Over 2 in 3 health insurance holders confirm premiums up 50-200% in 3 years
New Delhi, Jan 31, 2025
Over two-third of policyholders have seen their insurance premiums increase by 50 to 200 per cent over the past three years, revealed a survey by Localcircles.
The survey, which received 17,914 responses, aimed to understand the impact of these increases on individuals who rely on health insurance for their well-being.
When asked about the cumulative increase in their annual health insurance premiums from 2021 to 2024, a striking 8% of respondents reported a staggering rise of 200% or more. Another 16% saw their premiums jump by 150% to 200%, while 13% faced an increase of 100% to 150%. A further 30% of policyholders saw premiums rise between 50% and 100%.
This trend paints a clear picture: for most people, health insurance has become significantly more expensive in recent years.
"At least 52% of personal health insurance policy owners have seen their insurance premium increase by over 25% in last 1 year. What is more alarming is that over 2 in 3 health insurance policy holders surveyed confirm that their premium increased 50-200% cumulatively over the last 3 years, possibly due to the payout the insurance companies had to do during the pandemic and after," said Sachin Taparia, founder of LocalCircles.
The Insurance Regulatory and Development Authority of India (IRDAI) has done much so far to help health insurance policy holders like cashless claim settlement within specific timeframe and lifting the age bar for purchasing health insurance cover.
On Thursday, insurance regulator Irdai announced that the health premium increase for senior citizens has to be capped at 10 per cent. Just recently, 61 year-old Rajiv Matta drew government’s attention to rising health insurance premiums for senior citizens in India, stating on ‘X’ that in the last two years his health “premium has just gone up by 90%”.
This is despite not having claimed any payout throughout his years of taking health insurance cover. Even as the health insurance premiums are rising in double digits, pay out of claims by health insurers continues to be a source of problem.
A recent LocalCircles survey showed that 6 in 10 health insurance policy owners have had to wait 6-48 hours for discharge after settlement. In fact, according to Insurance Regulatory and Development Authority of India (IRDAI) data nearly one-third of all insurance claims registered in FY24 remained unpaid.
The IRDAI report shows that over 3 crore claims were registered in FY24 for Rs 1.1 lakh crore in addition to Rs 17.9 lakh claims for Rs 6,290 crore outstanding from earlier years. Of these nearly 2.7 crore (82% by volume and 71.3 by value) were not paid.
A survey by LocalCircles in 2024 had revealed that for 52% of health insurance policy owners, the premium increased by over 25% in one year.
Insurance underwriting experts say that medical inflation is the primary reason behind the sharp rise in health insurance premium costs.
A higher number of claims during the coronavirus period, when the health insurance sector faced significant impact, has been one of the factors for insurance companies to raise their premiums. LocalCircles’ earlier survey had found that due to delay in health insurance claim processing, patients are put under pressure as it not only stalls the discharge procedure but also adds to the cost. On the other hand, the hospital and doctors are not able to provide immediate services to another patient requiring care.
Though the regulator has stepped in to help citizens to get insurance settlement faster (within few hours of the claim), the impact is still lagging. Going by complaints on various online platforms, many claimants are forced to run around or wait for response from the insurance company or their agents to settle the claims. The challenges faced by citizens having personal health insurance policy is of insurance companies rejecting claims by classifying a health condition as a pre-existing condition to only approving a partial amount which demotivates the patient as they then must pay large sums out of their pocket despite the insurance cover.
[The Business Standard]
