fact, there are insurers that offer a reduced or no waiting period, therefore this is not a mandatory requirement for all policy types.”
He also added that waiting periods do not apply as people have been in the mandatory insurance system for over three years now: “Realistically as we are in the third year of implementation of the mandatory health insurance in Dubai, the majority of insured members will not have waiting periods unless they are a new entrant to Dubai and are purchasing their first policy or unless they have not complied with the law.”
Change of job
In case of a job change, the insurance company of the first employer is mandated by law to provide cover for 30 days after the cancellation of the policy (unless the policy expires earlier and in that case until the end of the expiration period) so that the individual has access to continuous insurance cover and can access health services during this period.”