Health cover costs may rise for policyholders

Of late, healthcare costs have been rising in the country for more than one reason. First, the medical inflation is as high as 15-18% in India, which is way higher than the general inflation rate. Second, with cutting edge technology making entry into the medical field tis having a cascading effect. Third, because of Covid-19, hospitals have also increased their tariffs considering that the new protocols have to be followed to fight the ongoing pandemic. Experts say with the rise in the healthcare cost the premium may also increase for policyholders over the period, if not imminently.

According to a recent report premium of retired staff members of public sector banks will increase by 40% on account of the high claim ratio in the group health policy. The Times of India report stated that the Indian Banks Association has received the revised quotes for an increase in premium rates.

As per PolicyX.com’s health insurance price index, the index value was increased to Rs. 25,197 in Q2 2021 whereas in Q1 2021, the prices had remained constant at Rs. 24,026 for health. The index value has increased by 4.87% in Q2 in comparison to the last quarter.

Insurers say that while covid claims have been reduced there has been a surge in non-covid claims. “We are seeing reduced hospitalisations and the severity of the disease has reduced all over the country. However, we have suddenly seen the cost of non-covid claims increasing, which means the hospitals have increased their general tariffs. We are seeing an increase in claims which means claims outgo is much higher than the premium level. It is a double whammy for insurers as they suffer because of Covid and now non-covid claims. Claims outgo will be a stress on insurance companies,” Shreeraj Deshpande, COO, Future Generali India Insurance earlier told Money9.

Will an increase in claims lead to a rise in premium rates? “Insurance companies are collecting premiums from people and they are managers of funds. If that fund is not sufficient, insurance companies will have to raise their prices. So, this will lead to an increase in premium over a period of time. In corporate policies also, we are seeing an increase in premium,” said Deshpande.

What to do?

Buying health insurance at an early age is always beneficial when it comes to affordable premium prices. One can also consider buying super-top up plans for buying more cover at lower rates.

“People must compare plans carefully before buying as the premium prices vary from company to company. When one compares plans online they get detailed information about different plans which helps them in identifying the right plan and eliminates the chances of paying for unwanted or unknown factors. Thus, intelligent and careful buying can help a person in saving money. Also, it is not certain that all riders are important. A person must select an important rider that is quite helpful and necessary as too many additional riders also add up to the premium prices,” said Goel.