Medical insurance premiums go up, but there’s a caveat!

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If you’re planning to buy a health insurance policy anytime soon, there’s bad news for you! While the best time to get your health insured is now, premiums of health insurance plans have gone up anywhere between 10-25%. This is no surprise, given that India’s medical inflation has risen exponentially by 15%, much faster than India’s retail inflation, which stands at about 6%. 

This uptick was mostly driven by better awareness about the need for health insurance. Perhaps an after-effect of the huge financial outflow people saw on medicine and health during the pandemic, it continues strongly even post Covid-19, thanks to consistently increasing cost of treatments, escalating hospital and treatment charges and more. 

The health insurance business grew 26.27% in 2021-22, registering the highest growth amidst all other segments in general insurance. Moreover, 50% of this market is captured by private insurance players, with public insurers making up merely 34%

According to the 2021-22 annual report of insurance watchdog IRDAI, health insurers settled 2.19 crore claims worth Rs 69,498 crores, while the average claim amount was Rs 31,804. 

Estimates peg per day hospitalization costs in private ones (Rs 6,788) to be significantly more than that of public hospitals (Rs 2,833). Add to that the fact that the treatment cost of most critical illnesses like cancer, cardiovascular, liver and kidney ailments can run into tens of lakhs. Not just critical ailments, admission in hospital even for minor health scares can rake up a huge bill, thanks to medicines, diagnosis, room rent. 

Long story short,  the common man is one small visit away from the hospital before his lifetime savings go up in smoke. And recent research by SecureNow, a Delhi-based broker, highlights the same. According to it, only 15% Indians received reimbursement claims over Rs 1,00,000, and only 0.2% managed to get over Rs 10,00,000.