INDIA: Seniors May Now Enjoy Healthy Ageing - No Age Bar

HYDERABAD, Andhra Pradesh (The Economic Times), November 6, 2007: All senior citizens, irrespective of age, health condition or claims history, will have access to health insurance, if the Insurance Regulatory and Development Authority (IRDA) endorses a recommendation made by a high-level panel on health insurance. The only exception will be those who are diagnosed with terminal illness at the first time of entry. The panel, set up by IRDA, has made a number of recommendations, including making all health insurance policies portable and giving a clear definition of pre-existing diseases in insurance policies. It has also pitched for a progressive tax concession for health insurance to enable taxpayers with a lower income to get a proportionately higher benefit. Crediting at least 50% of the service tax on all health insurance schemes to an insurance pool to be created by Irda to deal with high risk insurance cases of senior citizens also features in the recommendations. It has also made a case for having an apex regulatory authority for hospitals and other healthcare providers. The committee, headed by KS Sastry, has said the regulator should mandate licensed health insurers to provide all senior citizens access to health insurance, implying universal coverage. This should come as a big relief for several senior citizens organisations who have been complaining about the denial of fresh insurance covers and surging premiums. “Senior citizens should be allowed to enter the health insurance system up to 65 years of age — or higher — at the discretion of the insurer. If they do so, they should be given guaranteed renewal of their insurance without any upper age limit. As a transitional measure — since guaranteed access is being provided to senior citizens for the first time — there should be no upper age limit for entry or renewal for a period of three years from the date Irda issues the regulations,” says the panel. According to it, a senior citizen holding a health insurance policy under the existing dispensation should not be compelled to shift to any other policy under the new guidelines. They should not be denied renewal of the existing policy as well. The panel is of the view that apart from traditional insurance policy, Irda should also encourage each insurance company to offer a separate policy based on the concept of healthy ageing. Here, the premiums would be determined based on the health condition of the insured. It has also set a wider role for the regulator, saying that IRDA should evolve sound principles of premium rating based on health condition. It should also organise an insurance pool to underwrite high risk cases for senior citizens above 75 years and those in the age-group of 65-75 years. The panel reckons that insurers can offer a variety of plans to senior citizens to suit market conditions. Companies can also innovate and offer plans specifically suited to senior citizens like capturing the lump-sum retirement benefits and providing health insurance for long years. The goal is to increase penetration, even while making the health insurance business competitive and commercially viable. Norms have been recommended for policy renewals: the insurer can load the age-based premium to take into account the cumulative history of the insured from the date of issuance. Such loading should not exceed the percentage by which the cumulative claim ratio exceeds 75%. If the claim is less than 75%, the insurer should offer a discount. But the discount or loading should not exceed 25% of the age based premium. The committee has made its recommendations, keeping in view the National Policy on Older Persons adopted by the government. Right now, only 2% of the population has a health insurance cover. Public expenditure as a proportion of total expenditure on health is only 13% in India compared to 23% in Pakistan. Health spends as a proportion of GDP hovers at around 5% in these two countries compared to 10% in developed countries. According to one estimate, India is expected to have 173 million senior citizens by 2010. However, in the absence of social security cover, a large chunk of the health costs are borne by citizens themselves. By Hema Ramakrishnan & Mayur Shetty Copyright © 2007 Times Internet Limited.