Sr citizen health premium hikes capped at 10% as prices pinch

MUMBAI: Irdai has directed insurers not to increase senior citizens’ health premiums by more than 10% for without approval as those aged 60 and above see mediclaim policy prices shoot up. Additionally, insurers must seek approval from the regulator before discontinuing health policies for seniors.
To control rising healthcare costs, insurers have been urged to standardise hospital empanelment and negotiate package rates similar to govt’s PM Jan Arogya Yojana (PMJAY).
An Irdai statement noted a significant increase in premiums for some health insurance products for policyholders aged 60 and above. The regulator noted that premium rates are determined by estimated claims, administrative costs, and acquisition expenses. A major factor driving these increases is the lack of standardised hospitalisation costs in private insurance, unlike PMJAY, which negotiates uniform package rates.
Senior citizens have reported instances where their premiums nearly doubled, particularly when crossing into a higher age bracket coinciding with an insurer’s pricing revision. The annual nature of health insurance contracts exacerbates this issue, as there is no level premium structure like in term insurance. In contrast, term insurance collects premiums evenly over a fixed period, whereas health insurance costs fluctuate due to rising medical expenses.
Currently, health insurance does not offer premium discounts for maintaining good health. The primary incentive for purchasing health insurance early remains the continuity benefit, which ensures claims are not rejected due to pre-existing conditions.
Under new Irdai guidelines, insurers are required to disclose the rationale behind price hikes, ensuring transparency for policyholders.