Only a few years ago, health insurance essentially catered to young and healthy individuals, who gained from the lowest premium, highest acceptance, and wide range of features available to them. Since then, both the insurance industry and industry regulator have innovated on product features to deliver health insurance to a wider cohort of population.

While two recent notifications have relaxed age barrier and PED (pre-existing disease) barriers, maternity care and cover has advanced as well. We write on the incremental changes that policyholders should note which will help them access healthcare insurance even if they are not young and healthy adults.

Maternity, pre-natal and 90-days

A host of factorsmade maternity care much more demanding in the previous decade. Advancements in medical science allowing detection and treatment in both the mother and the child, increasing frequency of c-section procedures and painless labour procedures, lifestyle diseases and rising chronic conditions’ influence on motherhood and large offering of boutique care facilities have increased the risks and costs of maternity.

Parallelly, insurance offering has also advanced. The waiting period specifically for maternity used to be around three years earlier. Now it is possible to lower it to nine months in new plans. The cover amount hovering around ₹25,000 per procedure has increased to ₹1 lakh in new plans. Most importantly, in plans focussed on maternity, pre and post post-natal care is now a comprehensive package. For instance, post-natal care extends to a period of 90 days, which covers risks for the newborn including neonatal jaundice, a common occurrence. The first year’s vaccination costs up to ₹10,000 are also covered. These plans can cost ₹8,000-₹10,000 per year for ₹5 lakh insurance.

PED reduction

Policyholders with chronic conditions now have more reason to subscribe to health insurance. Chronic conditions, including diabetes, asthma, heart and kidney diseases, and high blood pressure, now face shorter waiting period of three years compared to four years earlier. Even claims that are complicated by PED or resulting from PED may be reimbursed on a case-to-case basis.

Even though the regulator may have notified a shorter waiting period, a few health policies had moved to shorter waiting periods already – three, two, one or day one coverage, by way of an add-on rider or by the basic feature of the policy itself. As health insurance policies are yearly contracts, existing policyholders can expect a PED waiting period (if relevant) shortened by a year in new contracts.

Even the moratorium period has been reduced to five years, from eight years earlier. This is a period after which, no health insurance policy can contest a claim on grounds of non-disclosure or misrepresentation. After five years, policyholders’ bargaining power increases as the insurer cannot reject a claim on disease grounds. This includes ported policies as well, which implies that the functionality is not lost even as policyholders port their policy to better offerings.

Age barrier

Earlier, health insurance could insist on an age-based cut-off for issuing insurance. . In a notification dating back to 2017, for instance, IRDAI mentions that ‘all health insurance policies shall ordinarily provide for an entry age of at least up to 65 years’. With seniors being the group that benefits most from insurance, this was the insurmountable wall for many senior citizens who were beyond the cut-off age. IRDAI’s another recent notification ensures that insurers should now offer health insurance products to all age groups without age limitations.

This should drive awareness that health insurance is meant for the elderly also and increase the penetration as well which, in the long run, can improve pricing.

Dr. Santosh Puri, Senior Vice-President, Health Product & process at TATA AIG General Insurance, states that the current senior citizen population, which stands at 12-15 crore, can double by 2050. Thanks to the timely move by the regulator, senior citizens of all ages with disposable income can insure their health and in the process have access to choicest features while doing so. However, while insurers can no longer limit policies or even riders based on age, it must be mentioned that underwriting (selection or rejection of application and pricing) is still the prerogative of the insurer.

The industry has been proactive in this space as well. Even before the regulator intervened, not only were elderly citizens able to access insurance, but value added features were provided as well. TATA AIG’s Elder Care, for instance, offers personal health care manager for scheduling appointments, medical care at home and other support functions.

This policy should cost around ₹40,000 for a 65-year-old male with further additional costs based on PEDs. While initial cost may seem high, the ability to access a safety net with features that improve durability is a big benefit.

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