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Posted on: Jul 25, 2022 | | Written by:

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Reasons for rising healthcare insurance premiums

In the past two years, the COVID-19 pandemic has pushed many people to buy health insurance in droves. That’s because the outbreak caused havoc on a large scale. And even those who didn’t take health insurance seriously before went on to buy it. Also, healthcare facilities were under tremendous pressure because of the growing number of cases by the day. And the household budgets of patients and their family members went for a toss. All this made people realise the importance of having enough health insurance cover to tide over crises. Which is why health insurance premiums rose by a whopping 25 percent during 2021-22.

On the other hand, owing to the coronavirus pandemic, health insurance companies were pushed to raise their premium rates because of the unusual claim burden and rising healthcare inflation. That being said, the premiums of group health insurance policies, which include the ones that companies provide to their employees and families, have also recorded a steep rise. As per a Marsh-Mercer benefits survey, the cost burden of sponsored medical benefit costs in India is all set to record a 15% rise in 2022 when they come up for renewal.

Likewise, individual health policies are slated to rise since insurers are only awaiting the nod from the Insurance Regulatory and Development Authority of India to hike their prices.The general perception is that retail health premiums will record a rise between 8 and 15 percent.

Let’s now study why premium rates are going up and how you can curtail your healthcare insurance expenses.

Why are health insurance premiums expected to go up in the coming days?

The reasons behind rising health insurance premiums are manifold. Certainly, the COVID-19 pandemic, which led to chaos in the healthcare systems, is one of the primary reasons for this trend.

Insurance companies are grappling with an overwhelming number of claims because of COVID-19-related hospitalisations.Add to this, they’re dealing with bottled-up claims of people who postponed their surgeries. In other words, insurance companies are finding it difficult to sustain themselves due to a high number of claims.

Nonetheless, industry watchers believe that the rates will stabilise within a year or two. Besides that, health insurance companies can raise their price every three years going by their experience with customers.

So, if you are a policyholder, you can expect a steep hike in health insurance premiums as you age. This is further applicable if you are 40 years or above. On the flip side, the premium,if you are between 35 and 39 years, will be the same, as per insurers.

What can you do to contain your renewal premium hikes?

Premiums of health insurance policies are expected to go up for all age groups. Even so, senior citizens will most likely bear a harsher brunt of these hikes because of age-related factors and illnesses.

On the other hand, youngsters have many options to explore. The general recommendation for younger age groups is to compare policies and premiums. If you belong to that age group, you must know the benefits that are offered by different insurers and choose the lower-priced ones. You must also look for products that are popular and have not been price-hiked exorbitantly.

However, some insurers maywithdraw their existing products and offer policyholders other products in their portfolio. But, the premiums of new products will tend to be higher. Luckily, insurers are less inclined to discontinue popular products or hike their premiums substantively.

Tips on how to reduce your insurance premiums

• Choose healthcare policies with voluntary deductibles

• Approach network hospitals for treatment

• Pay premiums for 2 to 3 years to enjoy a 7 to 15 percent discount

• Go for policies with sub-limits to further reduce your costs

How should you choose the product you should port to?

Try and use the same approach that you adopt when purchasing a new health insurancepolicy. Apart from cheaper premiums than your current policy, you must study the different features of the varied policies. Check the claims settlement record of various insurers and whether they’re offering cashless hospitalisation benefits. Among other things, you must know about their claim service record and digital support. Note that the policies with higher no-claim bonuses are a good option. In the process, you can benefit from a higher sum assurance without paying extra premium.

As compared to senior citizens, this feature is more useful for youngsters, as the latter are less likely to make claims.

Conclusion

So, by now, you are aware of the various reasons that are leading to hikes in the premiums of health insurance policies. While some insurers have already hiked the prices of their retail health insurance products, others are bound to follow suit soon. However, you can save on healthcare insurance costs by comparing different policies and prices and checking the varied benefits before zeroing in on one.

Disclaimer: The above information is for illustrative purpose only. For more details, please refer to policy wordings and prospectus before concluding the sales.

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