How Does Medical Inflation Impact Senior Citizens’ Health Insurance?

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Medical inflation significantly jeopardises the financial stability of senior citizens, compelling them to pay more premiums, limit policy benefits, and erode the value of health plans. The continuously rising healthcare expenditure in India by 12-15% each year puts a financial burden on the senior citizens.


Impact of Medical Inflation on Senior Citizens’ Health Insurance


Higher Insurance Premiums


As medical expenses rise, so do insurance premiums. Senior citizens are already at a higher risk age group, and with the increasing inflation in healthcare costs, premiums can be even higher.


Expensive Hospital Treatments


Visits to private hospitals have seen a significant rise in the price of surgeries, stay in the ICU, consultations with specialists, etc. Hospitalisation, even for a short period of time, can be severely expensive for older adults.


Lower Value of Existing Coverage


Older health insurance plans might no longer offer sufficient coverage. If the policy was taken out years ago with a low sum assured, this may not be adequate to pay for the present expenses for treatment.


More Out-of-Pocket Spending


A significant number of seniors cover some of the treatment costs using their own money. Rent for the room, co-payment, and exclusions can add to direct costs for hospitalisation.


Cost of Chronic Diseases


Some medical issues, such as diabetes, arthritis, hypertension, and heart disease, need to be treated regularly. Medical inflation means that the price of medicines, tests, and doctor consultations increases annually.


Need for Super Top-Up Plans


A lot of families today purchase super top-up plans to raise coverage at a lower price. They come into play if the cost of hospitalisation goes beyond the base policy amount.


Impact on Retirement Savings


As healthcare costs continue to climb, these expenses can drain one's assets very rapidly. If insurance coverage is not adequate, one major surgery or critical illness can have an impact on years of savings.


IRDAI Protection for Senior Citizens


To enhance access to health insurance for elderly people, the IRDAI has issued rules. There should be no age restrictions on policies, and they should be provided on a lifelong basis.


Mitigating the Inflation Impact


Senior citizens should apply a series of structural measures to be able to adjust to the inflationary forces and secure their retirement savings:



  • Secure Super Top-Up Plans Early


Instead of upgrading their base policy, seniors should purchase a super top-up policy with the same deductible that their base policy would have.



  • Prioritise No-Claim Bonus Protections


Check policies that provide secured NCB benefits or inflation-linked sum insured escalation – policies that will automatically increase the coverage without having to pay more premium in the nonclaim year.



  • Leverage PPN Cashless Hospitals


Insurers agree on a set of discounted packages with network hospitals. Having cashless treatments means that the hospital can't charge the patient retail walk-in pricing, as the policy's sum insured will not run out quickly.


Final Thoughts


Medical inflation is a real burden on the finances of the elderly. Having a decent health insurance plan that has sufficient coverage and is renewable for a lifetime can offer more financial security in the senior phase.