Health Claims Surge by 30% In Just 3 Years: Here’s The Reason Why

If there is one thing the Covid-19 pandemic has taught us, it’s this: Health is wealth. However, the devil in the corner i.e. medical inflation increasingly making healthcare more expensive. This makes health insurance a must-have for many Indians to keep up with rising medical expenses.

The latest Insurance Claims Trends 2024 by Policybazaar.com shows that there has been a 30 per cent rise in health insurance claims over the past three years. Such numbers are not just statics, rather they tell a story about how India’s health landscape is evolving.

What Is Driving Up Health Claims?

The report shows that it is a mix of seasonal and chronic conditions that are driving up health claims. Take fever, for instance. During the monsoon and winter months, hospitals across the country are often flooded with causes of seasonal illnesses like viral fever. 

But it is not just short-term issues, rather chronic conditions such as heart disease, diabetes, and cancer are also on the rise. “Seasonal diseases create short, sharp spikes in claims, but chronic illnesses are now a year-round reality,” the report highlights.

Cost of Healthcare on an Upward Swing

As medical inflation quickly outpaces the general inflation rate in India, the numbers reiterate this burdening ordeal for the policyholders. The average insurance claim payouts have jumped from Rs 62,014 in FY23 to Rs 70,152 in FY24. 

By FY25, it is projected to reach Rs 81,025. These are not just numbers, they are also a reflection of rising healthcare costs and an increasing reliance on insurance to foot the bills.

The insurance claims trend report notes that “it’s not just about having insurance anymore; it’s also about having the right amount of coverage”.

The trend further shows that more policyholders are making claims, and they are claiming higher amounts than ever before.

Urban Cities Drive Most Claims

The dwellers of urban states, like Maharastra and Delhi, are the ones making most health insurance claims. Collectively, these two account for nearly a quarter of the total claims however the claim size is reportedly ‘average’.

In Delhi, for instance, the average payout is Rs 1,00,600 while Tamil Nadu tops the chart with Rs 1,13,074.

Why the higher payouts? These urban cities not only have higher healthcare costs but also better access to advanced medical facilities. It is like a double-edged sword where one finds better treatment options but at a heftier price tag.

Young Adults Are Filing Most Claims!

Contrary to what many will believe, it is not the elderly who mark up the most number of claims. Young adults aged between 18 and 35 years now account for nearly 38 per cent of the total claim amount paid. This is higher than any other age group, the report finds. This is followed by age groups between 36 to 45 who account for around 29.50 per cent of claims.

“The higher share of claims from younger adults (18-35) reflects a combination of seasonal illnesses (fever, viral infections) and rising claims for chronic conditions like diabetes, which are increasingly diagnosed at younger ages,” the report finds.

The trend also underscores the need to buy health insurance when young and healthy.

The numbers also reveal an interesting gender gap wherein 86 per cent of claims are filed by men. This might be because men are more likely to have health insurance, but it also raises questions about women’s access to and awareness of health coverage.

Rising Claims Frequency

The claims frequency has been on an upward swing, it has surged from 5 per cent in FY23 to 6.39 per cent in FY25. 

However, this is not a negative development since such an uptick shows a greater awareness about health insurance among people in addition to improved access to healthcare services.

“The frequency of claims has steadily increased over the last three years. It means that more policyholders are utilizing their health insurance benefits,” the report states.

What Does This Mean For You?

As healthcare costs are only going to rise given growing medical expenses, the trend in claims is a stark reminder of the financial safety net that health insurance provides. However, it is not enough to just have a policy, you also need to ensure that the coverage under your plan is on par with the increasing costs of treatments.

As younger adults make more claims, those who do not have insurance should review their financial strategy and assess the need to start early with an insurance plan to clock in premiums at the lowest price and accumulate comprehensive coverage.