India's Senior Health Insurance Gap: Why 83% Are Uninsured and How to Bridge It

India is facing a major issue in its healthcare system: most senior citizens lack health insurance. The majority of seniors lack health insurance coverage, which leaves close to 83 per cent of them (according to industry sources) exposed to financial risks when facing medical crises and increasing healthcare expenses. This lack of insurance coverage creates risks to elderly health while it generates major financial problems for their families.

One reason for the low health insurance coverage among seniors is the financial burden. Senior health plans become more expensive as people get older because older people tend to have more health problems. The situation creates difficulties for numerous people who receive stable incomes or limited savings to afford comprehensive coverage.

Another problem is the tendency to postpone buying health insurance. Young people with good health tend to ignore insurance until later in life. Later, they understand that obtaining suitable insurance coverage at affordable rates becomes challenging. The time delay makes it impossible for them to reach their objective.

The policyholder receives lower premiums and develops a claim-free status, which results in reduced future premiums.

"Older adults face an increased level of difficulty because of their existing medical conditions at present. The mentioned conditions could result in policy denial and extended processing periods, or the cost of insurance premiums will increase, reducing the number of people who can afford health insurance," says Adarsh Agarwal, Appointed Actuary, Digit General Insurance.

Financial problems form only one part of the issue because people face two main obstacles, which include insufficient knowledge about the system and doubts about its effectiveness. Many seniors and their families are unaware of the value of health insurance, the options available, and the importance of purchasing it.

Complex policy language and the perception of complicated claim processes cause hesitation. The process of applying for financial assistance creates anxiety for many seniors because they fear they will struggle with the system which could result in delayed or denied applications during their most critical financial needs. This mix of high costs, poor planning, and a lack of trust and knowledge creates a major barrier for seniors in India seeking health coverage.

Bridging The Gap

To fill the gap in senior health insurance, we need to make policies more affordable and accessible. The following methods will assist in reaching this goal:

Opt for Deductibles: Your insurance coverage begins after you pay a predetermined amount, known as the deductible. The selection of a deductible amount between Rs 5,000 and Rs 10,000 enables you to reduce your premium expenses by 10-20 per cent.

Consider Co-Payment: A co-payment means you will pay part of the hospital bill while your insurer covers the rest. For instance, if your hospital bill is Rs 50,000 and you choose a 10 per cent co-payment, you would pay Rs 5,000 out-of-pocket. This arrangement can make the policy more affordable.

"The combination of a deductible with a super top-up plan represents an efficient way to manage healthcare expenses. The base policy of Rs 5 lakh will cover the first Rs 5 lakh of medical expenses, while the top-up policy of Rs 10 lakh will cover the remaining Rs 2 lakh when total expenses reach Rs 7 lakh. This offers vital protection against high medical costs without the expense of a base policy with a larger sum insured," says Agarwal.

The policy allows seniors to choose from a selection of room categories at a lower rate. The choice of a twin-sharing room instead of a private room will result in lower premium costs. Medical check-ups performed regularly become eligible for discounted rates because doctors can identify health issues at their beginning stages, which reduces future medical expenses. Individuals can select options that fit their coverage needs to lower their premiums.

Taking Advantage of Discounts and Other Policy Features:

• Long-term policy discounts: Opting for a 2 or 3-year policy rather than an annual one can lead to discounts.

• Family floater discounts: Covering several family members under a family floater plan is generally less expensive than individual plans.

• Loyalty discounts: Having other policies (like motor or home insurance) with the same insurer may qualify you for a discount.

• Special discount offers become available to people who do not smoke and who practice healthy living.

To truly bridge the gap, "we need to focus on broader reforms and education. The government, along with insurers, should launch national campaigns to educate seniors and their families about the importance of health insurance. Simplifying policy language and claim processes, along with providing dedicated helplines for seniors, can help build trust and reduce hesitation," suggests Agarwal.

Additionally, policymakers should consider introducing affordable, standardised health plans for seniors with limited exclusions for pre-existing conditions. Encouraging employers to provide health benefits after retirement and promoting early financial planning to include health insurance as a vital part of the plan will help create a more secure future for India's senior citizens. By tackling issues related to cost, awareness, and accessibility, we can ensure that every senior citizen has the protection they need to enjoy their retirement years with dignity and peace of mind.