What is the new upper age restriction for getting a new health insurance plan? What has the Insurance Regulatory and Development Authority of India said regarding creating products for senior citizens?
Will all existing medical conditions be considered?
The Insurance Regulatory and Development Authority of India (Insurance Products) Regulations, 2024 went into effect on April 1.
The IRDAI has been pushing for reforms in life, general, and health insurance, including a potential change in the upper age limit for new health coverage.
What issues do the new regulations address?
The new regulations aim to help insurers respond quickly to developing market requirements, improve ease of doing business, increase insurance penetration, and protect policyholders’ interests. The final goal is to encourage insurers to follow good governance practices when designing and pricing policies. The new health insurance regulations reduce the “specific waiting period” from four to three years. This means a shorter wait time from policy purchase to receive insurance coverage for specific diseases/treatments, excluding accidents.
The new regulations state that diseases/treatments would be covered after the waiting time if the policy is renewed without interruption. The new laws set a three-year timeframe for determining pre-existing diseases. A pre-existing disease is defined as a health condition diagnosed or treated by a physician within three years of the policy’s start date.
The new regulations prioritise AYUSH therapy coverage, which includes Ayurveda, Yoga, Naturopathy, Unani, Siddha, and Homoeopathy. The regulator requires insurers to have a Board-approved policy and handle AYUSH similarly to other treatments.
The previous regulation, in effect until March 31, 2024, stated that insurers could provide coverage for AYUSH treatment in hospitals or healthcare facilities, subject to guidelines specified by the Authority.
The regulator advises insurers not to deny renewal of a health insurance policy based on previous claims, except for benefit-based policies that terminate after payment of covered benefits, such as critical illness policies.
What changes affect senior citizens?
The April 1 notification aims to expand insurance coverage across demographics, aligning with IRDAI’s ‘Insurance for All by 2047’ goal. The 2016 Health Insurance Regulations require all health insurance policies to have an entry and exit age of at least 65 years. Previously, health insurers could not deny coverage to anybody under 65 years old. However, this does not imply that all insurers were previously unwilling to offer health insurance to individuals over 65. The new regulations require insurers to create a separate channel for handling health insurance claims and grievances of senior persons.
How are insurance companies expected to react to the new regulations?
The IRDAI’s nudge has led several general insurers and stand-alone health insurers to wait and watch, while some may develop new plans for persons over 65. Health insurers are expected to reformulate their programmes over time, including raising the maximum entry age to 99 years.
What is the magnitude of the changes?
Access to health insurance is important, but senior persons must also be able to afford the costs, especially at critical periods.
IRDAI’s new regulations provide that the premium for health goods will remain unchanged over the policy duration, without affecting pricing. Insurers may offer premium payment in installments and offer incentives for early entry, renewals, favourable claims experience, preventive and wellness habits. These incentives should be disclosed upfront in the prospectus and policy documents.
The affordability of premiums is a crucial factor for many customers. The improvements allow insurers to develop policies for different demographics. Improved product features and affordability are heavily influenced by disease incidence and medical innovation.
ABHISHEK VERMA
