Health insurance premiums with deductibles and multi-year premium reductions may help to mitigate the effect of the price rise, but coverage will be limited.
Your health insurance rates may begin to rise in the coming days. Experts claim that group health insurance plans, which are issued by businesses to their workers and families, have already increased in April, when many such contracts come up for renewal. Employer-sponsored medical benefit expenses in India are predicted to rise by 15% in 2022, according to a Marsh-Mercer benefits study.
Soon, it might be your individual policy premiums’ turn, as insurers grappling with the COVID-19-related claim load and growing healthcare inflation seek the insurance regulator’s approval to raise rates. Retail health rates, according to industry observers, might jump by 8-15 percent.
Here’s your guide to the reasons of these premium spikes, as well as how you can maintain a lid on them at your end.
Why are health insurance prices projected to rise in the near future?
The biggest cause is the COVID-19 epidemic, which has wrecked havoc on health and healthcare systems worldwide, driving increased health insurance claims. “Use of health insurance coverage has increased significantly as a result of COVID-19-related hospitalization.” There is also a lot of pent-up demand, since people who postponed their operations and treatments are suddenly making claims. As a result, insurance firms are suffering the brunt of the increased claims,” says Abhishek Bondia, Co-founder and Principal Officer of Secure Now Insurance Brokers.
He does, however, expect that rates will level down in a year or two. Aside from that, health insurance firms may raise their prices every three years depending on claim experience. Rates for policyholders might also experience a large increase as they shift from one age group to another — for example, depending on the insurer, your premiums could stabilize between 35-39 years, but see a significant increase when you reach 40.
What can I do to keep my renewal premium increases in check?
If you are younger, you have a wider range of possibilities to choose from. You may evaluate prices from other insurers and switch to one that has cheaper premiums, as long as the benefits stay the same. Look for items that are well-known and have not undergone outrageous price increases of more than 60-70 percent. Some businesses remove current products and shift policyholders to new products in their portfolio, however premiums may be much higher.
If you purchase popular goods that have been on the market for 2-3 years, the insurer will have less reason to stop the product or significantly raise prices,” explains Shrehith Karkera, Co-founder of Ditto Insurance.
What factors should I consider while deciding which product to port to?
Because the activity is comparable to purchasing a new policy, the strategy should be similar as well. Aside from lower premiums than your current insurance, consider benefits such as the cashless network of hospitals, claims settlement record, digital assistance for policy and claim service, and so on. “Choose plans that provide bigger no-claim incentives.” “This will give you access to a bigger sum insured without having to pay an extra premium,” Bondia explains.
This is a helpful feature for younger people since their odds of filing claims are reduced. Though this belief was challenged during the COVID-19 pandemic, notably the Delta wave in March-June 2021 in India, the truth remains that they are less likely to file claims than seniors.
I can’t afford my renewal payments or the prices for equivalent products from other insurers, but I don’t want to give up this protection. What alternatives are accessible to me?
In such instances, you may have to settle for items with limitations and reduced advantages. You might consider switching to health insurance plans that provide optional deductibles — a modest sum that you agree to pay out of your own money in the event of a claim – which lower prices. “For example, if you choose a Rs 15,000 deductible, your rates might be reduced by 15-20 percent,” says Amit Chhabra, Head of Health and Travel Insurance at Policybazaar.com. You may also try paying premiums for two to three years in advance in exchange for a 7.5-15 percent reduction. “Some goods provide a preferred partner network discount (of hospitals that provide cashless services).” “Your rates may be 15% cheaper, but only if you seek care from a certain list of facilities,” adds Chhabra. In such circumstances, insurers may afford to give a discount since they have negotiated better (read cheaper) prices for specific operations.
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I am a senior person who cannot afford the premiums on my current plan. Can I switch to a less expensive product?
You can, but you’ll have to put up with certain limits, just like younger people. “You should choose specialized senior citizen plans only if your current premium is absolutely prohibitive.” “In certain situations, you may have no option but to get such coverage since insurers may not provide conventional plans to you,” Bondia explains. Senior citizen plans have room rent sub-limits as well as disease-specific capping’s, which reduce the value of the policies, but at that age, you have fewer alternatives.
