Senior Citizen Insurance

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Published in Mint on Feb 06 2017, Written by Kapil Mehta

A few days ago, as I walked from office to the local market for lunch, an elderly lady standing on the roadside started speaking to me. I assumed she was asking for money and quickened my pace. Fortunately, my sixth sense made me turn around and ask her what the matter was. I then saw that she had severe Parkinson’s disease, and her right arm was shaking uncontrollably. She asked for directions to a well-known homeopathy hospital in the area. As I opened up Google Maps to find the shortest walking route, we began talking. The lady had tried to get treated in government hospitals but was unable to get to the right doctors. She decided to give homeopathy a try because it seemed more accessible and affordable. Did she have insurance? I knew what her response would be. As the hospital was a 20-minute walk away, I hailed a cycle rickshaw to take her there.

I can’t stop thinking about this incident. Why was this lady, obviously in her 70s, alone? Why did she not get care in the government hospital? Why could she not afford to go to a private hospital? Why was she not insured? I was dismayed that even if she were insured, Parkinson’s would most likely be excluded. In any case, no scheme or insurer would cover her for the homeopathic treatment she now sought.
Each of these questions is substantial. The support system for the elderly is rapidly disintegrating. A survey by HelpAge India suggests that two-thirds of the elderly are financially dependent upon others, and 90% feel that they are in poor health. A friend, who has spent 2 years building a community of the elderly, tells me that it is a mistake to focus only on physical health. Emotional health is more important. The major issue that seniors face is that they do not feel useful, have little say in family matters and are not respected. Statisticians say that India is a young country, unlike Europe or Japan, but there are more number of elderly people in India than in Japan. Overseas, the old have formed support communities that are powerful. The American Association of Retired Persons (AARP) has a membership base of over 35 million and revenues of over $1.5 billion. The revenue comes from manufacturers and service providers seeking access to the market of retired persons. This revenue is used to take care of the group. If the lady with Parkinson’s was in the US and an AARP member, somebody would have accompanied her to the hospital.
Our government hospitals are in shambles. A doctor working at a leading government hospital in Delhi told me that for expensive medical consumables, such as cochlear implants, they approach charities for support because the internal procurement is cumbersome. I visit the All India Institute of Medical Sciences (AIIMS) once a year for a retina check-up by a leading eye surgeon. I get to see him in reasonable time because I know someone who gets me preferential access. That’s the only way I can bypass the crowds spilling onto the roads and metro station outside the hospital. Smaller health centres suffer chronic shortage of staff and infrastructure. Consequently, seniors have to depend upon private hospitals and doctors. The same HelpAge India report suggests that over 70% of seniors in poor households depend upon private doctors. It is in this context that health insurance is so critical to our infrastructure and well-being.
The quality of our health insurance products has been steadily improving. The insurances available today have standard definitions. Restrictions such as disease caps, waiting periods and pre-existing disease exclusions have come down. However, the focus has remained on hospitalization and allopathy. Many of the medical issues that Indians face do not fit into this construct, particularly for the elderly. Senior citizens list their most pressing issues as body pain, poor eyesight, hypertension, arthritis and asthma. Most of these are outside the purview of regular health insurances.
Other diseases that do not ordinarily get covered are: Parkinson’s, Alzheimer’s, strokes and mental illnesses. Cover for select traditional systems of medicine has been introduced but I think it is more from a marketing standpoint than for actual use. Generally, the treatment is restricted in amount or limited to hospitalization in a few centres. Public data on claims under traditional treatment is not available but is certain to be insignificant. There is a need to push development of health insurance with far wider cover across health systems.
I see health insurance exclusions gradually creeping back into insurance contracts. Cancer treatment is one such area. Recently, one insurer has excluded oral chemotherapy. Another has excluded Trastuzumab and similar drugs that are expensive breast cancer treatments. I do understand that the insurer would like to contain costs. When I looked at a sample of 750 claims over the past few months, cancer accounted for just 2% in number but 10% in cost. My concern with new exclusions being introduced is two-fold. First, these exclusions may apply to all policyholders on renewal, which makes the product less attractive than what they bought into. Second, it makes the insurance considerably less effective if treatment protocols are specified. How can a buyer know which disease they will get and which treatment will be required? Insurance is meant to reduce the buyer’s risk and is not a gamble to cover future health costs.
Returning to the lady with Parkinson’s.
There is one bright spot in the story. As she was leaving, I took out some money to pay the rickshaw puller. The lady held me with her left, steady hand, blessed me for pointing her in the right direction but insisted she had the money to pay for herself. I wish we had more such fiercely independent people, working hard to improve their future against all odds.