13 – 14 SEPTEMBER, 2010

BRIDGETOWN, BARBADOS

SYMPOSIUM ON HIV AND HUMAN RIGHTS IN THE

CARIBBEAN

SESSION 4PANEL DISCUSSION

HIV EMPLOYMENT AND INSURANCE ISSUES

HIV AND INSURANCE – STEVE R. STOUTE

Overview

• The impression is given that the life and health insurance industry is less tolerant of persons infected with HIV compared to persons with other medical impairments.

• I will  examine this perspective in this presentation.

• Applicants for insurance are screened /underwritten before being provided with insurance.

• This process is necessary to prevent people from acquiring insurance when they are sick and to eliminate “anti-selection”.

• The underwriter reviews specific medical data to determine the morbidity and mortality of an applicant.

• A decision is either made to provide coverage at normal rates, at an increased cost or to deny coverage.

• Depending on the size of the policy, various medical requirements are routinely requested.

Selection Process

Insurers Reaction To HIV/AIDS

• The first diagnosis in the early 1980’s caused great concern within the insurance industry.

• Actuaries and underwriters were worried that this disease could greatly impact the overall profitability of the life and health insurance industry.

• Companies worldwide took immediate steps to protect from adverse mortality and morbidity from HIV.

• The HIV screening test was added to the list of routine underwriting requirements mentioned above.

Insurers Reaction To HIV/AIDS

• Some insurers attempted to affix AIDS Exclusions to their policies but this was disallowed by regulators in most jurisdictions.

• In the Caribbean, there are no policy exclusions for non-payment of benefits for individuals suffering from HIV/AIDS.

• In most Caribbean jurisdictions, Governments objected strongly to insurers introducing the routine HIV blood test. It was argued that this could motivate panic and was not an effective detection device.

• In negotiations with governmental agencies, insurers argued that they tested for diabetes, cholesterol, cancer, kidney disease and other impairments on a routine basis. The HIV test would not be discriminating against a specific group.

• Governments conceded subject to special rules and regulations.

Insurers Experience with HIV/AIDS

• Ten years after the first diagnosis, the impact of HIV/AIDS on the insurance industry was minimal. There were 3 reasons for this:– The HIV screening test was successful more from what insurers

termed the sentinel effect than as a detection device. The sentinel phenomenon meant that high risk individuals were not motivated to apply for insurance out of fear of testing positive.

– HIV/AIDS, especially within the Caribbean region seemed to be prevalent in the lower social strata.

– In the health insurance employee benefit discipline, persons suffering from the disease were not motivated to make claims due to the stigma attached to the disease.

Insurers Experience with HIV/AIDS• At this point in time, an HIV positive individual is unable

to obtain individual life or individual medical insurance.• Persons who have in force life and health insurance

become HIV positive remain fully covered.• HIV positive persons who are recruited by companies

with large group health employee benefit programmes can receive full coverage under these policies even though infected by HIV.

• There is strong adverse criticism of the insurance fraternity for not being more liberal towards HIV-infected persons.

The Insurer’s Dilemma

• Regional insurers operate in a vacuum with respect to salient mortality and morbidity data on HIV/AIDS.

• In Barbados, although the insurer pays for the routine HIV test, the results of a positive test are not revealed to the insurer, who must guess that an applicant is HIV positive when an application is not proceeded with.

• Medical practitioners seldom, if ever, mention HIV/AIDS on a death certificate. Insurers must, therefore, guess whether a death claim has resulted from an HIV/AIDS infection.

The Insurer’s Dilemma• Insurers provide life insurance to persons suffering from

diabetes, hypertension, a history of cancer and other impairments as salient data is available to allow for assessment of these diseases.

• This is not the case for HIV/AIDS.

The Way Forward• The medical fraternity and the insurance industry needs to work

together to find remedies for this situation.• In South Africa, where data is readily available, some insurance

companies have started providing policies specifically designed for HIV-positive individuals. In assessing these lives, viral load and other factors are taken into consideration.

• The same way that the medical fraternity has worked with insurers on diabetes, hypertension, obesity etc with preventative and other programmes a similar example should be followed for HIV/AIDS.

It will always be difficult to provide individual health insurance for HIV, diabetics, etc. but with closer co-operation, life insurance products could be available.

Summary

• Traditionally, the insurance sector and the medical sector have worked closely. Routine insurance tests have revealed uncontrolled hypertension, diabetes and other diseases and such early detection have prolonged the lives of many people.

• The famous basket-ball player, Marvin ‘Magic’ Johnson was found to be HIV positive through a routine insurance test which prolonged his life and perhaps saved the lives of others.

• In the United States and other countries, the oral HIV test has been added to the profile of other tests required for insurance. This is a day-to-day and routine happening in that environment. It is my belief that the medical profession currently motivates the paranoia and stigma attached to HIV instead of treating same as any other chronic non-communicable disease.

CONCLUSION

• In order to protect their policyholders, their shareholders and indeed the financial future of many employees, insurance companies have to discriminate against certain categories of risk. There is no specific policy to single out HIV and AIDS sufferers. However, closer co-operation and understanding from all salient parties would work to the advantage of all players, especially those persons suffering from HIV/AIDS.

CONCLUSION

• Thanks.

• Comments/Questions.