It’s high time to rein in health insurance providers to ensure that the common people have access to healthcare. If swift action is not taken, within a few years the common people of India will have no other option but to succumb to diseases without coverage for medical treatment. According to a recent estimate, health insurance premiums for 52 percent of policy holders have risen by over 25 per cent last year. The abnormal rise in premium rates has already forced a sizable section of the population, especially senior citizens from renewing their health insurance policies. Many more may follow suit as the rise is almost double the consumer price inflation rate. There is possibility that premium rates may soon go up further, and there are two primary reasons behind this. Firstly, age restrictions on health insurance policies for individuals have been removed and secondly waiting periods for pre-existing diseases have been reduced from four to three years.
The spike in medical insurance premium rates were first noticed during the pandemic. To recover the amount spent to settle claims, various health insurance providers had increased premium rates. However, they did not feel the need to lower the rate after the return to normalcy, despite the claim ratio dropping to less than 90 per cent. At the same time it must be also be noted that 18 per cent GST on health insurance premiums have further complicated the matter. Health insurance companies claim that premium rates will come down considerably with lower GST rate. Many argue that GST on health insurance should be brought down to five per cent. Some even advocate that there should be no GST on health insurance as it comes under essential commodities. But it appears that the government is not willing to rethink GST rate, it argues that apart from centrally-sponsored Ayushman Bharat health insurance scheme, several state governments have their own health schemes to help the people who can avail those schemes for treatment.
The current situation calls for the insurance regulatory authority and medical insurance providers to sit together in search of an amicable solution to lessen the burden of the common people. It must be noted that healthcare is not a typical business. The philanthropic aspect of healthcare cannot be ignored at any stage. Thus, authorities should ensure that the industry is not driven only by profit. In this regard a recent observation made by the Supreme Court to make it mandatory for all private hospitals to charge patients according to the central government health scheme rates should be given proper consideration. Many argue that this will be the right step not only to ensure affordable treatment to the people, but also to keep health insurance premium rates in control as different hospitals charge differently to treat the same disease in the absence of a standard rate. Taking advantage of the situation, health insurance companies are also hiking premium rates at will. So government intervention is much needed at this juncture, lest the concept of a welfare nation be defeated as the people cannot afford medical care.
