Insurance Companies Yet To Implement 10 Per Cent Cap On Senior Citizen Health Insurance

According to a recent media report, insurance companies have yet to implement a 10 per cent cap on senior citizen health insurance. Insurance companies might be taking time because putting a cap on premiums impacts their overall pricing and profitability, according to experts. Senior citizens usually need more medical care, so limiting the premium increase to 10 per cent could mean extra costs for the insurers. They might be reviewing their financial plans carefully before fully adopting this rule, causing a delay.

There are still some points insurance companies want clarified. So they have gone back to the Insurance Regulatory Development Authority of India (Irdai) regarding clarifications. 

“There may be some clarification on how this is implemented, because of the age bracket and whether this results in the 10 per cent annual revision,” says a senior insurance expert on condition of anonymity.

Senior Citizen Premiums May Still Remain High 

“The delay may mean elderly citizens can still expect surprise and large premium increases, making it harder for them to be able to afford health insurance. Health coverage is something many older policyholders depend on, and large premiums could cause them to scale back on their coverage or cut it out altogether, leaving them without critical healthcare protection,” says Kunal Varma, CEO and co-founder of Freo. 

However, we need to understand how insurance products are priced. Earlier, Irda was following the file-and-use regime for all insurance products, including health insurance. The insurance company would file the product with Irda and get the Unique Identification Number (UIN), and all approvals, including pricing, would come through. 

“The company would then evaluate how the product performs based on the demography covered under that UIN number. Depending on this assessment, they could decide to withdraw the product, continue it, enhance its coverage, or revise its pricing structure. Now, we have moved away from file-and-use, making that entire process redundant,” says the senior expert.

Irdai will probably watch closely over the insurers and may motivate or advise them strongly to adopt the guidelines. They could also intervene to better understand the insurer's problems and arrive at a practical solution.

Elderly Citizens Need To Stay Aware 

While this is happening, the consumers, particularly elderly citizens, need to proactively reach out to their insurance providers, explicitly inquire about premium increases, and explore options for comparing the other insurer's plans to find more favourable coverage. “Consumers must also approach Irdai or consumer associations if they encounter unjustified premium increases, and this will make the issue spotlighted and force the insurers to fall in line sooner,” says Varma. 

Buy Outlook Money March 2025 Magazine Issue on Amazon Here.