IRDAI Asks Health Insurance Companies to Standardise Premium Rates For Seniors

The Insurance Regulatory and Development Authority of India (IRDAI) has directed insurance companies to adapt measures to standardise health insurance premium rates following the Pradhan Mantri Jan Arogya Yojana (PMJAY) scheme model. This step was taken after the insurance sector regulator initiated a monitoring of insurance products offered in the Indian insurance market. It was observed that there has been a steep increase in premium rates under some of the health insurance products offered to senior citizens.

In a circular that was floated by the regulator it said that, ““Unlike in case of Pradhan Mantri Jan Arogya Yojana (PMJAY) scheme, where the hospitalisation expenses are negotiated centrally for package rates and are thus standardised across various hospitals, there is no such standardisation in case of health insurance products. This is leading to higher hospitalisation costs resulting in higher claims outgo under health insurance products offered by insurers.”

Experts believe that by following a model similar to the PMJAY, the industry can mitigate inconsistencies in hospitalisation costs, leading to better financial management for insurers and making healthcare services more affordable and accessible to policyholders. Additionally, this strategy would fosters closer collaboration between insurers and healthcare providers to ensure fair and efficient service delivery.

The IRDAI directive also emphasizes the need for insurers to actively promote the initiatives being implemented for senior citizens, adding that transparent communication regarding policy benefits and changes will empower customers with the knowledge needed to make well-informed decisions, ultimately strengthening consumer confidence in the health insurance sector.

Source: Financial Express