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Irdai caps senior citizens' health premium increase at 10% per annum

Steep rise in health insurance premium of senior citizens has been engaging the attention of Irdai and is a regulatory concern, Irdai said

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“This is leading to higher hospitalisation costs, resulting in higher claims outgo under health insurance products offered by insurers,” Irdai said. Representational image

Aathira Varier Mumbai

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Following multiple reports of health insurance companies significantly increasing premiums for senior citizens upon renewal, the Insurance Regulatory and Development Authority of India (Irdai) on Thursday issued a directive that mandates insurers to not revise health insurance premiums for senior citizens by more than 10 per cent annually, with immediate effect.
 
If an insurer needs to increase premium by more than 10 per cent in a year, prior approval from the regulator would be required, Irdai said in a statement. Prior approval of the regulator would also be required in case of withdrawal of individual health insurance products offered to senior citizens, the statement added.
 
 
In the statement, the insurance regulator highlighted that as part of the ongoing monitoring of insurance products offered in the Indian insurance market, it is observed that there has been a steep increase in premium rates under some of the health insurance products offered to senior citizens (aged 60 years and above).
 
“…the most vulnerable age group is the senior citizens having limited sources of income and this group is impacted the most when there is a steep increase in health insurance premium. This matter has been engaging the attention of Irdai and is a regulatory concern,” Irdai said.
 
Additionally, insurance companies have also been directed to give wide publicity to the various measures taken for the benefit of senior citizens while offering health insurance products. Further, Irdai has directed the insurance companies to take necessary steps for common empanelment of hospitals and negotiate package rates on the lines of Prandhan Mantri Jan Arogya Yojana (PMJAY).
 
The regulator, in the statement, explained that health insurance premium rate is primarily based on the estimated claims outgo and the expenses, including acquisition costs incurred by the insurance company for acquiring and servicing the policies. The claims outgo is largely dependent on the amounts charged by the hospitals for various treatments and surgeries.
 
Further, the regulator pointed out that in the case of PMJAY, hospitalisation expenses are negotiated centrally for package rates and are thus standardised across various hospitals, but there is no such standardisation in case of health insurance products.
 
“This is leading to higher hospitalisation costs resulting in higher claims outgo under health insurance products offered by insurers,” Irdai said.

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First Published: Jan 30 2025 | 9:04 PM IST

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