When you renew your health insurance, you may notice that the premium changes periodically, and you need to shell out a little more every year. Apart from factors that pertain to you, like filing more claims or advanced age, the rise in premium is dependent on various factors. Until last year, there was an increase of 10% each year, but this year has seen a rise of 25% to 35%. Here are the primary reasons why health insurance is rising.
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Reasons why insurance premiums are rising
1. Medical inflation due to more claims – During the start of COVID, people with existing serious illnesses were taken to hospitals as soon as any symptoms of COVID were observed. Since specialty hospitals are generally larger institutions and charge more, the claims being filed were heftier. In the past year, all the elective procedures that were on hold were restarted, and people filed claims for that too. Due to the panic caused by COVID, people trusted the bigger institutions over the smaller ones, and they were charged accordingly. Many insurers have already announced the revised premiums, while the others are expected to do the same soon. Insurers have suffered heavy losses during the last year, and the only way to continue is to hike the premiums.
2. Increase in hospital costs due to COVID – The hospitals themselves had higher expenses due to the extra care taken. Even the hospitals which were not dealing with COVID patients directly saw a sharp rise in expenditure. The healthcare staff was working overtime to meet the requirements of the hospitals. The charges for gloves, repeated sanitization, PPE kits like masks, face shields, full bodysuits, and so on got added to the expenses.
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3. Pricing and IRDAI intervention – In 2019, IRDAI announced the standardization of exclusions from health insurance policies. According to the new rules, insurers are not allowed to exclude some diseases. There should also be inclusions of modern methods of treatment in the policy as per IRDAI.
What can you do when health insurance premiums are rising?
Every penny is important in the current times, and here are a few things you can do from your end in these times.
1. Make lifestyle adjustments – There are some diseases that cannot be prevented. However, if you make small adjustments to your lifestyle, you can reduce the chances of diseases like diabetes, stroke, heart attack, and so on. For example, diabetes itself leads to further health problems. Eat healthy food, incorporate exercise in your routine and ensure you do preventive checkups.
2. Look for an affordable plan – Another way to combat the price hikes is to look for a plan that is suitable to your budget. Arogya Sanjeevani policy is one such plan that offers good benefits at affordable prices. It is a standard health insurance plan launched by IRDAI in 2020. The plan is the same across all insurance providers. The low premium, low copayment, lifelong renewability, coverage against COVID, and quick processes due to the involvement of a private insurance provider are some of the advantages of Arogya Sanjeevani.
3. Customize your health insurance plan – When you are buying your insurance plan, see what suits the medical needs of you and your family members the best. Go for customized plans and eliminate the things you don’t need. Reconsider the add-ons that you have bought and their utility as well. Get a family floater plan if you have a small family and if your parents are not included in the plan.
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4. Look for an employer who gives health benefits – One of the perks of working for an employer instead of being self-employed is a health insurance policy. Employers offer group health insurance, which can take the load off of you. Generally, the coverage is extended to the spouse and kids as well. If you still feel that the insurance is insufficient, you can increase the coverage by paying out of your pocket or looking for an insurance policy outside. However, it is a start and at least you do not have to bear the burden of a health insurance policy alone.
5. Switch to a better insurer – When it is time to renew your policy, you will have to spend an extra amount to match the premium. This is the perfect time to look at other insurers and if they can give you better coverage at the same price or lower. Take a look at the benefits and advantages of other insurance providers to understand whether the switch is truly worth it.
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6. Look for discounts – Take a look at discounts and any offers that might reduce the premium. Most of the time, a longer commitment from the insured of 3 or 5 years will give you a better deal. There is a discount on premium in this case. There may also be a discount during certain times in the year and look out for these discounts.
7. Search for better deals – Better deals can mean better coverage in the same amount or a higher sum assured in the same amount. It can also mean more inclusions in the same amount but the same sum assured. Recognize your need of the hour and search according to what you think is a good deal. Compare insurers and insurance policies to understand what you will be paying for.
Contrary to popular opinion, COVID is not the only thing that has made the health insurance cost go up. Do your bit and stay safe to avoid a rise in your premium.
Also Read – Why Should You Not Miss Out On Your Health Insurance Renewal?
(India CSR)
