Health cover costlier now

Healthcare has become costlier now. Recently, not only have premiums gone up for individual health policies, but also for group insurance policies, which used to be a much cheaper option.

With free pricing coming into effect this year, it has become difficult for insurance companies to sustain the subsidy they extended to corporates seeking group health insurance. Until 2007, insurance companies cross-subsidised health insurance for corporates along with fire and property insurance.

Higher premiums in group policies would mean higher payouts either for corporates or individuals, depending on who pays for the cover.

Group insurance
Corporates that offer health insurance to their employees have seen a rise premiums rise by almost 50 per cent. The premium paid on this account last year was Rs 1,200 crore (Rs 12 billion).

Says Shreeraj Despande, head (health, travel and accident insurance), Bajaj Allianz General Insurance: "Technically, the premiums have not gone up. Rather, the group health insurance given to corporates has undergone a correction since it was the portfolio that was cross-subsided earlier with regard to other segments."

Individual insurance.
Public sector insurers, too, have hiked health insurance premiums for individuals. National Insurance, New India Assurance and Oriental Insurance have all hiked their premiums rates.

The only consolation, perhaps, is that the premiums are still much less than what private insurers charge.