‘Anyone From GOI To Protect Us?’ Senior Citizen Raises Issue Of Massive Premium Hike In Health Insurance

In a now-viral post on X (formerly Twitter), Rajeev Matta, a senior citizen, has raised a burning question that concerns countless Indians. Why are health insurance premiums rising so much, especially for the elderly?

At the age of 61, Matta, who is in perfect health and has never made a claim, is facing a 90 per cent hike in his health insurance premium. From Rs 64,762 for a two-year policy in 2023, his renewal premium has increased to Rs 1,23,130 for the same coverage.

Frustrated with such a steep hike, he tagged the government and regulatory authorities, asking, “Anyone from GOI to protect us?”

Cry For Help… and Some Explanations

Delve deeper into the replies on Matta’s post and you will find many questioning a similar rise in their premiums without proper explanations.

Matta’s policy provided him coverage of a sum assured of Rs 10 lakh with Rs 8 lakh accrued bonus (supposed to increase by Rs 2 lakh after renewal). He questions why his premiums rose so steeply despite his claim-free history and a healthy lifestyle.

“What about the premiums I paid when I wasn’t aged? What about my health condition, which they evaluate now?” he asked.

The post has spurred a wave of responses highlighting and questioning similar experiences from others. Another senior citizen replied that he saw a 45 per cent increase in his premiums over three years for a policy he has held for 34 years without any major claims. A young user also shared that he saw his parent’s policy premium double in the 7th year of renewal, despite no claims over the years.

Many are questioning the point of buying insurance early on if it’s going to become unaffordable in old age.

Why Premiums Rise With Age?

Health insurance premiums rise with age, as insurers account for the higher likelihood of medical claims by the elderly.

But why such steep hikes?

According to Shilpa Arora, co-founder and COO of Insurance Samadhan, the policy premiums of the elderly rise because of a few factors.

Living In Metros: Urban dwellers face higher medical costs, which insurers factor into premiums.

Annual Premium Hikes: Insurers adjust rates based on claim experiences and rising healthcare costs.

GST Impact: The 18 per cent Goods and Services Tax (GST) further inflates premiums.

A survey report by Local Circles in May 2024 found that 52 per cent of Indians feel that their premium has increased by over 25 per cent in the last 12 months. The survey was based on 11,000 responses from personal health insurance policyholders located in 324 districts of India

The age and the associated risks that come with it act as a double-edged sword.

As individuals age, their probability of chronic illnesses and hospitalisation increases. As of result of this, insurers do an annual review of each health insurance product based on claim experience. For instance, senior policyholders require coverage for chronic conditions (such as diabetes or any heart-related issues), which leads to increased costs for the insured.

The younger cohort often lock-in lower premiums by opting for co-payments or deductibles. For older policyholders, these options are less practical due to their higher healthcare needs.

Moreover, the removal of the regulatory ceiling by the Insurance Regulatory and Development Authority of India (Irdai) for policy entry age in 2024 has allowed insurers to offer policies to individuals over 65 years of age. While this expands access, it does not shield seniors from age-based premium hikes.

Ways To Reduce Premium Burden

Without meaningful regulatory changes, many senior citizens may find health insurance beyond their reach at a time when they need it the most. Here are a few ways of reducing premium burden in old age.

Waiving GST: Removing the 18 per cent GST on premiums for senior citizens could provide immediate relief.

Porting Policies: Policyholders can switch to insurers offering lower premiums, though this may not be a long-term solution.

Co-payment Option: Sharing medical expenses with insurers can lower premium costs.

Long-Term Policies: Locking in premiums for up to three years can help mitigate annual hikes.

The government is planning to raise the foreign direct investment (FDI) limit in insurance from 74 per cent to 100 per cent – a move that is expected to not only open India’s insurance sector to global players, but also bring in policies and options of global standards for the Indian customers.

In addition to bringing more options and investments, the government can also focus on what affects the customers directly; the rising premiums.

At present, the plight of senior policyholders like Rajeev Matta is serving as a collective voice of the elderly pleading for some regulatory or government intervention. This highlights the urgent need for a balanced approach that ensures affordable health coverage for all, especially the elderly.