India’s ageing population is crying for a new health insurance model

by Rahul Devi

Title: Addressing the Challenges of India’s Ageing Population: A Call for Robust Regulation

Introduction
India is witnessing a rapid increase in its ageing population, and it is crucial to implement robust regulations to support this vulnerable group’s healthcare management and financing. The India Ageing Report 2023, released by the United Nations, predicts that the number of individuals aged 60 years and above in India will double to 347 million by 2050, accounting for 20.8% of the population. This trend necessitates immediate action to ensure the well-being of the elderly.

The Need for Better Health Insurance Models
With one in five Indians projected to become elderly by 2050, it is imperative to develop new health insurance models to cater to their specific needs. Unfortunately, many insurance providers tend to deny coverage to senior citizens due to it being deemed a loss-making portfolio. The Insurance Regulatory and Development Authority of India (Irdai) has taken some steps in this direction by mandating insurers to allow entry into health insurance schemes until the age of 65 and record reasons for denial. However, challenges persist as consumers continue to face difficulties in obtaining coverage.

Enhancing Consumer Protection and Service Quality
To address these challenges effectively, the Irdai must enhance consumer protection, promote competition, lower premiums, and improve service quality in the health insurance sector. Additionally, the regulator should ensure swift integration of insurers and healthcare service providers into the National Health Claims Exchange. This platform would facilitate faster claim settlements and alleviate the hassles faced by policyholders, particularly the elderly.

Improving Underwriting and Encouraging Early Policy Purchase
Integrating hospitals, healthcare service providers, third-party aggregators, and insurers onto a single platform for seamless exchange of data and information can promote judicious underwriting. Realistically priced policies can be underwritten only when insurers have access to accurate and comprehensive data. Furthermore, advocating for the young population to purchase health insurance early on minimizes the risk of denied coverage as they age.

Addressing the Financial Insecurity of Low-Income Elderly Individuals
A significant concern is the large majority of the elderly with low income levels who are unable to afford healthcare or health cover. Out-of-pocket expenses can exacerbate their financial insecurity, disrupt access to healthcare, and potentially push them into poverty. Publicly-funded health insurance for the elderly, while promising, suffers from reliance on a poorly regulated private sector. The solution lies in strengthening and strictly enforcing regulations while simultaneously improving the quality of public health services.

Introducing Innovative Models to Align Incentives
Traditional insurance models often face conflicts of incentives, with private hospitals inflating costs and insurers attempting to minimize payouts. To align the interests of insurers, healthcare providers, and patients, a new model can be established in which healthcare providers agree to provide expert care for a per-capita fee paid upfront. Actuaries can determine this fee, and it would be disbursed directly to the care provider by the insurance buyer. This model removes the incentive for care providers to inflate costs and ensures per-capita income-based contributions from the lower-income groups.

Conclusion
India needs proactive measures to address the challenges posed by its rapidly ageing population. The government, along with regulators like the Irdai, must prioritize the development of robust regulations and innovative healthcare financing models. By improving access to affordable health insurance, strengthening public health services, and aligning incentives, India can ensure the well-being of its elderly population and provide them with the care and financial security they deserve.

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