AA Edit | Help seniors pay for health cover

The Insurance Regulatory and Development Authority (IRDAI) has decided to make it mandatory for insurance companies to offer standard health insurance policies to people aged 65 and above. While some non-life insurance companies have been offering life-long health insurance products to senior citizens, the IRDAI’s new move will create a standard policy across the industry for senior citizens.

The premium or the cost of the health policy, however, will continue to be decided by the insurance company on the basis of the risk profile of the person who seeks to buy it. A `5 lakh health insurance policy for senior citizens, which is available in the market, typically costs `30,000 to `40,000 for a 65-year-old man.

The cost of the insurance policy will increase with the rise in the policyholder's age and hospitalisation risk. The health insurance industry, therefore, in consultation with the Central and state governments, should devise a way to fund a part of the cost of standard health cover provided to senior citizens through the exchequer.

This model will reduce the cost of the government’s healthcare spending, while allowing an individual freedom to buy his or her desired health product.

Apart from allowing standard health insurance policies for senior citizens, IRDAI has taken several steps that will be beneficial to the people. Now insurers will have to cover pre-existing conditions, including severe illnesses like cancer and AIDS.

They will also have to offer premium instalment plans. Unlike in the past, there will be no cap on covering AYUSH treatments, including Ayurveda and yoga, which will free the policyholder to opt for his or her favourite methodology. The industry regulator has also decreased the health insurance waiting period from 48 months to 36 months, which means all pre-existing conditions — regardless of whether the policyholder has disclosed or not —  will be covered after three years.