Hidden Costs In Health Insurance: What Seniors Pay Beyond Premiums While Buying Health Plans

Senior citizens in India are increasingly turning to health insurance to protect themselves against rising medical expenses. While premium amounts often grab attention, what many seniors don’t realise is that the cost of medical insurance for the elderly doesn’t end with just buying a policy. There could be several hidden or overlooked expenses that can place a significant financial burden on seniors, even when they are insured.

Here are five major hidden costs that India’s seniors typically face beyond the insurance premium.

1. Co-Pay Clauses: Fine Print That Bites

Many senior citizen health insurance plans in India include a co-pay clause. This option requires policyholders to pay a fixed percentage of the total hospital bill out of pocket. This can range from 10-50 per cent. This percentage varies depending on the individual’s age or health condition and which insurer one opts for.

For Instance, a hospital bill of Rs 5 lakh with a 20 per cent co-pay means that the senior pays Rs 1 lakh, despite being insured. Co-pay often applies on hospitalisation. This can simply be a bad investment for seniors, as the co-pay amount can add up fast for patients with chronic illnesses.

2. Room Rent Limits: Paying Extra for Comfort

Many policies cap the room rent allowed, for instance Rs 2,000– 5,000 per day. If a senior chooses or is admitted into a room above this limit, say Rs. 7,000 per day, they must pay the entire difference not just for the room, but for associated charges, too, such as doctor’s visits and surgical fees. Even a minor room upgrade can lead to disproportionately higher costs. Hospitals often link consultant fees to room category.

However, there are many insurers that allow the policyholder to either take a rider that has no capping on the room rent, or offers choices between certain types of rooms for you to select as per your comfort. Some also offer co-pay, in which the insurer pays the amount covered under the insurance, and any difference has to be paid by the policyholders themselves.

3. Non-Covered Medical Expenses: The Uninsured Essentials

Non-medical expenses in health insurance are non-medical costs incurred during hospitalisation, which are not directly related to medical treatment. These expenses are not covered under standard policies and can add additional financial burden on patients. These costs can accumulate significantly over a prolonged hospital stay. Policyholders can better plan their medical expenses by understanding these exclusions and understanding the policy terms. Some insurers offer customisable add-ons to cover non-medical costs. The Insurance Regulatory and Development Authority of India (Irdai) categorises these expenses as consumables, administrative charges, and personal comfort expenses.

Insurance typically does not cover a wide range of consumables and medical items. These medical items may seem small, but are often used in large quantities during hospitalisation and are also expensive.

Here are some of the items that are typically not covered under insurance:

• Gloves, syringes, cotton

• Hospital registration fees

• Ambulance charges above limits

• Oxygen masks, nebulisers

• Dietary supplements

4. Pre-Existing Disease Waiting Periods: The Delayed Safety Net

Most insurers impose a waiting period of 2-4 years for coverage of pre-existing diseases (PEDs), such as diabetes, hypertension, or arthritis which are highly common among the elderly. If a claim arises during this period, seniors have to bear 100 per cent of the cost, as policies often exclude hospitalisation linked to these diseases even in emergencies.

For instance, a senior with a known cardiac condition who develops complications within the first year of policy, may have to bear expenses despite being covered for other emergencies, such as accidents, because of the PED waiting period.

5. Renewal Loading and Age-Based Premium Hikes

Loading in health insurance is an additional charge added to the premium for individuals with higher risk factors, such as pre-existing medical conditions, unhealthy lifestyles, or adverse medical histories.

These cover losses arising from ensuring an individual who is prone to a form of risk, especially if the expected expenses for that period are expected to be higher than anticipated. Factors affecting loading include age, smoking, medical condition, and PEDs. Obesity, occupation, and place of residence also influence loading. Being overweight is often associated with an increased risk of high blood pressure, diabetes and cardiac diseases, which often leads to higher premiums.

While some policies promise “no loading on claim,” many insurers still increase premiums steeply with age or after a major claim. Seniors may face 40–60 per cent hike in annual premium in their late 60s and 70s. High premiums can become unsustainable for retirees, leading to policy discontinuation, just when coverage is most needed.

How are Loading and Exclusion different?

Loading and exclusions are two common strategies insurers use for managing risks.

Loading refers to an additional amount added to the base premium to cover ‘risky’ individuals, while exclusions are specific conditions or treatments that the insurance policy does not cover. The key difference lies in the impact on the overall coverage. With loading, the policyholder gets coverage for their condition but at a higher cost, while with exclusions, certain conditions or treatments are denied coverage, even if the policyholder has an insurance cover.

Tips for Seniors

Here are few things seniors could consider while buying a health insurance policy

•   Look for plans with no co-pay clauses and higher room rent eligibility.

•   Opt for insurers that offer coverage from day one for select pre-existing illnesses.

•   Carefully compare the list of non-payable items and check the claim settlement ratios.

•   Seek the help of a certified insurance advisor, especially when navigating senior-focused plans.

•   Ultimately, premiums are just the tip of the iceberg. The real cost of insurance lies in the fine print—and how well you understand it.

Final Thoughts

Insurance is a necessity, not a luxury, and more so for India’s aging population. However, choosing the right policy and understanding these hidden costs is crucial to avoiding unexpected financial stress. Some insurers offer customisable add-ons to cover certain ailments; so, choose your policy carefully. Proper financial planning and selecting the right coverage options can help mitigate unexpected non-medical expenses in old age.