In India, a large number of private health insurance policyholders are witnessing a concerning trend—rising premium costs coupled with an increasing number of claim rejections. 18% GST levied on premiums add to it, prompting many to forego policy renewals altogether.
Healthcare remains one of the most significant expenses for individuals in India. With medical inflation hovering around 14% and nearly 60% of the population depending on private healthcare services, the financial burden of a single illness can potentially push an entire family into debt.
This raises critical questions:
- What regulations govern India’s health insurance sector?
- Why are premiums increasing so rapidly?
- Will the regulator bring any relief?
- And more importantly, is health insurance the ideal path toward universal healthcare in India?
Underinsurance Remains a Major Concern
Despite rising healthcare costs, a vast majority of Indians remain underinsured. Reason for this could be a general underestimation of actual treatment costs. 51% of non-buyers believe the cost of treating critical illnesses—like cancer, kidney transplants, or cardiac surgeries—is under ₹5 lakh, a figure far from today’s medical realities.
Limited Awareness and Outdated Financial Mindsets
Awareness continues to be a barrier. Indians are still unaware of Health insurance and its benefits. This lack of knowledge often results in poor financial planning, with many still relying on selling ancestral assets or taking loans during medical emergencies instead of investing in accessible insurance products.
Interestingly, while traditional instruments like gold, fixed deposits, and real estate remain popular, health insurance is now being viewed as a smart investment choice.