Medical inflation in India is climbing faster than ever. Hospitalisation costs, diagnostics, medicines, and procedures have all gone up sharply in recent years, and insurers are feeling the heat.
As treatment expenses rise, so do claim payouts, forcing companies to periodically reassess premiums and coverage structures to keep the system viable.
“Medical inflation in India has been rising rapidly due to advancements in medical technology, higher hospitalisation costs and an increase in chronic and lifestyle-related diseases,” says Ajay Shah, Head–Distribution, Care Health Insurance.
“Insurers must periodically review rates to preserve the long-term stability of the risk pool. Without such adjustments, the ability to provide effective health security will be compromised,” Shah added.
To manage this delicate balance, insurers are increasingly moving towards flexible plan structures that allow policyholders to tailor coverage based on their financial comfort. Customers can now choose between varying sum insured amounts, deductible-based policies, or super top-up covers that add an additional layer of protection at a relatively lower cost.
These innovations help families save on premiums while ensuring that they don’t compromise on adequate health coverage. “Even small design changes—like introducing higher deductibles or opting for top-up plans—can help keep premiums affordable in a high-inflation environment,” Shah adds.
In addition, insurers are expanding preventive and wellness-based incentives. Policyholders who undergo regular health check-ups, maintain fitness goals, or use digital health-tracking tools can now earn premium discounts or policy benefits.
These wellness-linked features not only encourage healthier lifestyles but also help insurers reduce claims in the long run.
To keep premiums from spiralling, insurers are also striking negotiated tariffs with network hospitals. Cashless tie-ups allow them to manage treatment costs better and bring predictability to claim expenses. Over time, this strategy helps stabilise pricing for policyholders too.
For consumers, it’s important to actively review and optimise their policies. Opting for long-term covers, buying young, and choosing plans with restoration and no-claim bonuses can go a long way in keeping future costs manageable.
For middle-class Indian families, health insurance is no longer optional, it’s a core pillar of financial planning. A single hospitalisation can derail years of savings or force families into debt.
With healthcare inflation outpacing salary growth, an adequate health cover acts as a crucial financial shock absorber.
“Health insurance is not just about reimbursement of expenses,” Shah said. “It ensures that long-term goals — a child’s education, home purchase, or retirement—are not jeopardised because of an unexpected medical crisis.”
Medical inflation is inevitable, but the financial stress doesn’t have to be. By customising plans smartly, using wellness-linked rewards, and reviewing coverage regularly, policyholders can stay protected without breaking the bank.
In a high-cost healthcare era, being insured smartly is just as important as being insured at all.
(Disclaimer: This article is for informational purposes only and should not be considered financial or insurance advice. Readers are advised to consult qualified professionals before making any investment or policy-related decisions. India Today does not endorse or recommend any specific insurance product or company.)