IRDA brings welcome changes in health insurance rules to make it accessible to more people, especially senior citizens

Insurance Regulatory and Development Authority (IRDA), the regulator for general and non general insurance products in India has brought about changes that aim to make health insurance in India more customer friendly.

IRDA’s new Insurance Products Regulations 2024 require insurers to make two key changes to their health insurance products. One, the maximum waiting period that insurers may impose on claims relating to pre-existing diseases (PED) will now be 36 months instead of 48 months. As most of the health complications that insurance buyers face are likely to be related to PED, the shorter this waiting period the better. Two, IRDA has asked insurers to ensure that they offer health insurance products to ‘cater to all age groups’. This replaces an earlier provision that health policies must provide for an entry age of ‘at least 65 years.’ IRDA’s intent seems to be to make sure that senior citizens are not denied health insurance at a life stage when they need it the most.

Till now, the maximum entry age was fixed at 65 years. The new rule would extend it further. The other provision reduces the maximum waiting period that insurers may impose on claims relating to pre-existing diseases from 48 months to 36 months. Shortening the waiting period will be useful to many policyholders because most of the health problems that they face are likely to be related to pre-existing conditions. Many persons who suffer from severe ailments like cancer, heart or renal failure and AIDS will benefit from the new provision.

Bringing more people under the cover of health insurance is important in a country where the demography is changing and healthcare costs are high. This is also in accordance with international practices. Senior citizens, especially those above 65 years, need health insurance protection the most, but they are barred from buying new policies.

Many wouldn’t have bought policies before 65 as health insurance has come to be recognised as a need only recently. The number of those above 65 will steadily increase in the coming years and therefore it is essential to bring them under the cover of health insurance. The new provision becomes particularly useful because the public healthcare system is inadequate and the private healthcare facilities are costly and unaffordable for many. The traditional social security system that depended on family support is weakening and therefore elderly persons need new ways of protection.

The provision about pre-existing diseases will also be useful because that is one ground on which health insurance companies deny benefits to many. The companies often reject claims on the basis of policyholders’ failure to make full disclosures at the time of buying the policy. This is an area that gives a lot of loopholes for insurers to deny claims.

These need to be set right when rules are framed to make the new provision available to policyholders. Similarly, it must be ensured that policies are not made costly for those above 65 years. That will deny the benefit of the provision to those who most need it. The country’s health insurance system is known for lack of transparency, fine-print and jargon problems and generally being difficult to those who make claims. The new regulations should rectify these issues.