retirees are given a raw deal in the group medical insurance policy

– By our correspondent

IBA communication on GROUP MEDICAL INSURANCE (GMI) policy for Bank retirees for the year 2023-24, is a rude shock.. Though every year, there used to be increase in the premium rates, this year in the semblance of offering a base policy as a welfare measure, the premium rates for the same cover taken by a retiree last year have been exorbitantly increased. Bank retirees’ policy this year can no longer be called as a welfare scheme, as it offers no concession or benefit for a bank retiree. A bare reading of the scheme brings to the fore many disadvantages to the retirees who are covered under this scheme. Some of them are:

• The base policy, priced at Rs.2 lakhs covering retirees and their spouses, comes with a premium of Rs 26,454 (Rs 22,419 + GST). It contains a lot of caps like Room rent, ICU charges, treatments, implants, physician charges, operation charges etc. This is portrayed as a big relief, whereas for the same base policy of Rs.2 lakhs, the cost of the premium without any restriction last year was Rs.27557/-. For a paltry reduction of Rs.1103/- why so many ceilings? Is it not deceitful, to say the least?
• Further the communication is vague regarding the applicability of the Proportionate clause. If applied, this could significantly reduce reimbursements, forcing retirees to incur higher expenses for hospitalization claims, as many costs are proportionate to the room rent.
• Top-Up Cover rates are usually lower than the base policy premium rates as they activate only after the base policy is exhausted. It is unusual to observe that, in this year’s GMI policy, Top-Up premium rates are exorbitant.

See the table of comparison between the premium for this year and that of the last year for the Top-up policy. In Rupees

• Previously, there was a belief that the GMI policy was the best option for bank retirees. The IBA policy boasted excellent features such as coverage for pre-existing diseases, no co-pay and a floater cover. In 2015 it started with the premium of around Rs.5000/- for Rs.3 lakhs coverage. However, this year, the GMI policy has lost its appeal due to an unreasonably steep increase in premium. For most of the retirees, it may no longer be within their means.
• Retirees now find themselves in a difficult situation, facing escalating hospitalization costs while still needing a substantial health insurance cover.
• This year’s GMI base policy lacks attractive features due to the introduction of ceilings and sub-limits for policy of Rs.2 lakhs. With a Top-up cover to reach a total coverage of Rs.7 lakhs (Rs.2 lakhs base policy plus Rs.5 lakhs top up) permissible for workmen last year, the premium for the previous year was Rs.53809/- whereas now it is Rs.96532/-, there’s a staggering 79% increase in the premium compared to that of the previous year.
• With a Top-Up cover to reach a total coverage of Rs.9 lakh (Rs.2 lakhs base policy plus Rs.7 lakhs top up) permissible for the officers last year, the premium for the previous year was Rs.72988/-, whereas now it is Rs.107138/-,  there’s a steep 47% increase in the premium compared to that of the previous year. For the same coverage of Rs.9 lakhs, with the base policy of Rs.3 lakhs and top-up policy of Rs.6 lakhs, SBI charges only Rs.19490/- for its retirees, the cost for the top-up policy of Rs.6 lakhs borne by the SBI. Where is 19490/- where is 107138/-? The cost of premium for the commercial bank retiree is 5.5 times that of SBI retiree, i.e.550%. Is it fair?
• Since the premium rates are highly excessive for adequate health coverage, it’s likely that most retirees will opt out of the GMI scheme. Without significant reduction to the premium rates and coverage terms or substantial subsidies from the bank, the scheme may not serve the purpose.
• In summary, there are several drawbacks to this year’s policy, including issues with pricing, coverage, communication etc. which need to be addressed to provide a more equitable and satisfactory insurance policy to all the retirees.
• The health insurance, which has become a necessity and more particularly for those above 60 years, if made unaffordable, more so by their past employer, is highly deplorable. Already thousands of retirees have left the IBA scheme. Out of around 4 lakhs retirees, hardly around 1.5 lakhs retirees are presently in the scheme. Even these retirees will be driven by IBA due to this exorbitant and unaffordable cost of the premium.
• The entire premium for the retirees has to be borne by the Banks. If it is not immediately feasible, in order to ensure competitive premium rates, it is essential to consider bank employees and retirees as a homogeneous group, which has been the demand of the bank retirees. Substantial subsidy has to be given by the Banks.
• It is for the IBA to extend an affordable Medical Insurance Scheme for the retirees. UFBU and retirees should jointly move to achieve this.