A survey has highlighted that a majority of policy owners that their insurance premiums have already increased in the last one year much before the Insurance Regulatory and Development Authority of India (IRDAI) removed the age limit restriction for buying a health insurance policy.
In April 2024, the IRDAI removed the age limit restriction for buying a health insurance policy. Before this, those above 65 years of age were not allowed to purchase a health insurance policy. The IRDAI also reduced the waiting period from 48 months to 36 months to start health insurance coverage for pre-existing medical conditions.
The IRDAI notification: “Insurers may design products specifically for senior citizens, students, children, maternity and any other group as specified by the Competent Authority. Insurers shall endeavor to offer coverage for persons with all types of existing medical conditions.”
The insurance regulator also updated the definitions of the pre-existing condition and moratorium period (MP) in health insurance policies. The waiting period for pre-existing disease (PED) coverage in health insurance policies has been reduced from four years to a compulsory three years, the moratorium period has been shortened from 96 to 60 months.
The survey by LocalCircles stated that of the 11,000 health insurance policy owners who spoke out, 52% indicated that their premiums have increased by over 25% in the last 12 months.
In fact, 21% of health insurance policy owners indicated that the premium increase was 50% or more in the last 12 months, while 31% indicated that it has risen by 25-50%.
The remaining 31% indicated an increase of 10-25%, while 2% indicated a 0-10% increase in premium rates; 15% denied any increase in premium as it “was same as
last year”.
A comparative study was also done by the survey researchers with their own 2022 survey about personal health insurance.
“The personal health insurance policyholders are deeply concerned with a significant rise in premium in 2024 after already experiencing high double-digit increases in the last 2 years. While on the premium front, the insurance companies want a hefty increase each year, the claims processing continues to be inefficient with 1 in 2 who file a health insurance claim struggling. It is time IRDAI steps in to rationalize the increase in premiums along with processing of claims so health insurance becomes citizen-centric,” the survey noted.
IRDAI new norms
In the recent notification, the insurance sector regulator said that insurers should ensure that they offer health insurance products to cater to all the age groups.
Health insurers have been asked to cover all types of medical conditions in a patient and not exclude certain “pre-existing” ailments.
IRDAI noted that the premium shall remain unchanged for the policy term. Insurers may offer the facility of premium payment in instalment.
Insurers may devise mechanisms or incentives to reward policyholders for early entry, continued renewals, favourable claims experience, and preventive and wellness habits and disclose upfront such mechanism or incentives in the prospectus and the policy document.
Provided that what is proposed to be covered as part of wellness and preventive habits be clearly defined in every product.
Last survey
Earlier in a survey, LocalCircles noted that almost four out of 10 patients faced hurdles to get their health insurance claim. As per the survey, 43% of health insurance policyholders, who filed a claim in the last 3 years, struggled to get the money or settle payment dues at a hospital after treatment.
The general insurance policy owners struggled the most in getting health insurance claims processed compared to motor or other insurance policies.
The policyholders noted that challenges they face include rejection of claims, partial amount approvals, and longer time to settle hospital bills.
The survey noted that six major issues faced by policyholders include lack of full disclosure about exclusions and eligibility for claims in their policies; ambiguity in contracts due to the use of technical jargon and complex words; claims rejected due to pre-existing disease; eligibility other than the preexisting disease and crop insurance rules tied to the scheme.