52% health insurance owners say premium gone up by over 25% in 12 months

21% of health insurance policy owners indicated premium increased by 50% or more

There has been a slight improvement for health insurance policyholders in India, but significant concerns remain. While the percentage of people facing premium increases exceeding 25 per cent  has dropped from 62% in 2022 to 52% in 2024, many are still grappling with rising costs, revealed a survey by LocalCircles.

This trend can be traced back to 2022, when insurance companies heavily increased premiums in anticipation of another major COVID wave. These high double-digit increases have continued for the past two years, leaving policyholders feeling burdened. 

52 per cent personal health insurance policy owners surveyed say their premium has increased by over 25% in the last 12 months while 21 per cent of health insurance policy owners indicated premium increased by 50% or more. At least 31% indicated that health insurance premium has risen by 25-50%.

 

The survey received over 11,000 responses from personal health insurance policy holders located in 324 districts of India. 67% respondents were men while 33% respondents were women. 39% of respondents were from tier 1 locations, 30% were from tier 2 locations while 31% were from tier 3, 4 and rural locations.

Adding to the frustration, the survey highlights inefficiencies in claim processing. 

It found that nearly half of all those who file a health insurance claim encounter difficulties.  At least 43% who filed health insurance claims in the last 3 years saying they had difficulties in processing. Complaints ranged from outright rejection to exclusions to deduction and most commonly, delays. The situation is so bad that in many cases, patients spend 8-12 hours on their last day after being ready for discharge to actually get discharged as they are waiting on the insurance claim to be processed. Doctors and hospitals owners are a frustrated lot as well as the patient is occupying a room which can be used to admit and treat another waiting patient. This inefficiency, coupled with rising premiums, has led to calls for intervention from the Insurance Regulatory and Development Authority of India (IRDAI). The study urges the IRDAI to take a two-pronged approach:

Rationalize Premium Increases: The study emphasizes the need for the IRDAI to regulate premium hikes and ensure they are more reasonable.

Improve Claim Processing: Streamlining the claim processing system is crucial to better serve policyholders and ensure they receive timely assistance when needed.

 Almost one third or 1.6 lakh cases out of total 5.5 lakh pending consumer complaints received by the department of consumer affairs are of the insurance sector, participants at a roundtable on Consumers and the Insurance Sector, organised last year, were told.

This push for reform reflects a growing desire for a health insurance system that prioritizes the needs of its policyholders. Only through addressing both rising premiums and claim processing inefficiencies can health insurance truly become a reliable safety net for citizens in India, noted the study.