Challenges and Opportunities in Pricing Health Insurance for Older Citizens: Experts Weigh In
The recent push by the insurance regulator to encourage insurance companies to offer health products to all age groups, including those above 65, has drawn attention to the challenges and opportunities in pricing such policies, according to experts.
While there is no regulatory cap on age for health insurance policies, most companies have had internal policies that restrict selling health insurance products to persons over 65. However, the Insurance Regulatory and Development Authority of India (Irdai) has mandated that insurance companies must offer health insurance products to all age groups effective from April 1, 2024.
According to experts, the key challenge lies in the affordability of insurance at a senior age. “The price of the product is always higher because the risk and vulnerability are higher,” said an insurance industry official. “The amount of insurance cover and existing set of ailments also pose significant issues.”
Rupinderjit Singh, Vice President of Retail Health at ACKO General Insurance, sees the move by Irdai as instrumental for insurers, expanding the eligible customer base and promoting competition and transparency in the above 65 years category. Companies now have the opportunity to develop new products or enhance existing ones to offer comprehensive coverage to entire families, including parents.
The recent Irdai notification not only mandates offering insurance to all age groups but also bars companies from refusing policies to individuals with severe medical conditions such as cancer, heart or renal failure, and AIDS. It also reduces the waiting period for coverage of pre-existing conditions from 48 months to 36 months. However, this waiting period norm doesn’t apply to overseas travel policies.
Despite the potential benefits, insurers face several challenges. Accurately pricing premiums for senior citizens due to limited past experience, ensuring adequate coverage, and updating medical underwriting processes are among the key hurdles, according to industry officials.
To address these challenges, Irdai has directed health insurance providers to introduce tailored policies for specific demographics, such as senior citizens, and establish dedicated channels for handling their claims and grievances. Krishnan Gopalakrishnan, Head of Compliance at Bajaj Allianz General Insurance, sees this as part of Irdai’s broader vision of achieving insurance for all by 2047.
The proposed regulation aims to handle complaints and claims of senior citizens through specialized channels to ensure a more tailored and responsive approach to their requirements.
In conclusion, while the move to expand health insurance coverage to older citizens presents challenges in pricing and coverage, it also offers opportunities for insurers to innovate and better serve this demographic. By addressing these challenges and leveraging the opportunities, insurers can contribute to achieving broader financial inclusion and accessibility to healthcare services for all.
