{"id":184573,"date":"2025-08-29T12:39:21","date_gmt":"2025-08-29T12:39:21","guid":{"rendered":"https:\/\/www.europesays.com\/us\/184573\/"},"modified":"2025-08-29T12:39:21","modified_gmt":"2025-08-29T12:39:21","slug":"from-commissions-to-care-ethealthworld","status":"publish","type":"post","link":"https:\/\/www.europesays.com\/us\/184573\/","title":{"rendered":"From Commissions to Care, ETHealthworld"},"content":{"rendered":"

\"\"\/India\u2019s health insurance industry is booming. Policies are being pushed aggressively, premiums are climbing every year, and insurers claim to be covering more Indians than ever before. But beneath the marketing gloss lies a troubling question: Are these premiums really funding care\u2014or just fuelling commissions and corporate overhead?<\/p>\n

At its core, health insurance is meant to be simple. Many pay a little, so a few don\u2019t have to pay a lot. Insurers collect premiums from a large pool of people and use those funds to cover the medical expenses of those who fall ill. Healthy policyholders subsidise the sick, knowing that one day the roles may be reversed. It\u2019s a system built on mutual protection.<\/p>\n

But in India, this promise is breaking down.<\/p>\n

The efficiency of any insurance system is measured by its Medical Loss Ratio<\/a> (MLR) — the percentage of premiums actually spent on patient claims. The remainder is absorbed by commissions, administration, and management overhead. And here is where the numbers start to look ugly.<\/p>\n

An analysis of FY2025 financial disclosures of Standalone Health Insurance Companies shows just how distorted the system has become:<\/p>\n\n<\/td>\nPremium Collected (net) <\/td>\nClaims incurred <\/td>\nMedical Loss Ratio (MLR) % to Premium<\/td>\nCommission as % to premium<\/td>\nManagement Expenses as % to premium<\/td>\n<\/tr>\n\nStar Health Insurance<\/td>\n14,822.2<\/td>\n10,419.4<\/td>\n70%<\/td>\n15%<\/td>\n17%<\/td>\n<\/tr>\n\nCare Health Insurance<\/td>\n 5,328.7 <\/td>\n3,074.3<\/td>\n58%<\/td>\n20%<\/td>\n22%<\/td>\n<\/tr>\n\nNiva Bupa<\/td>\n4,894.5<\/td>\n2,996.5<\/td>\n61%<\/td>\n22%<\/td>\n22%<\/td>\n<\/tr>\n\nManipal Cigna <\/td>\n 1,459.2 <\/td>\n930.7<\/td>\n64%<\/td>\n24%<\/td>\n28%<\/td>\n<\/tr>\n

Source : Financial Statements<\/p>\n

The data reveals a systemic imbalance: 15\u201324% of premiums go to commissions, another 17\u201328% to management expenses, while as low as 58 per cent (as in case of Care Health Insurance) is directed toward medical care\u2014the very purpose of health insurance. MLR will drop further down to 54%, once the income on investments are added to Premium Collected. <\/p>\n

Compare this with global benchmarks:<\/strong><\/p>\n

In the U.S., regulators mandate that at least 80- 85% of premiums must go toward patient care. In Germany, France, and the Netherlands, administrative and sales costs are capped at 10%, ensuring the bulk of contributions flow to treatment.<\/p>\n

India\u2019s model, by contrast, is veering dangerously toward inefficiency. Premiums rise every year\u2014often by 10\u201315%\u2014but trust in insurers keeps falling. Customers pay more, hospitals are squeezed, and patients still find themselves battling for approvals or forced to pay out of pocket. It is little wonder that trust in health insurers is eroding.<\/p>\n

The uncomfortable truth is India\u2019s health insurance industry is behaving less like a safety net and more like an inefficient sales machine. Growth is measured not in how much care is funded, but in how many policies are sold. That is not insurance but it is marketing masquerading as protection.<\/p>\n

If India wants health insurance to be meaningful, not just profitable, two things must happen:<\/p>\n

    \n
  1. Regulators must set MLR thresholds — forcing insurers to spend at least 80\u201385% of premiums on patient care.<\/li>\n
  2. Costs of customer acquisitions are reduced to single digit<\/li>\n
  3. Cap management and administrative expenses \u2014 health insurance must fund healthcare, not corporate luxuries.<\/li>\n<\/ol>\n

    India\u2019s health insurance industry needs to shift its focus from aggressively selling policies to transparently funding care. Unless efficiency improves and regulations enforce higher MLR thresholds, the promise of health insurance will remain hollow\u2014leaving both patients and hospitals short-changed.<\/p>\n

    It\u2019s time for health insurance in India<\/a> to grow up\u2014by moving from selling policies to truly funding care.<\/p>\n

    The article is written by Dr. Girdhar Gyani, Director General at Association of Healthcare Providers<\/a> (India)
    (DISCLAIMER: The views expressed are solely of the author and ETHealthworld.com does not necessarily subscribe to it. ETHealthworld.com shall not be responsible for any damage caused to any person\/organisation directly or indirectly)\n <\/p>\n