Medical inflation is a key driver of health insurance costs and premium increases. Health insurance companies are continuously looking for ways to better manage medical inflation to keep premiums competitive for customers and to mitigate lapses.
Despite adopting many initiatives on claims management, fraud management, provider networking and case management, most insurers are still struggling with medical inflation. With new players entering the market that have competitive pricing and product offerings, this becomes more important.
In this paper, Milliman’s Rachin Aggarwal and Joanne Buckle discuss common definitions of medical inflation, factors driving medical inflation in the short and long term and current medical inflation trends in India. They also cover the Insurance Regulatory and Development Authority of India (IRDAI) regulations on rate filing and restrictions on premium rate increases in the context of how companies are currently adjusting their premium rates for medical inflation. In addition, they provide insight into current practices and levels of premium increases in Indian and international health insurance markets and the way forward.
