IRDAI Issues Directive to Limit Health Premium Hikes for Seniors
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Synopsis
The IRDAI has directed health insurers to limit premium hikes for senior citizens to 10% annually amid significant increases across age groups, some reaching up to 200%. This move aims to protect vulnerable seniors from steep insurance costs.
Key Takeaways
- IRDAI limits premium increases for seniors.
- Insurers can't raise rates by more than 10%.
- Senior citizens are a vulnerable group.
- Consultation with IRDAI required for major changes.
- Call for GST reduction on insurance premiums.
New Delhi, Feb 7 (NationPress) As health insurance providers have enacted significant premium increases across various age groups — with some companies raising health premiums by as much as 200 percent — the Insurance Regulatory and Development Authority of India (IRDAI) has mandated that they refrain from increasing premium rates for senior citizens by more than 10 percent annually.
In a formal notification, the regulatory body highlighted the substantial hikes in premium rates for certain health insurance products available to individuals aged 60 years and above.
The regulator noted that senior citizens form a vulnerable demographic with limited income sources, making them particularly susceptible to the impact of sharp increases in health insurance premiums.
“Insurers must consult the IRDAI if they intend to raise premiums by over 10 percent,” it further stated. Additionally, insurers are required to seek the IRDAI's approval before withdrawing individual health insurance products.
The notification also urged insurers to enhance their network of hospitals and negotiate package rates similar to those under the Pradhan Mantri Jan Arogya Yojana.
This scheme standardizes hospitalization charges through central negotiations for package rates across different hospitals.
The IRDAI's circular aims to strike a balance between the interests of insurers and policyholders.
There has also been a persistent call for a reduction in GST on life and health insurance premiums. It is anticipated that lowering GST on insurance premiums would alleviate the tax burden for both insurers and policyholders.
The Group of Ministers (GoM) has compiled a comprehensive report on GST decisions concerning various insurance types, and the exemption on premiums paid for policies will be reviewed at the upcoming GST Council meeting.
