Planning to renew your health insurance policy or buy a new one? Be prepared to shell out a hefty amount. Public sector insurers have raised the premium rates steeply.

New India Assurance, the country’s largest non-life insurance firm, has increased the Mediclaim premium rates by 14 to 37 per cent, depending on the sum insured and age bands.

National Insurance, another public sector insurer, too has revised premiums by 20 to 35 per cent. Oriental Insurance is working on new premium rates. United India Insurance says it is in the process of filing for a 20 per cent increase in its family floater policy premium.

Public sector insurers control nearly 60 per cent of the health insurance market. Their rate revisions come after a gap of six years. In contrast, private insurers have been increasing premiums more often.

New regulations issued in February require insurers to keep their premium rates unchanged for three years.

In New India’s revised product called Mediclaim 2012, the premium for a Rs 1 lakh cover for people in the age group of 66 to 70 years has increased by 37 per cent to Rs 6,200 compared from Rs 4,530 (in Mediclaim 2007).
The increases are lower in younger age bands. A person aged 45 years going in for a Rs 5 lakh cover will have to pay 20.4 per cent more while renewing his policy. A person aged 35 years will have to pay 18.78 per cent more on his next renewal in the revised product.

New India continues to charge premium based on the place where healthcare is taken. It has split the country into four zones, depending on the average cost of healthcare.

Zone I comprises the urban agglomeration of Mumbai.

Zone II has Delhi and NCR, Bangalore, Chennai, Hyderabad/Secunderabad, Ahmedabad, Baroda and Kolkata.

Zone III includes all states other than Zone I, II and Zone IV. Zone IV consists of Bihar, Orissa, Arunachal Pradesh, Assam, Manipur, Meghalaya, Mizoram, Nagaland, Tripura, Sikkim, Jharkhand, Chhattisgarh, Uttarakhand, Jammu and Kashmir.

The premiums are higher in Zone I than in other zones.

1) Up to the age of 30 years, the premium increase is 20 per cent,

2) in the 40s age group, the increase is between 25 and 30 per cent.

3) For those above 55 years, the increase is 35 per cent.

The four public sector general insurers spend more on claims than they earn from health insurance. For the four together, for every Rs 100 earned as premium, the total outgo on claims, commissions to agents, third- party administrator’s fees and administrative costs is Rs 120.