Over the past few years, there has been a growing awareness among individuals regarding health insurance. Furthermore, following the Covid-19 pandemic, there has been a significant surge in the number of people purchasing health insurance. It is now imperative for everyone to obtain a health insurance policy that covers their entire family. Particularly, if there are elderly parents residing in your household, the importance of obtaining health insurance becomes even more pronounced. This is primarily due to the elevated risk of various ailments associated with old age. By having health insurance, one can avoid incurring substantial hospital expenses during the treatment of such illnesses.

                                                                                                                                                         Subas Tiwari                                                                                                                                                                            Before purchasing a health insurance policy for your elderly parents, it is crucial to familiarize yourself with certain aspects of health insurance. This understanding will enable you to address any issues that may arise when dealing with Senior Citizen Health Insurance.

Why analyze Health Insurance Policy for Senior Citizens?

Senior citizens must get health cover to evade health problems and avoid financial shock. Many aged individuals are worried about the spiraling cost of healthcare and what havoc it could do to their financial security. With medical inflation growing at 15% per year, the cost of procedures like angiography and gall bladder removal has increased tremendously, a report released by KPMG and Assocham noted. Around 38% of the elderly respondents to the survey in India ranked health and financial insecurity among key fears. Low insurance penetration in India means many senior citizens lack the resources to fund treatment.

GROUP INSURANCE-Employer’s Coverage

The need for a health insurance cover is all the more necessary for those who enjoyed the health cover under the ‘Group Insurance Scheme’ floated by the insurance companies under a tie-up with their organization (both government-owned & private sector companies). Till their retirement, the employees/officers were covered under this Scheme, but the cover ceases abruptly immediately after their superannuation. Then the employee gets the ‘senior citizen’ tag & with it comes the financial limitation to live off his pensionary benefits & the sudden ‘disappearance’  of his health cover causing him anxiety.

We have also come across many instances of serving employees not bothering to take any sort of health cover during their service years especially in the un-organized sector & under the self-employed category.

Senior Citizen Health Insurance- a necessity?

Senior citizen health insurance is a necessity especially when you are planning to retire or already retired and carry on life on pension or interest income from savings. A sudden medical emergency can result in a financial crisis other than health setbacks. To avoid this, it is prudent to take a comprehensive senior citizen medi-claim policy.

According to the guidelines by IRDA, every health insurance provider has to mandatorily offer health coverage to individuals’ up to 65 years of age. However, most of the Health insurance Companies are offering health cover to senior citizens aged more than 65 years of age & even up to their platinum years. These guidelines will not only help individuals get coverage at later stages of their life but will also allow them to shift insurers (portability) in case they are not satisfied with their current health insurance provider.

Consumer VOICE readers might be aware that Consumer Voice had carried out a story on the same subject in May 2014. We at the BFSI Desk of CV wanted an updated information as there have been subtle changes brought out by the Health Insurance Companies under the regulatory control of IRDAI. Hence this story in the current issue.

Sum Insured (Health Insurance cover)

Based on the financial capacity/affordability of the insured, we have opted for a Rs.3, 00,000 health insurance policy, as market indices indicate that an average man/woman above 60 years of age would be able to meet his medical treatment (excluding major lifelong diseases) within this amount, if he does not suffer from any serious medical complication at the time of taking a health insurance policy.

Major inclusions in a Senior Citizens Health Insurance Policy

• In-patient Treatment

Covers medical expenses for Hospitalization due to an illness or accident.

• Hospitalization Cover

 Expenses incurred as a patient after admission of more than 24 hrs. The expenses include room charges, doctor fees, minor surgery cost, cost of medicine and drugs, etc.

• Day care

Expenses which arise from use of special equipments or procedures like chemotherapy, dialysis, etc.

• Pre and post of hospitalization

Medical expenses for pre and post of hospitalization; but the number of days it is made available before/after hospitalization will vary across insurers.

• Domiciliary Treatment

The medical expenses incurred by an insured for availing medical treatment at his/her home which would otherwise have required hospitalization (non-admission due to non-availability of beds or that the patient cannot be moved due to his poor medical condition duly certified by the Hospital).

• Organ Donation

These are medical expenses on harvesting the organ from the donor at the time of such organ transplants, but do not cover the cost of the organ itself.

• Co-Payment

This term means that this is a cost-sharing requirement where the policyholder/insured will bear a specified percentage of the admissible claim amount. However, this does not reduce the sum insured. It’s a kind of margin money the patient brings in while getting admitted for cashless treatment. This is often resorted to by health insurance companies as the cost of treatment for senior citizens could be high & this clause ensures that at least a part of the cost is picked up by the insured.

Tax Benefits to Senior Citizens on Health Insurance

A senior citizen health policy covers medical expenses as well as helps you to get tax exemption under section 80D of the Income Tax Act, 1961. You are eligible for an income tax rebate of up to Rs 50,000 if you hold a mediclaim policy for senior citizens for your elderly parents.

An additional tax rebate of Rs 5,000 can be earned on payments made towards preventive health check-ups every financial year. Additionally, you can also get a rebate of up to Rs 1 lakh if the senior citizen undertakes a critical disease treatment.

In case you are an earning senior citizen and are also paying the health insurance premium on behalf of your son or daughter, then you can avail an additional income tax rebate of Rs 25,000. This means that you can avail tax deduction of up to Rs 75,000 in a financial year under section 80D.

Major exclusions in the Policy

• Cosmetic surgery
• Dental Treatment
• Aesthetic treatment
• Plastic Surgery
• Weight Reduction procedures
• AIDS/ Sexually Transmitted Diseases (STD)
• Stem Cell Procedures
• Robotic Surgery

Difficult terminologies explained

• Restoration of Sum Assured

In case of hospitalization, once your claim for a particular disease/ailment is fully exhausted, then you can invoke this basic cover for any other ailment within the same policy period

• Day Care Cover

They are important for the consumer as it reduces his cost or covers additional medical expenses but is not going to alter his options in a major way while the senior citizen chooses a policy.

• Domiciliary treatment

These are the expenses incurred in case patient is being treated at home due to non-availability of beds in hospital or if the patient is not in a medical condition to be moved to a hospital.

What Senior Citizens look for in a Policy to make it attractive to them?

• To make it an attractive buy, the health insurance companies can tinker with the Pre Existing Disease waiting periodto 1 year minimum, as at their age, it is foolish to expect a very robust health profile & most of them would be carrying some ailment or the other on them, which would be as a result of the age factor & the nature’s way of decay.
• Out Patient treatment(OPD) of ailments not categorized as lifelong diseases  and also not requiring hospitalization could be included as one of the basic covers or add-on covers with additional premium.

IMPORTANT HANDLES OF THIS STORY

• Go in for minimum waiting period for PED
• Go for minimum co-payment
• Go for top-up policy within the same insurance policy or a different insurer for lifestyle diseases

The following table shows the various senior citizens health insurance plans that you can buy

Product Info sourced from Policybazaar