The health insurance industry in India is growing rapidly, driven by increasing healthcare expenses and greater awareness among consumers, especially after the COVID-19 pandemic. With medical inflation standing at 14% annually, experts predict that the health insurance market will exceed Rs 2 lakh crore ($23.8 billion) by 2028, according to Global Data.
Sharp Rise in Insurance Coverage
A report by insurtech platform Turtlemint highlights a 240% increase in the total sum assured over the last five years. This indicates that more people are opting for higher coverage to protect themselves against rising medical costs.
The pandemic served as a reality check for many Indians, emphasizing the importance of financial preparedness for medical emergencies. As a result, health insurance policies have seen a surge in demand, especially in Tier 2 and Tier 3 cities, where awareness about insurance benefits has grown significantly.
One of the key findings of the report is that the average premium per policy in smaller cities has risen by 73% since 2020. This reflects a growing trend of consumers choosing more comprehensive and high-value health insurance plans.
Dhirendra Mahyavanshi, Co-founder & CEO of Turtlemint, stated:
“The increasing preference for higher sum assured and comprehensive coverage highlights a growing consumer focus on financial preparedness for medical expenses.”
Possible Hike in Health Insurance Premiums
In Delhi, discussions are underway regarding a potential 10-15% hike in health insurance premiums. This increase is being considered due to the impact of air pollution on public health, which could raise overall healthcare costs. If the Insurance Regulatory and Development Authority of India (IRDAI) approves this, Delhi will be the first city in India to factor air pollution into health insurance pricing. This move could set a precedent for other cities facing similar challenges.
New IRDAI Rules to Protect Senior Citizens
To safeguard senior citizens from steep premium hikes, IRDAI has introduced new regulations:
- Capping Annual Premium Increases: Insurers cannot raise premiums for senior citizens by more than 10% annually without prior approval from IRDAI.
- No Discontinuation of Senior Citizen Policies: Insurance companies must continue offering individual health plans tailored for senior citizens.
- Standardization of Hospital Charges: IRDAI has recommended a common hospital empanelment system to reduce hospitalization expenses.
Senior citizens often face premium hikes of 50-100%, making health insurance unaffordable. These new rules aim to provide stability, transparency, and affordability for older policyholders.
With rising medical costs and increasing demand for better coverage, India’s health insurance sector is evolving rapidly. While higher premiums may pose challenges, regulatory measures are being introduced to ensure affordability and accessibility for all.
