Medical inflation in India is rising at a rate of 14 per cent. This makes it very important for all of us to have health insurance. Health insurance becomes more important for senior citizens, especially those over the age of 70 as they are more prone to health emergencies. However, for the same reason, health insurance for people in their 70s is very expensive. One way of getting decent coverage at lower premiums is to get insurance with a deductible.

Let us understand what a deductible is. A health insurance policy with a deductible of Rs 5 lakh means that the policyholder will bear the cost of hospitalization up to Rs 5 lakh and the insurer will pay for expenses beyond that. “By going with a high deductible, the insurer takes on less risk for small claims and has to pay only beyond the deductible amount - which significantly lowers the premium amount compared to a plan with lower or no deductibles,” says Siddharth Singhal, head - health insurance, Policybazaar.com.

Also Read: Health Insurance Sub-Limits

Ayushman Bharat Covers Seniors Above Age 70 For Rs 5 lakh

In recent news, the Union Cabinet chaired by Prime Minister Narendra Modi has specified that everyone aged 70 and above will be covered under the Ayushman Bharat scheme. They will not have to share the Rs 5 lakh cover with family members who are below 70 years old. Instead, they will get an additional top-up cover of Rs 5 lakh. This will mean that senior citizens will have a larger cover in case they need it.

“The government of India clarified that senior citizens aged 70 years and above. If their families are covered under the Ayushman Bharat Scheme then they are eligible for annual top-up cover of Rs 5 lakh for themselves (which they do not have to share with the other members of the family who are below the age of 70 years),” says Sharad Mathur, MD and CEO, Universal Sompo General Insurance.

Should You Depend On Ayushman Bharat?

The question is, can you opt for an insurance policy with a Rs 5 lakh deductible and pay Rs 5 lakh out of the Ayushman Bharat Scheme and save on premiums?

Technically, a person can use Ayushman Bharat as a base policy for parents and purchase a top-up to cover more severe cases. “However, the main drawback is that the network, room limits, and benefits are significantly more restrictive and basic compared to retail or corporate-provided plans. If someone is seeking a higher-quality experience and can afford it, they should consider opting for a separate plan rather than relying on Ayushman Bharat,” says Surinder Bhagat, vice-president, special lines – employee benefits, Prudent Insurance Brokers.

Also, Bhagat adds that the network is limited, and many large private healthcare providers are not part of the Ayushman Bharat program due to pricing and reimbursement concerns. For instance, none of the top 10 hospitals most frequently used for corporate insurance in Gurgaon are included in the Ayushman Bharat network.

So, if you are going for a policy with a deductible for your elderly parents over 70, you must have that money available with you or a separate private policy up to that amount of deductible. Depending upon the Ayushman Bharat Scheme is not recommended.