Health insurance premiums in India have skyrocketed by over 27% in January 2026, a worrying trend for millions of policyholders. This unprecedented jump is attributed to the abolition of Goods and Services Tax (GST) on health insurance policies and the government’s recent schemes to boost healthcare coverage.
The GST exemption has led to a significant increase in the cost of medical procedures and treatment, which insurance companies are now factoring into their premiums. This means that policyholders can expect to pay more for the same coverage, a development that has left many concerned about the affordability of health insurance.
Government Schemes Contribute to Premium Hike
The government’s ‘Ayushman Bharat’ scheme, aimed at providing universal health coverage to over 500 million people, has also contributed to the premium hike. The scheme’s benefits, including free medical procedures and cashless hospitalization, have increased the demand for health insurance policies, driving up premiums.
Another scheme, ‘Pradhan Mantri Suraksha Bima Yojana’ (PMSBY), which provides accidental insurance coverage to millions of people, has also led to a surge in demand for health insurance policies, putting pressure on premiums.
With the GST exemption set to continue, it remains to be seen how insurance companies will adjust their premiums to balance the increased costs of medical procedures and treatment. One thing is certain, however: health insurance premiums will continue to be a cause for concern for millions of Indians.