In the BJP’s manifesto for the upcoming elections, Prime Minister Narendra Modi has promised to extend health insurance coverage to all individuals aged 70 and above under the Ayushman Bharat scheme.
This move is not only aimed at enhancing the healthcare system in the country but also at securing the support of the elderly population, who constitute a significant portion of India’s demographics.
The Ayushman Bharat scheme, also known as the Pradhan Mantri Jan Arogya Yojana (PMJAY), was introduced by PM Modi in 2018 and is considered the world’s largest government-funded healthcare program.
It offers coverage of up to Rs 5 lakh per family per year for secondary and tertiary care hospitalization to over 12 crore vulnerable families, comprising the bottom 40 per cent of the Indian population. The scheme covers expenses such as diagnostics and medicines for up to 3 days pre-hospitalization and 15 days post-hospitalization, and all pre-existing conditions are covered from day one.
A boost for seniors
If realized, this new manifesto pledge will expand the reach of the scheme and provide essential healthcare services to the elderly population in the country. Prime Minister Modi stated, “The biggest concern of the elderlies is how they will afford treatment for their ailments. This concern is even more serious for the middle class. BJP has now taken the ‘sankalp’ that every individual above 70 years of age will be brought within the purview of Ayushman Bharat Yojana,” Modi said.
Health insurance claims have risen significantly over the past few years, with a notable increase of 10-30 per cent across all age groups post-Covid-19. Senior citizens have been particularly affected, as they often face high premiums and lack a regular income to accommodate additional expenses.
The premium for senior citizens is generally high also due to the prevalence of pre-existing ailments or conditions in this demographic. This, coupled with the natural aging process, contributes to higher health insurance premium rates for senior citizens and may deter some insurers from offering policies to them.
According to the latest annual report of the Insurance Regulatory and Development Authority of India (IRDAI), net incurred claims under health insurance business totaled Rs 64,631 crore in 2022-23, marking a 2 per cent increase from the previous year.
The Net Incurred Claims Ratio for health business decreased from 109% in 2021-22 to 89% in 2022-23.
The coverage provided by the Ayushman Bharat scheme will assist senior citizens in paying for their medical expenses, addressing a critical concern for many individuals in this age group.
Affordable insurance for small traders and MSMEs
To safeguard the interest of small traders and Micro, Small and Medium Enterprises (MSMEs), BJP manifesto also emphasizes a commitment to launch affordable insurance products. This innovative proposition aims to protect these businesses from potential upheavals caused by accidents such as fire, theft, and natural disasters, offering them a safety net that has previously been lacking.
“Climate change is a growing concern across the globe, and India is no different; between the period from 2001 – 2021, we witnessed more than 350 natural catastrophes (NAT CATs). Incidents of floods, cyclones, landslides, and floods are on the rise across the length and breadth of the country. The protection gap between insured loss v. economic loss is alarmingly wide at more than 90%. The necessity for a country-wide parametric insurance scheme was never higher.
Insurers (public and private), governments (state and central), and regulatory bodies have to come together and work in close collaboration to make country-wide parametric insurance a reality. The product will go a long way in bridging the protection gap and helping Indian citizens rebuild their lives much more swiftly after a NAT CAT event,” Tapan Singhel, MD & CEO, Bajaj Allianz General Insurance Company told Business Today.
The insurance sector in India needs a shift in its focus towards the small traders and MSMEs. These businesses, an integral part of the national economy, are often vulnerable to unexpected adversities. In the face of such unpredictabilities, affordable products will help these entities to recover faster and continue their operations.