The constant increase in the price of goods and services is known as inflation. Its influence is seen in almost every area of our life, including healthcare, and goes far beyond petrol and food costs. The rising expense of healthcare is often outpacing inflation, making health insurance premiums a major financial hardship for many.
Medical inflation can not only increase the costs of medical treatments but also affect your lifestyle in many ways. Nevertheless, read the blog further to learn about the causes of medical inflation in the country and how you can deal with it.
What Causes Medical Inflation?
Several factors contribute to the increasing rates of medical inflation. These include the following:
- Technological Advancements
Innovation and advancements in medical technologies are targeted to bring more effectiveness and precision to the process of medical treatments. However, the costs of developing those technologies contribute to the rise in overall healthcare costs.
- Rise Medical Tourism
When a country is known for providing high-quality medical services, it tends to attract a lot of global travellers to come and seek treatment. The same happened in India, where most of the international patients opt for expensive surgeries, organ transplantation etc. which increased the costs of healthcare facilities.
- Aftermath of COVID-19
With the advent of the global pandemic COVID-19, the demand for medical treatments increased rapidly. This eventually led to a rise in the expenses of healthcare equipment like ventilators etc. leading to a 10% to 20% increase in the healthcare rates.
- Increasing Demand for Healthcare Services
The more advanced medical treatments the better it gets for ensuring the well-being of the patients. Hence, more medical advancements lead to a higher demand for it, which eventually increases the overall healthcare expenditure.
- Higher Costs of Raw Materials
The higher cost of raw materials is also responsible for the rise of medical inflation. This includes warehouse, freight costs, higher import taxes, emergency aid expenses and other related costs.
- Change in Treatment Cost
The medical expenses borne by individuals based on their healthcare requirements refer to the costs of basic components. A change in this treatment cost per person due to factors like personnel, hospital consumables, consultation etc. also contributes to the increase in the overall healthcare expenses.
How Can Medical Inflation Impact Your Health Insurance?
Medical inflation has great impacts on health insurance providers, and eventually the lives of policyholders. Go through the following points to learn how:
- Rising Cost of Health Insurance for Senior Citizens
Senior citizens may be more prone towards disease and injuries. Thus they require expensive medical treatments more often. Medical inflation can create a financial burden for them since they need to pay higher premiums for health insurance.
- Premium Hike in the Transition to Older Age Groups
Policyholders usually face a premium hike as they move towards older age. This hike can be even higher due to medical inflation, which sometimes can be as high as 50%.
- Higher Costs of Purchasing Health Insurance
With increasing costs of medical inflation, insurance providers undergo a financial burden, which eventually gets passed on to the policyholders through higher premium amounts.
What Can You Do To Manage the Impact of Medical Inflation on Your Health Insurance?
There are two effective steps you can take to ensure you have lesser impacts on your life due to medical inflation in health insurance, which include the following points:
- Purchase Health Insurance Early
Since age and health are the key determinants of your health insurance premiums, it is better to apply for the same while you are still young. It enables you to lock in your health insurance plan with adequate coverage at lower premium rates.
- Maximise Coverage
Make sure your existing health insurance plan satisfies your needs by reviewing it. Take into account including riders or additional coverage for particular medical services, like dental or eye care. Maximising your coverage before the premiums sky rockets will only help you deal with the inflation situation without emptying your pocket.
Role of Policymakers and Insurers
Inflation-related effects on health insurance can be managed by people, but policymakers and insurers must also deal with the problem. Governments may contribute by putting laws into place that encourage affordability, openness, and competition in the healthcare industry. In order to increase efficiency and cut costs, insurers may make a difference by funding cutting-edge care delivery models, using technology to expedite procedures, and developing alliances with providers.
Final Words
To sum it up, in the past few years, the country has witnessed a massive increase in medical expenses. This medical inflation has adverse effects on how health insurance providers operate their services overall. However, such a rise in the overall medical expenditure calls for serious attention to take necessary steps so that you can ensure your financial stability to endure medical emergencies in your family.
