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Since the COVID-19 pandemic, India has been witnessing a rise in healthcare cost inflation, making guaranteed and standardized healthcare unattainable for various sections of the society and driving up health insurance premiums. Last year, the country witnessed healthcare cost inflation of 14%, while overall inflation was in the single digits. Healthcare market experts note that this level of escalation is unsustainable and that the market correction should occur soon.
Speak with The Hindu, Sumit Bohra, president of the Insurance Brokers Association of India (IBAI), notes that currently in India, rising healthcare costs and rising health insurance premiums are feeding each other.
Healthcare costs
“This is a vicious circle and currently we are witnessing damage amounts of 90%. A third of the insurance industry has been taken up by the health insurance segment, which is growing at 19-21% annually and is expected to grow further,” he said.
Listing the reasons why healthcare costs are becoming more expensive, Mr Bohra noted that the concentration of specialist doctors in the private sector, overcrowding in government hospitals (leading to long delays etc.), the price flexibility offered by insurance cover (people give more if they have health insurance), the growing demand for and availability of healthcare interventions are all contributing factors.
Supporting this trend, ACKO General Insurance in its recent report notes that hospitalization in India has increased by 12.8% in 2023-2024 compared to the previous fiscal year, according to an analysis of health insurance claims, where the average claim size in India for 2023-2024 is ₹70,558. , compared to ₹62,548 in the previous financial year.
Additionally, the report notes that the costs of common medical procedures have increased. An angioplasty now costs ₹2-3 lakh, compared to ₹1-1.5 lakh in 2018. Similarly, the cost of kidney transplants has doubled from ₹5-8 lakh in 2018 to ₹10-15 lakh in 2024. According to the company could double this even further in the coming years.
Health insurance, also known as health insurance/policies, is a financial instrument that covers the costs of medical treatments. There is now a wide variety available in the Indian market.
Despite this option, the common man complains about the rising health insurance premium.
Doctor and health activist Arun Gupta said that both he and his wife Rita Gupta (seniors) have written to the Insurance Regulatory and Development Authority of India (IRDAI) about the excessive premium hike of 450% in three years.
When Dr. Talking about this private insurance, Gupta said that access to insured, quality healthcare is now not a matter of good, but a matter of having the ‘right’ insurance coverage.
“The sector needs regulations in terms of capping premiums, regulating expenditure on patients when they are admitted to hospital, introducing standardization of hospital charges etc,” he said.
The population is vulnerable to catastrophic spending
Meanwhile, speaking on how to curb rising costs, Mr Bohra said customers should consider buying health insurance only for chronic diseases and surgeries.
“This system will help stabilize that market,” he said, adding that customers are now also offered schemes such as fixed premiums and benefits by the many players in the market.
Central government policy think tank NITI Aayog, in its report on health insurance, notes that India’s population is vulnerable to catastrophic spending that is not limited to the poor.
“Prepayment through health insurance appears to be an important tool for pooling risks and protecting against catastrophes [and often impoverishing] expenditure due to health shocks. At least 30% of the population, or 40 crore individuals – referred to in this report as the missing middle – are deprived of any financial health protection,” the report said.
Lack of a robust public health infrastructure
Abhay Shukla, co-chairman Jan Swasthya Abhiyan (JSA), a non-governmental organization working for healthcare rights, said they have decided to intervene in the various petitions challenging the regulation of hospital charges.
“Currently, in the absence of a robust public health infrastructure, people in India have no option but to depend on private healthcare facilities to meet their healthcare needs. In the absence of effective regulation, millions of people are exposed to exploitation by private hospitals. Both the central and state governments are not taking steps to effectively implement central or state level legislation such as the Clinical Establishment Act 2010 (CEA),” he said, adding that the Central Clinical Establishment Rules make it mandatory for clinical establishments to to adhere to this. at the rates fixed by the Central Government in consultation with the respective State Governments.
Published – Dec 21, 2024 7:35 PM IST
