Health Insurance Price Hike: Health insurance premiums are set to rise for those living in metro cities like Delhi, Mumbai, and Bengaluru. The reasons are rising medical costs, pollution, and lifestyle diseases. Experts say that insurance companies are now setting premiums based on the city.
Health Insurance Price Hike: If you live in a metro city like Delhi, Mumbai, or Bengaluru, be prepared, your health insurance premiums may increase. Insurance companies are considering city-specific rates, and this change could prove costly for residents in Tier-1 cities. Let’s find out the reason behind this.
Why are premiums increasing?
India Today quoted Shilpa Arora, co-founder and COO of Insurance Samadhan, as saying that the difference in premiums by city is directly linked to risk and treatment costs. She explained that hospitalization, diagnostic tests, and room rates are higher in larger cities. Furthermore, the growing network of corporate hospitals has also increased costs, leading to higher claims.
He said that urban lifestyles themselves are causing illness. “Diseases like hypertension and diabetes are now common. This increases long-term claims, so insurers factor them into pricing.”
Pollution becoming a factor
According to him, pollution is also playing a major role in increasing insurance claims. He said, “In cities like Delhi, the number of patients with asthma, COPD, and heart disease is continuously increasing. This is leading to higher claims and claim amounts.” Corporate hospitals in major cities already have high fees, which also leads to higher claim amounts.
How is the premium determined?
Abhishek Kumar, a SEBI-registered investment advisor and founder of SahajMoney, explains that insurance companies divide the country into zones.
“Zone 1 – metro cities, Zone 2 – tier-1 cities, and Zone 3 – rest of India. This system forces people in metro cities to pay 10 to 20% higher premiums,” he said. This prevents people in smaller cities from bearing the burden of expensive medical treatment in larger cities.
Will there be a separate insurance cover for pollution?
Arora said, “Just like there were separate plans for COVID or dengue, a separate add-on or cover could be introduced for pollution-related illnesses.” Abhishek Kumar believes, “Most health policies already cover illnesses like asthma, COPD, and bronchitis, so there’s no immediate need for new coverage.” He said it would be better if insurance companies focused on OPD coverage, health check-ups, and rider benefits to reduce the costs associated with respiratory illnesses.
Is this system fair?
Experts believe that charging higher premiums from people in metro cities is like unnecessarily punishing them. Kumar says, “People can’t control factors like pollution or traffic, yet they still have to pay the price.” He added that IRDAI has instructed insurance companies to maintain transparency in premiums and to substantiate all pricing with data.
The challenge facing insurance companies
The real challenge now is how insurance companies can maintain fair pricing while also making policies affordable. Arora suggested that companies should negotiate rates with corporate hospitals to keep treatment costs under control. He said, “Flexible coverage and city-based add-on policies allow customers to choose the protection they need.”
Health insurance now covers not just the disease, but also your city, lifestyle, and air quality. In the future, it’s wise to consider your city’s zone, coverage, and costs when choosing a policy.
