My health insurance premium jumped 20% this year without any claims. Why is it rising so fast?

The sustainability of health insurance is currently facing severe headwinds and premium hikes are a reality across the entire industry. While general inflation in India sits around 5% to 7%, medical inflation is roughly double that running at about 14% year-on-year.

Insurers are squeezed by three major forces that ultimately get passed down to the consumer as higher premiums. First is the sheer cost of medical inflation itself. Second is the intense competition among insurers which keeps distribution payouts and commissions very high.

Third and perhaps most damaging is the rampant overcharging and excessive billing by private hospitals. We frequently see bills that just do not make sense including unnecessary tests and double billing for similar procedures. Because there is a lack of standardized medical codes and protocols between insurers and hospitals in India costs spiral out of control.

Porting to a cheaper provider might give you temporary relief but the structural issues of 14% medical inflation and excessive hospital billing affect every insurer. You need to factor in these aggressive premium hikes as a permanent part of your long-term financial planning.

Disclaimer: All information shared above are strictly for educational and informational purposes only. It should not be construed as financial or investment advice.