The high cost of health insurance for seniors is often the top reason why its uptake is low. The moment you cross 60 and go out to buy health insurance, you will find the premiums inhibiting and several restrictions coming into play on account of medical complications that typically arise in old age. Even if you have been renewing a regular health insurance policy since you were in your 20s, the premiums will still go up once you cross 60.
However, high costs or increased restrictions should not deter you from buying health insurance, as staying without it can prove to be costlier, given that chronic diseases are more common among seniors. According to the India Ageing Report 2023, published by the United Nations Population Fund (UNFPA) India in collaboration with the International Institute for Population Sciences (IIPS), over 30 per cent of elderly women and 28 per cent of men had one chronic morbid condition, and nearly one-fourth (across both sexes) had more than two morbid conditions.
According to The Longitudinal Ageing Study of India (LASI) 2021, around 75 per cent of elderly Indians suffer from one or more chronic diseases that do not have a permanent cure and require continuous care. These include diabetes, hypertension, hypotension, asthma, arthritis, as well as mental health conditions, such as depression, loneliness, and other age-related psychiatric disorders.
Unplanned medical expenses can severely dent your retirement corpus, affect your regular cash flow, and also force you to compromise on your lifestyle. According to a position paper published by Niti Aayog in 2024, titled Senior Care Reforms In India: Reimagining the Senior Care Paradigm, only 18 per cent of seniors are covered by health insurance and the mean out-of-pocket expenditure in private health facilities is Rs 31,933. It adds that health-related expenses are the most common cause of indebtedness (26 per cent) in urban India. According to the National Sample Survey (NSS) 2017-18, medicines alone account for nearly 70 per cent of out-of-pocket expenditure in non-hospitalisation cases.
What you need to do is play it right so that your health insurance policy remains affordable, ensures maximum coverage, and the sum insured you opt for stays abreast with the 14 per cent annual medical inflation rate.
Let’s look at the challenges you may identify with as well as the strategies that can help you overcome them. Some of these strategies will help you lower the cost of health insurance, while others will help you navigate the complex universe of exclusions to get maximum coverage.
If you still think regular health insurance is unaffordable, at least get registered for Ayushman Bharat coverage of Rs 5 lakh.
The Ground Reality
Premiums Go Up With Age: Premiums go up with age for primarily two reasons. Says Siddharth Singhal, head of health insurance, Policybazaar, an insurance aggregator platform: “When individuals grow older, their health risk increases, which automatically makes them a high-risk profile. Second, premiums grow sharply once an individual crosses certain age bands (45-50, 50-55, 55-60, 60-65, 65+).”
For first-time buyers, the medical condition of the individual at the time of buying a policy can make a big difference to the premiums. Let’s take an example of two 62-year-old buyers seeking a Rs 10 lakh health insurance policy. One has no major medical condition, maintains a healthy body mass index (BMI), and has no history of hospitalisation. The other has diabetes and hypertension, is overweight, and underwent cardiac treatment a few years ago. Although both are of the same age and seek the same cover, the second buyer may need to undergo additional medical tests, may have a co-payment requirement and disease-specific waiting periods in the policy, as well as pay a higher premium due to underwriting loading.
Premiums may also vary depending on whether the buyer smokes, lives in a city where hospital costs are relatively high, or chooses features, such as no room-rent cap, restoration benefits, and a shorter waiting period for pre-existing diseases.
Singhal says the annual premium for a relatively healthy senior citizen below 70 years of age may start at Rs 21,000 for a Rs 5 lakh health insurance cover. “For a Rs 25 lakh coverage, the premium for a 60-year-old and a 70-year-old would be around Rs 35,000 and Rs 63,000, respectively,” he says.
Says Hari Radhakrishnan, spokesperson, Insurance Brokers Association of India (IBAI): “Senior citizens entering the health insurance market late suffer from two handicaps. First, they will have a higher base premium due to their age demographic. Second, senior citizens are likely to have some pre-existing health conditions. Hence, their premiums are subject to additional loading over and above the age demographic loading.”
Limited Coverage Or Exclusions: High premiums lead to another problem—lower cover. The premiums you may be able to afford will only get you a sum insured that may fall short in the face of a serious ailment.
But given the rising costs of surgeries and medical procedures, it is important to have adequate cover. In the example above, we have taken a sum insured of Rs 10 lakh, which may not be enough. For instance, a knee replacement may cost around Rs 2.50-3 lakh per knee in a private hospital, while a bypass surgery may cost about Rs 5 lakh. If a person needs to get both knees replaced and subsequently undergoes bypass surgery in the same policy year, the combined bill could reach Rs 10-11 lakh (actual costs will vary depending on the city, hospital, implant, room category and medical complications). Any amount beyond the available sum insured would have to be paid for by the patient.
If you are buying health insurance before 60, factor in the future cost of treatment—after 10 years if you are buying at 50, after 20 years if you are buying at 40, and so on. For instance, a surgery that costs Rs 6 lakh today could cost around Rs 22.20 lakh after 10 years, assuming an annual medical inflation of 14 per cent.
