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The rising medical inflation may lead to an increase in medical insurance premium as insurers are planning to hike the premiums which could be between 10% and 14%.
One of the main reasons for the increased medical costs is the emergence of private sector hospitals built with borrowed funds and the use of expensive non-invasive medical procedures. The rising wages for the paramedical staff and fees paid to consulting doctors is also a contributing factor.
With the rise in the cost of medical procedures, the premium goes up for the same sum insured. For instance, the cost of a normal delivery (childbirth) in a reputed hospital has increased from Rs 25,000 to Rs 40,000 in Mumbai, while in Chennai it has risen to Rs 40,000 from nearly Rs 20,000 three years ago. "We had revised it (premium) in 2013 and (current) medical inflation which is 14% as per our internal assessment, it is only natural that we increase our premium rates," said MS Sreedhar, MD of Royal Sundaram. His company is also working on rationalizing the several mediclaim policies. "For now we have too many mediclaim policies, we are working towards rationalizing the several policies into fewer ones," he said.
"India's trend continues to be one of the highest in the region. The numbers are understated due to competitive pricing pressures in the India marketplace," said a report by Towers Watson, a firm that specializes in HR practices used for wage fixing. “Medical inflation is running higher than the salary increase, higher than the general inflation,” Towers Watson added.