Stories
Health Insurance Premiums Surge Despite GST Removal Due to Rising Costs
- •More than a year after GST was removed from retail health insurance in September 2025, policyholders are experiencing a mixed picture with some facing sharp premium increases of up to 35 percent.
- •Industry experts attribute the premium hikes to surging healthcare costs, medical inflation near 13 percent, expensive modern technology, and rising salaries for medical professionals.
- •Insurers emphasize that individual policy price hikes should not be confused with industry-wide repricing, as costs can vary based on age, geography, product changes, and sum insured.
- •While the GST exemption removed the 18 percent tax, base premiums continue to undergo periodic revisions to reflect actual treatment costs.
- •Many policyholders are using the savings from the GST removal to reinvest in better protection by upgrading their sum insured and adding comprehensive benefits.
Key Questions Answered
Even though the 18 percent GST on health insurance was eliminated on September 22, 2025, base premiums have continued to rise due to surging healthcare costs. Industry experts note that medical inflation—running close to 13 percent—along with rising expenses for modern medical technology, better equipment, doctor salaries, and real estate, are driving up renewal prices.
The GST exemption effectively removed the 18 percent tax previously charged on top of base premiums for individual, family floater, and senior citizen policies starting September 22, 2025. This lowered upfront policy costs and provided immediate savings, allowing many existing policyholders to reinvest those savings into enhanced coverage, higher sums insured, and additional riders.
An individual policy renewal cost can increase by more than the underlying portfolio-level revision due to age-related repricing when moving into a higher age bracket. Changes in selected coverage, product migration, or upgrading the sum insured can also cause the final renewal bill to jump significantly.
