One cannot deny the importance of health insurance. This is why most people invest in health plans. There was a time when health insurance in India was very affordable. Of late though, these covers have become quite costly.
There are several reasons why the health insurance premium has sharply risen these days. What are these reasons and how do they impact you? Let’s find out in the article below.
Reasons for the hike in health insurance premium
Many people would assume that Covid 19 is single-handedly responsible for the change in the premium of their health insurance policy. However, this is not entirely true. While covid has definitely played a huge role here, there are other factors that contribute to this as well. Here are all the details:
The pandemic has caused havoc in many areas and walks of life. Unfortunately, the health insurance sector hasn't been spared either. In fact, the pandemic put a tremendously high amount of pressure on this sector with a substantial increase in the volume of claims. There was a massive increase in the number of health insurance claims.
While claims in the magnitude of about INR 8000 crore were made, the industry paid out close to INR 4000 crores in health insurance claims. After this, the medical insurance providers were left with no option but to hike the premium rates in order to stay operational.
Fear and panic
The importance of health insurance cannot be negated, and it is visible during uncertain times. The pandemic made people very scared. This was especially true for people who had comorbidities. At the slightest sign of an illness, patients were admitted to hospitals, largely as precautionary measures.
This pushed up the volume of the health insurance claims and pushed the insurance industry further into financial distress. To cope with the sudden hike in costs, the insurers then began hiking the premium of every health insurance policy they sold.
While the government handled the Covid situation to its best ability, the general public has lost a lot of confidence in medical health centres over the years. People who have health insurance coverage prefer to get treated at the larger private hospitals where the treatment is more expensive.
This has again led to a hike in the amount of the claims that the insurers need to pay out, forcing them to compensate for the losses with an increase in the premium rates.
Health insurance in India, along with the entire health industry, has seen huge inflation and this is because of the pressure of the pandemic. The health insurance inflation in India is at 14% on a year-on-year and on the rise. From extra costs towards masking, sanitisation, PPE kits and precautionary measures to employing extra staff to cope with the increased patient load, the industry has taken a severe beating.
This is another big reason why the hospital bills are much higher today, as compared to a few years back. And since the bills are higher, the claim amounts are higher too. All these factors, consequently, have forced insurance providers to increase the health insurance premium rates.
As these factors have worked in tandem to make the premium of the health insurance policy go up. If you are about to renew your health insurance policy, do not be surprised at the new premium rate!
As you can clearly see from the points mentioned above, there are many reasons why you have to pay more for health insurance in India these days. Given the vital importance of health insurance, you cannot afford to stay uninsured. Thus, you need to assess your needs, compare the insurance plans and then find the mediclaim cover that’s best suited for you. Once that is done, you can keep yourself and your loved ones protected at all times.