Insurance Regulatory and Development Authority of India Move Fails to Cut Premiums: Health Insurance Gets Costlier Despite GST Removal

According to health insurance providers, medical inflation has gone up by 15% since last year. Before the GST cut, companies used to get input tax credit back, which has been discontinued.

Companies also say that the increasing number of claims and the aging population are increasing their costs, making health insurance more expensive. Meanwhile, one in three health insurance policies face some form of payment problem. They are either rejected or not fully paid.

Causes such as concealing pre-existing medical conditions and filing claims immediately after purchasing the insurance (where claims are received after a certain period of time) are cited as reasons for claim rejection.

Meanwhile, sources at the Insurance and Development Authority of India (IRDAI) say that to address this consumer problem, the Insurance Sugam digital marketplace will be launched this year.

Preparations for this have been underway for the past two to three years. This digital platform will begin with motor insurance, but health insurance will also be included within a few months.

Digital purchases will eliminate the need to pay agent commissions, reducing insurance costs. Currently, agent commissions are included in the premium paid annually and at the time of purchase.

IRDA is also regulating agent commissions, and information about agent commissions will be provided on premium bills.

IRDA's digital platform will feature a Public Insurance Registry (PIR), which will provide complete data on all companies and all customers, preventing unnecessary claim rejections.

IRDA will also monitor purchases and related claims in real time, ensuring real-time resolution of consumer issues.

Just last week, a notification allowing 100% foreign direct investment in the insurance sector was issued. It is expected that this decision will attract a large number of foreign companies to the Indian insurance market, and competition among companies will reduce insurance costs.