IRDAI Caps Health Insurance Premium Hike for Senior Citizens at 10%

New Delhi: In response to numerous complaints about steep hikes in health insurance premiums for senior citizens, the Insurance Regulatory and Development Authority of India (IRDAI) issued a new directive on Thursday.
The regulator has mandated that insurance companies cannot increase health insurance premiums for senior citizens (aged 60 and above) by more than 10% annually.
This directive takes immediate effect. In a statement, IRDAI said that if any insurer wishes to raise premiums for senior citizens by more than 10% in a year, it must seek prior approval from the regulator. Additionally, if an insurer plans to withdraw any individual health insurance products for senior citizens, it will also require prior approval from IRDAI.
The regulator noted that during routine monitoring of insurance products in the Indian market, it was observed that some health insurance products for senior citizens had seen excessive premium hikes.
IRDAI stated, "Senior citizens are among the most vulnerable age groups, with limited sources of income. Rapid increases in health insurance premiums disproportionately impact this group. This issue is under the regulator's watch and is a matter of concern." Furthermore, insurance companies have been directed to widely publicize the various measures taken for the benefit of senior citizens when offering health insurance products.
IRDAI has also instructed insurers to take necessary steps for general hospital empanelment and negotiate package rates on the lines of the Pradhan Mantri Jan Arogya Yojana (PMJAY). The regulator clarified that health insurance premium rates primarily depend on the estimated claim amount and the expenses incurred by the insurance company to acquire and service policies.
The claim amount is often based on the charges levied by hospitals for various treatments and surgeries. IRDAI highlighted that under PMJAY, hospitalization costs are centrally negotiated for package rates, leading to standardization across hospitals. However, such standardization is absent in health insurance products, resulting in rising hospitalization costs and higher claim payouts by insurers.
With this new directive, IRDAI aims to provide relief to senior citizens from escalating health insurance costs and hold insurance companies accountable.