Since COVID-19 pandemic, India has been witnessing a surge in healthcare cost inflation making assured and standardised healthcare unviable for several sections of the society and pushing up health insurance premiums.
Last year, the country witnessed a healthcare cost inflation of 14% even while general inflation stood in single digits. Healthcare market experts note that this level of escalation is unsustainable, and market correction should be kicking in soon.
Speaking to The Hindu, Sumit Bohra, president of the Insurance Brokers Association of India (IBAI) notes that currently in India the rising healthcare cost and growing health insurance premiums are feeding each other.
“This is a vicious cycle and at present, we are witnessing claim amounts of 90% [of overall premium receipts]. One-third of the insurance sector has been captured by the health insurance segment which is growing at the rate of 19%-21% annually, and is expected to grow further,’’ he said.
Among the reasons for healthcare costs becoming dearer, Mr. Bohra cited the concentration of specialised doctors in the private sector, overcrowding in government hospitals with accompanying long delays, and the price flexibility that a health cover offers, prompting people to spend more once they have insurance coverage. At a broader level, higher demand and better availability of healthcare interventions, have also contributed.
A recent report by ACKO General Insurance also pointed out that hospitalisation in India soared 12.8% in 2023-2024, based on an analysis of health insurance claims. The average claim size for 2023-24 went up to ₹70,558, from ₹62,548 in the previous financial year. Moreover, the report noted that the costs of common medical procedures have risen.
An angioplasty now comes at an expense of ₹2-3 lakh compared to ₹1-1.5 lakh in 2018. Similarly, kidney transplant costs have doubled from ₹5-8 lakh in 2018 to ₹10-15 lakh in 2024. According to the company, this could further double in the next couple of years.
Meanwhile, ordinary citizens has been complaining about the rise in health insurance premiums.
Physician and health activist Arun Gupta said that both he and his wife Rita Gupta, who are senior citizens, have written to the Insurance Regulatory and Development Authority of India (IRDAI) about the excessive premium increase of 450% witnessed over three years.
Dr. Gupta said that accessing assured, quality healthcare is now not a matter of right but a matter of having the ‘right’ insurance cover. “The sector needs regulations in terms of capping the premiums, regulating expenditure costs to patients when they are hospitalised, bringing in standardisation of hospital costs, and so on,’’ he averred.
To curb escalating premium costs, Mr. Bohra suggested customers should look at taking a health insurance cover only for chronic diseases and surgeries. “This will help in stabilising that market,’’ he said. With more players in the market, customers are now also being offered schemes like fixed premiums and benefits cover.
The Centre’s NITI Aayog in its report on health insurance notes that India’s population is vulnerable to catastrophic spending which is not limited to the poor.
“Pre-payment through health insurance emerges as an important tool for risk-pooling and safeguarding against catastrophic (and often impoverishing) expenditure from health shocks. At least 30% of the population, or 40 crore individuals – called the missing middle in this report – are devoid of any financial protection for health,’’ it said.
Abhay Shukla, co-convenor Jan Swasthya Abhiyan (JSA), a non-government organisation working in healthcare rights, said that they have decided to intervene in the various petitions challenging the regulation of hospital charges.
“In the absence of robust public health infrastructure, people have no option but to depend on private healthcare facilities to meet their needs, and in the absence of effective regulation, millions of people are exposed to exploitation by private hospitals. Both the Central and the State governments are not taking measures to effectively implement legislations such as the Clinical Establishment Act 2010 (CEA),’’ he said, adding that the Central Clinical Establishment Rules make it mandatory for clinical establishments to adhere to the rates fixed by the Central government in consultation with the respective State governments.
Published – December 25, 2024 06:25 pm IST
