Rising health insurance costs force one in 10 policyholders to skip renewal

Health insurance costs have gone up sharply this year, making it harder for some people to afford their policies. About one in 10 policyholders have missed renewing their policy in the current financial year.

 

Also, around 10 per cent of policyholders saw their renewal prices rise by 30 per cent or more, but only half of them could pay the full amount, reported The Times of India, quoting a report from Policybazaar. 

 

What are the premium health insurances?

 

Health insurance is a type of financial protection that helps cover the cost of medical care. You pay a monthly fee called a premium to the insurance company. In return, the company helps pay for healthcare expenses like doctor visits, hospital stays, surgeries, medicines, and tests.

 

Most health insurance plans have:

 

A deductible: The amount you must pay before the insurance starts covering costs.

 

Co-pays or co-insurance: Small amounts you pay for doctor visits or medicines.

 

A network: A group of doctors and hospitals that work with your insurance company to offer lower prices.

 

Why are premiums increasing?

 

Insurance companies say that rising claims are the main reason behind the price hikes. Health insurance premiums do not increase gradually every year but tend to rise suddenly at intervals. Most insurers adjust their prices every three years to keep up with the rising cost of medical treatments. Premiums also go up as people get older, with sharper increases in later years due to higher claims.

 

According to the report, over the past 10 years, more than half of policyholders saw their premiums grow by 5-10 per cent per year. For them, Rs 100 premium increased to Rs 162-259 over the decade. Another 38 per cent of policyholders saw a 10-15 per cent annual increase, making their Rs 100 premium rise to Rs 259-404. However, 3 per cent of policyholders experienced the steepest hikes, with their premiums rising by 15-30 per cent annually.

 

Speaking to The Times of India, Amit Chhabra, chief business officer at Policybazaar, explained, “The number of people facing very large price increases is small. Medical inflation is about 14 per cent, but the average increase in premiums is much lower.” He also pointed out that 90 per cent of policyholders renewed their policies this year, which is a 10 per cent improvement from last year.

 

How are people managing costs?

 

Many policyholders are finding ways to reduce expenses. Some are switching to lower-tier plans with fewer benefits, while others are choosing policies with deductibles, meaning they pay a portion of medical expenses before insurance covers the rest. The industry is also expanding coverage, adding new technology-based treatments, which further impacts premium rates.