Retirees are Still Given a Raw Deal on Medical Insurance

It is to the credit of the UFBU leaders that there has been a drastic reduction in the premium of the IBA medical insurance policy of the retirees compared to that of last year. In fact, this year’s premium for the coverage of Rs. 3 lakhs for workmen and Rs. 4 lakhs for the officers has been reduced by almost 50%. This became possible since the policy of the serving employees and that of the retirees could be combined. But this defies logic and suffers from infirmities on many aspects.

Topped Up Premium
First, the premiums for base policy and similar top up amounts are different and the top up premium is exorbitantly higher for the retirees. When top up is expected to be utilised only when the base amount is exhausted, the premium for top up policy is bound to be very cheaper say about 20% of the premium of the base policy.

For a base policy of Rs. 3 lakhs for retired award staff the premium is Rs. 28,545 for self & spouse, Rs. 25,691 for single. But the top up premium for a similar amount of 3 lakhs coverage is Rs. 40,239 and Rs. 36,215 respectively which is higher by 41%. Similarly for officers, the premium for a base policy of Rs. 4 lakhs is Rs. 40,900 for self & spouse, Rs. 36,810 for single. But the top up premium for a similar amount is Rs. 48,499 and Rs. 43,649 respectively which is higher by 19%. Even the graded top up premium is 20 to 25% higher over each slab for both award staff and officers.

Some of the member banks have given option to their serving employees to get top-up coverage at a lesser premium to be borne by the staff. Bank of Baroda has given option of coverage of Rs. 4 lakhs at a premium of Rs. 12,627 for award staff and Rs. 5 lakhs at Rs. 14,397 for officers under the NIC group insurance scheme. But for retirees to get same top up coverage, Rs. 48,499 and Rs. 60,299 is quoted by NIC which is nearly four times i.e. 400%. It is also a fact that NIC offers individual policies at cheaper rates. This raises a question whether IBA intends to discourage retirees from topping up.

Shifting of Burden
Second, the premium for employees is borne by the banks but not for the retirees. When the Government instructed banks to bring serving and retired employees under group insurance, it was expected that the banks would bear the premium for both. But that did not happen. Retired bank employees typically rely on pensions and personal savings only to sustain their livelihoods after years of toiling service.

The medical insurance premium is a huge financial burden on the retirees consuming nearly three to four months’ pension, leaving little for other essentials. It not only destabilises their financial security but also forces the retirees to take difficult choices to forgo the required coverage, medical treatments or medications.

It was ironic, last year, instead of meeting out the entire cost of medical coverage for retirees, banks reimbursed a small portion of the premium that too subject to a ceiling. Knowing well that many retirees may not have sufficient funds for debiting the premium amount upfront, loans were offered too. What is going to be done this year, is a million-dollar question.

What is Family
Third, the coverage for retirees is for self or for self and spouse alone; whereas for the serving employees the definition of family for medical treatment includes spouse, children and any two of the parents or parents-in-law. But the premium amount is the same. What an irony?

Discriminatory
Fourth, serving employees are covered for not only hospitalisation but also for domiciliary expenses. Even full amount of the base policy can be utilised by them for domiciliary treatments. Whereas the domiciliary treatment is denied for the retirees. When both are covered under similar group insurance scheme, why is there discrimination against retirees?

Deferred But Denied
Pension is a deferred wage recognising the dedicated, long, loyal contributions made by them while in service. A portion of the wages is earmarked for pension and only out of the corpus that was built utilising that, pension is given. But this wage which is supposed to give financial security to the retirees is getting robbed indirectly through the increased cost of medical insurance premium, especially for the top-up, under the IBA scheme.

When the healthcare landscape is continually becoming costlier due to increased out-of-pocket costs, the retirees find themselves in a precarious situation where their fixed income does not keep pace with these rising costs, further exacerbating their financial difficulties. Instead of securing them financially and medically, the IBA scheme makes them more vulnerable especially due to the lack of transparency in fixation of premium.

The financial strain due to the exorbitant medical insurance premiums can have profound emotional and psychological consequences. Many retirees experience heightened anxiety and stress as they grapple with the uncertainty of their healthcare coverage. The fear of unexpected medical expenses can lead to a decline in mental well-being, affecting retirees’ quality of life.

Will IBA and bank managements address and respond to these pertinent issues? Hope UFBU would take quick steps to address this issue as the deadline is hardly a few days away.

[ This article is originally published in bankworkersunity ]