Lok Sabha Question No. 3804 (UNSTARRED), answered on 2026-03-16
Subject: Rise in Health Insurance Premium
Ministry: FINANCE
Asked by: Smt. Mala Roy

3804. SMT. MALA ROY:

Will the Minister of FINANCE be pleased to state:

- (a) the rate of medical inflation from FY 2022-23, 2023-24, 2024-25 and 2025-26 till date;
- (b) the correlation between medical inflation rate and health insurance premium;
- (c) the details of rise in premium on health insurance on account of medical inflation in FY 2022-23, 2023-24, 2024-25 and 2025-26 till date; and
- (d) the details of the steps taken by Insurance Regulatory and Development Authority of India (IRDAI) to ensure transparency in premium fixation?

## ANSWER

## THE MINISTER OF STATE IN THE MINISTRY OF FINANCE (SHRI PANKAJ CHAUDHARY)

(a) to (c) Insurance Regulatory and Development Authority of India (IRDAI) has informed that no specific study has been conducted by it on the rate of medical inflation and its correlation with health insurance premium.

Further, besides medical inflation, there may be several reasons why health insurance premium increases from year to year. Some of the reasons are as under:

- i.  Increase in average age of policyholders - As the insured population ages, their health risks generally increase, leading to higher claims and, consequently, higher premiums are charged for higher ages.
- ii.  Increase  in  coverage  or  sum  insured -  If  policyholders  opt  for  higher  coverage  limits  or additional benefits (e.g., OPD cover, maternity benefits, critical illness riders), the premium will rise.
- iii.  Change in policy features -  Addition  of  new  features  and  benefits  such  as  enhanced  sum insured  limits,  inclusion  of  top-up/super-top  up  coverage  features,  modern  treatments coverage,  pre-existing  disease  coverage  (PED),  removal  of  capping  such  as  room  rent capping, waiting periods etc. can result in payment of higher premium by policyholders.

Since multiple reasons contribute to increase in individual premiums, the increase attributable to only medical inflation cannot be identified.

- (d) Some of the measures taken by IRDAI to ensure transparency in premium fixation of health insurance are as under:
1. Vide Regulation (6)(3)(c) of Chapter-II of IRDAI (Insurance Products) Regulations,2024, the Appointed Actuary of insurer is made responsible for periodical review of the products. He/she shall ensure that any revision either of the premium rates or the corresponding benefits or both with  respect  to  the  existing  products  shall  be  based  on  credible  underlying  experience  of

## GOVERNMENT OF INDIA MINISTRY OF FINANCE DEPARTMENT OF FINANCIAL SERVICES

## LOK SABHA UNSTARRED QUESTION No. 3804

ANSWERED ON MONDAY, 16 MARCH, 2026/PHALGUNA 25, 1947 (SAKA)

## Rise in Health Insurance Premium

- relevant  risk  parameters.  The  revision  shall  also  consider  the  analysis  of  policyholders' grievances and market feedback, if any.
2. Vide Circular dated 30.01.2025, IRDAI has also directed all general and health insurers offering indemnity  based  individual  health  insurance  products  to  senior  citizens  to  implement  the following with immediate effect:
- i. The insurers shall not revise the premium for senior citizens by more than 10% per annum.
- ii. In the following cases, insurers shall undertake prior consultation with the IRDAI:
- a. If the increase proposed in the premium for senior citizens is more than 10% per annum.
- b. In  case of withdrawal of individual health insurance products offered to senior citizens.

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