Insuring the future: On health insurance and a wide demographic of citizens
While broadening eligibility, health insurance must be made affordable
The Insurance Regulatory and Development Authority of India (IRDAI), the apex regulator of insurance products, has asked companies to enable a wide demographic of citizens to benefit from health insurance. Most significantly, it directs insurance providers to make health insurance available to senior citizens, as those above 65 are currently barred from issuing new policies for themselves. This is clearly an acknowledgement of demographic changes underway in India. Though India’s population figures have not been officially accounted for since 2011, estimates from the UN Population Fund and experts suggest that India’s is nearly level with China and may have surpassed it sometime in 2023. The India Ageing Report 2023, which draws from UN projections, estimates that India’s cohort of seniors — those above 60 — will increase from about 10% of the population (149 million in 2022) to 30% (347 million) by 2050. That is more than the current population of the U.S. Several of the most developed countries already have their senior demographic (65-plus) ranging from 16% to 28%. That is already precipitating considerable worry within these populations on access to health care, affordable medicine and appropriate care-giving infrastructure to support them. Some of these economically developed countries have government-funded public health systems and others are entirely dependent on private health care, with cost being a significant determinant in access to quality care. In many of these countries, there is no entry barrier to health insurance policies, though, following principles of actuarial economics from centuries ago, health insurance gets progressively, and sometimes exponentially, more expensive as age advances.
Already the small, single-digit percentage of India’s economic elite can afford the equivalent of “family floater” plans that take care of individuals and their parents at a cost lower than what individual senior-citizen health insurance would cost. If the only effect of the IRDA’s recent circular is to provide many more unaffordable health insurance policies, it would be equivalent to admiring the icing on an inedible cake. Much has been made of the next two decades being critical to India’s future, on the reasoning that this is the time that India must reap its ‘demographic dividend’. This is premised on a large proportion of the workforce moving out of agriculture and inevitably followed by a breakdown of the traditional care-giving structure for the aged. The experience in several southern Indian States is telling. Thus, broadening the eligibility of health insurance should be accompanied by a massive upgradation of affordable health care.