Senior citizens, even if they are 80 or 90 years old, will now be able to buy health insurance, irrespective of existing medical conditions. This is a huge relief for all Indians above the age of 65.
The insurance regulator, Insurance Regulatory and Development Authority of India (IRDAI), has asked insurance companies to offer their usual health policies to everyone, including senior citizens, students, and children.
This comes after the ruling BJP said in its election manifesto that “everyone over the age of 70 years” would be brought under the government’s Ayushman Bharat health insurance scheme.
What is the new health insurance provision, and how will it help?
The regulator has told insurers to “design products specifically for senior citizens, students, children, maternity and any other group as specified by the Competent Authority (IRDAI)”. The insurers “shall endeavour to offer coverage for persons with all types of existing medical conditions,” the IRDAI said in “Specific provisions applicable to health insurance products” published in the Government of India Gazette.
India is a predominantly young country currently, but the share of the population above the age of 60 is projected to reach 20% by 2050. Following the IRDAI instruction, “companies can build new products or enhance existing products offering comprehensive coverage to the entire family, including parents, instead of the current approach of restrictive offering for senior citizens,” said Rupinderjit Singh, Vice President-retail Health, at the insurtech company ACKO.
Sharad Mathur, MD & CEO, Universal Sompo General Insurance Company, said the move will benefit both senior citizens and working adults who are caring for aging parents. “Not only will it improve access to quality healthcare services, it will also encourage more Indians to secure their loved ones against serious medical conditions and illnesses,” Mathur said.
Insurance companies mobilised Rs 1.09 lakh crore in all as premium in the year ended March 2024. Government schemes accounted for Rs 10,577 crore, retail customers Rs 42,200 crore, and group policies Rs 55,020 crore, according to General Insurance Council data.
What was the age limit for health coverage until now?
IRDAI norms put the ceiling for buying health insurance at age 65. Thereafter, insurance cover came with tougher conditions, including compulsory pre-insurance health check-ups, and no cover for pre-existing ailments. This is because susceptibility to illnesses increases after a certain age, regardless of how healthy an individual customer may be.
Also, premiums increased with age, so customers older than 50 were forced to make do with limited cover, and accept the removal of certain insurance riders. “A large number of senior citizens have no coverage, or coverage that is not enough to foot their hospital bills. This is a great opportunity to innovate and penetrate the underserved market,” said Sumit Bohra, president of the Insurance Brokers Association of India (IBAI).
What should senior citizens look for when buying health insurance?
In general, those with no medical conditions should look to buy the most comprehensive cover, with 100% bill payments, and small or no waiting periods.
“Customers with existing health issues should evaluate options from various insurers, and choose the best balance of cover and cost. They should consider the network coverage, room rent limit, disease sub-limits, consumable cover, and other policy terms and conditions which may curtail payouts at the time of claim, ACKO’S Singh said.
Mathur said the amendment should “ultimately serve the interests of senior citizens and take India a step closer to the goal of achieving universal healthcare for all by 2030”.
What issues could possibly arise in the implementation of IRDAI’S idea?
Insurers may not be enthusiastic about catering to the 65-plus age bracket, and even if they do, the terms and conditions of such insurance policies may not be favourable to the customer.
A 70-year-old individual who may now have the opportunity to buy health insurance for the first time, will likely encounter stringent terms, exclusions, and possibly high premiums. Since people in the 65-plus age group often have pre-existing conditions, insurers will carefully evaluate the profitability, sustainability, and scalability of their policies for this demographic.
“Individuals seeking health insurance post-retirement may find it advantageous to continue with employer-offered health insurance if possible, where insurers can provide more competitive premium rates and favourable policy conditions,” Anuj Parekh, Co-founder and CEO, Bharatsure, said.
Ultimately, while IRDAI seeks to promote access to insurance for older age groups, its move also underscores the importance of aligning insurer interests with customer needs to ensure comprehensive and equitable coverage across all demographics, Parekh said.
