February 23, 2014 1 Comment
A more equitable health insurance market is leading to a heavier burden on younger ,healthier policyholders.Many health insurance policyholders have seen their premiums go up 15-35% in this financial year, as insurance companies, including public sector firms, revise their premium rates.
The new health insurance regulations implemented by the IRDA in October last year,including the abolition of claim-based loading and the introduction of the lifelong renewability clause,are some of the main reasons why premiums have risen sharply.The first refers to the practice of increasing subsequent premiums for those who make claims. The lifelong renewability clause is to ensure that older people with health issues continue have access to health insurance.Apart from this, the new health insurance guidelines also allow insurance companies to raise premiums only when a policyholder moves to a new age band. Moving away from claim-based loading and mandating lifelong renewability means that younger people pay more. There is some cross-subsidisation otherwise it becomes impossible for senior citizens to afford health insurance.Most claims come in the age group above 60 years but companies cannot load premium beyond a point for this age group. Read more of this post