The insurance regulator steps in to protect senior citizens from excessive premium increases, ensuring affordability and accessibility of health coverage.
IRDAI Introduces Pricing Cap on Senior Citizen Health Insurance
The Insurance Regulatory and Development Authority of India (IRDAI) has issued a new directive restricting health and general insurers from increasing senior citizen health insurance premiums by more than 10% in a single year without prior consultation.
This decision follows numerous complaints from senior citizens regarding steep premium hikes, with some insurers reportedly increasing premiums by 100%, making health coverage unaffordable for older policyholders.
Key Provisions of the IRDAI Circular
Under the new regulation, insurers offering indemnity-based health insurance products to senior citizens must:
- Seek IRDAI approval before increasing premiums by more than 10% in a year.
- Inform IRDAI before withdrawing any health insurance product for senior citizens.
- Publicize all measures taken to benefit senior citizens while offering health insurance products.
- Standardize hospital empanelment and negotiate package rates similar to the model used in Pradhan Mantri Jan Arogya Yojana (PMJAY) to ensure fair pricing.
Industry Experts on the New Regulation
Healthcare and insurance experts have welcomed this move, emphasizing its significance in protecting senior citizens from excessive financial strain.
Dr. Sabine Kapasi, Co-Founder and MD at Enira Consulting Pvt Ltd., and Global Health Advisor at the UN, highlighted the struggles faced by India’s 138 million senior citizens:
“Nearly 40% of seniors live with disabilities, and 75% suffer from chronic illnesses. With medical costs rising by 14% annually, high premiums make health coverage unaffordable for many.”
Anantaram Varayur, Co-Founder of Manasum Senior Living, pointed out that:
“Many insurers do not provide health insurance to seniors. Even when available, premiums are exorbitantly high, and many policies impose lock-in periods on pre-existing conditions.”
Ensuring Price Stability for Senior Citizens
Hanut Mehta, CEO and Co-Founder of Bimapay Finsure, explained how the 10% cap will benefit policyholders:
“By limiting premium increases, the regulation ensures pricing predictability and prevents steep cost escalations. This measure will help insurers retain customers and prevent policy lapses due to unaffordable premiums.”
Additionally, Shilpa Arora, Co-founder & COO of Insurance Samadhan, urged the government to further support senior citizens:
“The IRDAI’s intervention brings major relief as some insurers had imposed hikes of 50-60%, making policies unaffordable. The government should also consider reducing the 18% GST on health insurance premiums to make coverage more accessible.”
Impact on Healthcare Accessibility and Affordability
The IRDAI has also encouraged insurers to adopt standardized hospital empanelment and package rates, aligning with PMJAY’s cost structure. This initiative aims to:
- Reduce inconsistencies in hospitalization costs.
- Ensure affordability and accessibility of healthcare services for senior citizens.
- Improve financial management for insurers.
A Positive Step for Senior Citizen Health Coverage
With medical inflation soaring and senior citizens struggling to afford rising premiums, the IRDAI’s decision ensures greater financial security and continued access to healthcare. This regulatory move will:
- Prevent excessive premium hikes and improve pricing transparency.
- Encourage long-term policy retention by reducing financial burden.
- Support standardization of healthcare costs to benefit both insurers and policyholders.
Looking Ahead: Strengthening Senior Citizen Insurance Protections
While this new regulation marks a significant step, experts continue to advocate for further policy reforms, including reducing GST on health insurance and expanding insurance accessibility for seniors.
For more updates on IRDAI regulations and health insurance industry trends, stay tuned.
