Premiums for group health insurance policies are likely to get costlier from coming April owing to the losses incurred by many insurers due to an overwhelming number of claims by corporate employees. It is estimated that the premiums for group insurance policies might increase by about 50% to 60%. Employees are likely to bear these increased costs in the future since most employer-provided insurance policies involve a certain level of copayment.
Group health insurance policies typically involve insuring a group of individuals working for a particular company. Corporates often negotiate high discounts for the premium amount they pay for group health insurance policies. Moreover, group health insurance policies cover pre-existing conditions right from day one, and most often coverage is offered to employees, their parents, spouse, and children as well.
Due to this nature of high discounts and overwhelming claims, group health insurance policies often turn out to be a costly affair for most health insurance companies. It is estimated that some companies have loss ratios to the tune of 160% in the group health insurance segment. In other words, they pay out Rs.160 in claims for every Rs.100 obtained in premiums.
The risky nature of group insurance has also made many private health insurance companies to completely exit this segment. Group health insurance is offered by most of the state-owned general insurance companies. These companies have incurred claim ratio significantly higher than 100, and they are losing money in the industry.
Considering all these factors, it is likely that the premium charges for group insurance is bound to get costlier in order to minimize the losses sustained in this segment. From now on, insurance companies will check out the burning cost of each business organisation and set the premium rates accordingly.
As the overall charges increase for group health insurance, it is likely that the co-payment charges paid by employees will also increase in the future.
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