Facing a massive hike in health insurance premiums? Here’s what you can do
Despite IRDAI’s clarifications.
Policyholders continue to suffer as insurers hike health cover premiums citing high claims.
After the insurance regulator-mandate norms on standardization of health insurance exclusions came into force from October 1, 2020.
Several policyholders have complain of huge hikes in premiums.
The Insurance Regulatory and Development Authority of India (IRDAI), however.
Has clarify that that the premium rise due to the change in norms is not beyond 5 percent.
Insurers were permit to change the base premium by up to +/- 5 %.
The originally approve premium rates in order to comply with the guidelines on standardization.
Exclusions as a one-time measure for seamless transition of existing products to ensure viability and sustainability.
By September 30, 2020 premiums increase by up to 5 percent only in the case of 55 out of a total of 388 products.
In addition, five health insurance products saw a premium increase of over five percent.
As per the IRDAI, this increase is due to the incurred claims ratio.
Which is the total claims paid from the net premiums collect during the year.
If the ratio is high, it can make the business unviable, prompting insurers to raise rates.
increase in prices close to 10 percent
Its customers who renew their policies saw their premiums jump over 30 percent.
Premiums of nearly 8 percent policyholders rose by 15-30 percent.
“Premiums increase with age.
Typically, policies have five-year age slabs.
For example, your premium could stay constant as long as you are in the bracket of 30-35 years.
The moment your cross 35 years of age, you move to the next age slab.
Your premium will go up in line with the pre-define premium grid.
In a majority of the cases, this is the most common cause of premium increases.
Besides the new norms and adverse claim ratios.
COVID-19-driven rise in healthcare costs.
Regular medical inflation have also play a role in inflating overall health premiums.
Medical inflation is soaring and hospital pricing is not subject to any regulatory controls.
Insurers are trying to fix package rates, but that hasn’t help either.
When rates are fix in this manner, hospitals simply make the patients pay up the balance.
Old customers, new products
There could be another reason for the exorbitant hike in rates in some cases:
Replacement of your policy with a new one after withdrawing the earlier cover.
Policyholders are not given the choice of continuing with the existing policy in such cases.
Money control has flag off this issue.
Which is a great cause of consternation to policyholders, earlier too.
“Some insurers have discontinued their existing products.
Offer the migration option to their policyholders.
This is not something that got cover in IRDAI’s clarification.
Here, the new product could be an improve avatar of the older one with new features.
But for policyholders, it could mean much higher premiums.
Irrespective of whether they value the new benefits or not.
Limited choices for policyholders
For policyholders, particularly those who have been paying their premiums over the long-term.
Such premium increases can come as a debilitating shock.
More so because porting – that is, moving to another product while retaining.
The pre-existing diseases waiting period credit – will not be easy at that age.
Since senior citizens are likely to be suffering from co-morbidities at that age.
Other insurers will be reluctant to take them on board at reasonable premiums.
The changes have to come at the ecosystem level.
Senior citizens have limited choices.
Creating an adequate health fund is an option you can discontinue.
Your policy only if you have enough reserves.
Are capable of ‘self-insuring’ yourself over the long-term.
However, you have to bear in mind that it is difficult to predict the increase in the cost of various treatment procedures.
That is, it is not easy to estimate the size of a sufficient healthcare fund.
Also, you must remember that your health insurance sum insured gets replenish every year even if you make a claim.
Which will not be the case with your health fund once it gets used up in, say, one or two years.
The corpus, however, can also come in handy to take care of any deductions.
That is, part of the claim amount not pay for by the insurer.
From your hospitalization bill.
It will also help if you are in older age groups and do not have any insurance cover at all.
Depending on your affordability, requirements.
What is being offer, you can consider such plans.
Create your healthcare fund as a back-up to make good any shortfall due to lower sum insured or co-pay.
Room rent restrictions.