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Exorbitant health insurance premiums to take a toll on senior citizens

The last few months have been fantastic. For us in the health insurance industry, things were very confusing. On the one hand, Covid-19 has us all faced with the harsh reality that the future is unpredictable, the risk of hospitalization, and very real high medical costs. It has become extremely important to prepare for such risks, especially on the financial front, by making smart investments in health insurance.

In this direction, I have been encouraging young people to get adequate health insurance coverage before they get sick or grow up. They will have to quickly update their document covers or they may lose the window.

On the other hand, I also spoke with some of the elderly and their families, while discussing the recent increase in health insurance premiums, especially the effect on the older generation; I wonder if it makes sense for them to invest 50,000 rupees for 1 rupee. Annual insurance policies for as little as 3-5 lakhs. Basically, they will pay roughly 20 to 25 percent of the coverage amount as a bonus each year.

Together, these attitudes led me to a very interesting question that many financial advisers and health insurance buyers are now discussing.

Does it make sense to invest early and pay your life insurance premiums, if you need to drop coverage in old age, when you need it most, because premiums have become so expensive?

Why isn't senior health insurance working, especially after they've patiently invested in your plans for decades? And if it continues in this way, how will older people finance their health care in the absence of affordable and accessible public health infrastructure? What can he do?

Solution from A to Z.

There is no doubt that this problem is complex. This is exactly why the solution is also rolling out to various industry silos, which will need to collaborate together and create an ecosystem that works for seniors.

Multilevel collaboration between the health and insurance sectors will be needed to develop a viable solution that truly meets your needs. This is what all industry sectors can do to ensure that renovations are not a surprise to customers.

First, the healthcare industry

One of the main factors that contributed to the surge in health insurance premiums last year was the surge in health care costs, following COVID-19. People of all economic classes have seen unprecedented bills during the pandemic, for both COVID-19 related and unrelated treatments. While at first it might seem that such a high rate only affects those who pay with their own money, that is not exactly the case.

In fact, the insured population will see the lasting effects of runaway healthcare bills, in the form of higher lifetime premiums. This is a direct result of insurers offsetting higher expenses this year, as well as estimating significantly higher healthcare costs in the wake of COVID-19. To mitigate this trend, there is an urgent need for the healthcare sector to implement strict billing regulations and standardize costs effectively.

With better regulation and strict restrictions on how hospitals compile standard procedures, the burden on the insurance industry will gradually decrease, and that will translate into smaller increases in premiums, starting next year. 

Second: Insurance companies

I recently spoke with an insurance client, a senior citizen who was baffled by a strange five-fold increase in insurance premiums over a two-year period. The first rebound occurred as a result of coverage expansion (driven by recent IRDAI regulation) and inflation. The second increase came when their current product was recalled and they had no choice but to switch to a different, more expensive plan or lose the limit entirely.

After retirement from service and limited earning potential, this increase severely affected the client's financial security. What made it worse was the uncertainty that came with this price increase. There was an immediate loss of trust in the insurance company, as well as the ecosystem in general, and a sense of deception by the very system in which they had invested for several years.

Restoring that trust will require a paradigm shift in how the insurance industry works. If companies want to stay with the customer and their business, they will need to provide them with an idea of ​​how their premiums will change in the future, perhaps over a decade, if not in the short term. This can provide them with some guarantees and they can plan their finances accordingly.

Additionally, insurance companies must actively invest in educating younger generations about the need to invest in insurance. As your customer pool gets younger, the burden on your older customers is likely to decrease. Maintaining a healthy percentage of customers is less likely to claim the most likely, a surefire way to ensure that the cost burden is spread evenly, and does not affect seniors unreasonably.

Finally, there must be some facility in cases where the insurance company discontinues the products. Moving a customer to a similarly privileged network, or working with other insurers on the option of moving smoothly, can help the customer stay safe in caring for their health care interests.

Finally, the government

One of the best ways to reduce the burden on customers and the insurance industry is to improve public health infrastructure and make high-quality, affordable health care available to all families.

Today, state health insurance is available to poor and low-income families. And the wealthy classes will not need health insurance. This excludes the middle class, which often faces the brunt of major changes in the industry. This is the category whose needs must be met.

The change could begin with the reduction of taxes on insurance products that today are a basic necessity for the middle class. Today, there is a GST of 18 per cent on health insurance (compare that to 12 per cent on business class air travel), which means that anyone older who pays an annual premium of Rs 50,000 must pay a additional tax of 9,000 rupees. Goods and services This is ridiculous and needs to be reviewed with some degree of urgency.

It is definitely a long request. These processes take time. But every major change begins with a simple idea, an idea to solve a problem. And we want that change to start today.

It's the only way to help seniors get the quality health care and trust they deserve. Rebuild trust, from scratch.