A recent survey by LocalCircles revealed that many policyholders have seen their insurance premiums rise over the past year, even before the Insurance Regulatory and Development Authority of India (IRDAI) lifted the age limit for purchasing health insurance.
This suggests that insurers may have adjusted premiums in advance of the regulatory changes.
According to reports citing experts, the recent decision by the Insurance Regulatory and Development Authority of India (IRDAI) to assist senior citizens and individuals with pre-existing conditions is anticipated to cause a 10-15% increase in health insurance premiums.
In April 2024, the Insurance Regulatory and Development Authority of India (IRDAI) removed the age limit restriction for purchasing health insurance policies.
Prior to this change, individuals over 65 were not permitted to purchase a health insurance policy. Additionally, the IRDAI reduced the waiting period for coverage of pre-existing medical conditions from 48 months to 36 months.
Experts predict that these changes could lead to a 10-15% increase in health insurance premiums, according to reports.
Here’s a breakdown of the changes by the Insurance Regulatory and Development Authority (IRDA) effective from 1 April 2024:
- **Pre-existing Condition (PED) Waiting Period**:
The waiting period for coverage of pre-existing diseases in health insurance policies has been reduced from four years (48 months) to a mandatory three years (36 months).
- **Moratorium Period (MP)**:
The moratorium period has been shortened from 96 months (8 years) to 60 months (5 years).
- **"No Look Back" Policy**:
During the moratorium period, insurance companies enforce a "no look back" policy, meaning once the moratorium period is over, the insurer cannot deny claims based on pre-existing conditions identified after the initial coverage period.
This move comes at a time when many consumers are facing difficulties in getting their health insurance claims processed.
Nearly one-third (1.6 lakh) of the 5.5 lakh pending consumer complaints received by the Department of Consumer Affairs pertain to the insurance sector, as highlighted during a roundtable on Consumers and the Insurance Sector held last year.
A recent LocalCircles survey, released last week, revealed that 43% of citizens who filed a health insurance claim in the past three years faced difficulties in getting it processed.
Common complaints ranged from outright claim rejections, exclusions, and deductions, to the most frequent issue—delays.
In many cases, patients ready for discharge are forced to wait 8-12 hours on their last day for their insurance claims to be processed, significantly delaying their discharge.
Doctors and hospital owners are also frustrated because patients waiting for insurance claim processing occupy rooms that could be used to admit and treat other patients in need of care.
In response to concerns from health insurance policyholders about rising premiums, LocalCircles conducted a new survey to assess how much premiums have increased over the last 12 months.
- The survey gathered over 11,000 responses from personal health insurance policyholders across 324 districts in India. - 67% of the respondents were men, while 33% were women. - 39% of respondents were from tier 1 locations. - 30% of respondents were from tier 2 locations. - 31% of respondents were from tier 3, tier 4, and rural locations.
52% personal health insurance policy owners surveyed say their premium has increased by over 25% in the last 12 months
The survey asked personal health insurance policyholders about the increase in their annual premiums over the past 12 months. Of the 11,000 respondents:
52% reported that their premiums had increased by more than 25%.
21% experienced a premium increase of 50% or more.
31% saw an increase between 25% and 50%.
31% indicated a rise of 10-25%.
2% noted an increase of 0-10%.
15% reported no change in their premiums, stating they were the same as last year.
In summary, 52% of the surveyed policyholders experienced a premium increase of over 25% in the last year.
A comparative study of survey results shows that the percentage of personal health insurance policyholders experiencing a premium increase of over 25% has decreased from 62% in 2022 to 52% this year. The year 2022 saw significant premium hikes as many insurance companies anticipated another wave of COVID-19 and adjusted their premiums accordingly.
Personal health insurance policyholders are expressing deep concern over significant premium increases in 2024, following substantial double-digit hikes in the past two years.
Despite insurers' annual premium hikes, claim processing remains inefficient, with half of those who file claims facing difficulties. It is crucial for the IRDAI to intervene to rationalize premium increases and improve claims processing to make health insurance more citizen-centric.
The study received 11,000 responses from health insurance policyholders across 324 districts in India.
67% of the respondents were men.
33% of respondents were from tier 1 cities.
30% of respondents were from tier 2 cities.
31% of respondents were from tier 3, tier 4, and rural areas.
The survey was conducted on the LocalCircles platform.
All participants were validated citizens registered with LocalCircles.
Reference:
52% health policy owners say their premium has increased by over 25%. (n.d.). LocalCircles. https://www.localcircles.com/a/press/page/health-insurance-premiums
Rehash/Simran Sethi/MSM