In a significant move to protect senior citizens from escalating healthcare costs, the Insurance Regulatory and Development Authority of India (IRDAI) has issued new regulations limiting annual health insurance premium increases to 10% for elderly policyholders. This directive, announced on January 30, 2025, comes in response to widespread complaints about excessive premium hikes, with some insurers reportedly implementing increases of up to 100%.

 

The regulatory framework requires insurance providers to consult with IRDAI before implementing any premium increase exceeding 10% or withdrawing health insurance products targeted at senior citizens. This protection is particularly crucial given India's demographic reality, with approximately 138 million seniors, of whom 40% live with disabilities and 75% manage chronic illnesses, according to the Longitudinal Ageing Study of India.

 

Insurance experts highlight the significance of this regulation in addressing the financial burden on seniors. With medical inflation running at 14% annually, many elderly individuals have struggled to maintain their health coverage as premiums became increasingly unaffordable. The new directive also encourages insurers to standardize hospital empanelment and negotiate package rates similar to the Pradhan Mantri Jan Arogya Yojana (PMJAY) model.

 

Industry professionals note that while this regulation provides much-needed relief, challenges persist in the senior health insurance market. These include limited availability of coverage options and restrictive conditions for pre-existing conditions. Some experts suggest that additional measures, such as reducing the 18% GST on health insurance premiums, could further improve accessibility for senior citizens.

 

The circular mandates insurers to publicize these protective measures widely and implement standardized hospital networks, aiming to create a more sustainable and accessible health insurance ecosystem for India's elderly population. This regulatory intervention represents a balanced approach to protecting senior citizens while ensuring the insurance industry's stability.