With healthcare inflation at 13% and critical surgeries costing over ₹50 lakh, your ₹5L cover may no longer be enough. Let's break down the harsh truth.

I remember thinking a few years ago that a ₹5 lakh health insurance policy was a responsible step. Solid, right? A safety net for a rainy day.

But today, in 2025, that umbrella has holes. Gaping ones.

Because the cost of medical treatment in India has exploded. And it's time we stop sugarcoating the truth: being underinsured is now a bigger threat than being sick.

Let me walk you through the data, the reactions, the reality check—and what you can actually do to protect yourself and your loved ones.

Medical Inflation in India: A Silent Financial Pandemic

India is currently facing healthcare inflation at 13% annually, outpacing not just income growth but also general inflation. What does this mean in practical terms?

Here's a decade-long cost comparison of major surgeries:

That ₹5 lakh health cover? It's not even a quarter of what some procedures cost now. The average health claim itself has jumped from ₹1.7L (2013–2020) to ₹4.8L (2020–2024).

And it gets scarier.

The Real Risk: Underinsurance

Underinsurance isn't just a financial hole; it's an emotional time bomb.

Many people believe that having "some" insurance is enough. It isn't.

What if your coverage stops at ₹5L but your treatment needs ₹30L?

• Do you drain your savings?
• Borrow money?
• Crowdfund your survival?

This isn’t fear-mongering. This is happening every single day in Indian ICUs, oncology wards, and transplant units.

What Experts Are Saying

Industry professionals, healthcare providers, and financial planners are sounding the alarm:

• Dr. Sachin Jadhav questions why coverage is marketed based on a few diseases, yet notes that even ₹10L is often inadequate.
• Dinesh Agrawal highlights that the average claim is about to breach ₹5L, making higher-value claims a time bomb.
• Healthcare consultants stress the need for Mental Health, Critical Illness, and Accident Covers as additional layers.

The Common Indian Dilemma

"I can’t afford ₹50K premiums."

Most families in India earn less than ₹50,000/month. High premiums and policy complexities make insurance inaccessible or seem irrelevant. And senior citizens often face even higher premiums with stricter clauses.

Yet, skipping insurance altogether leaves you completely vulnerable.

Top-up plans and customized insurance options are a bridge, but we need:

• Transparent pricing
• Better underwriting (HCX adoption may help)
• Govt-regulated tariffs

Is This a Scam? Who's Profiting?

Some public reaction suggests that this is just a ploy to sell bigger insurance policies. Let's be fair.

Yes, insurers have vested interests.
But that doesn't make the risk any less real.

What should concern us more is:

• Claim denials on flimsy grounds
• Lack of standard treatment tariffs
• Hospitals charging different rates for insured vs. cash-paying patients

That’s why critics argue we need:

• More public healthcare investment
• More regulation
• Better policy transparency

✉️ Better Than Bigger: Smart Coverage Strategies

It’s not always about buying the biggest cover. It's about buying right.

Here’s a realistic strategy:

1. Start with a ₹10L base cover (if possible)
2. Add a top-up policy for 25L to 1Cr (cheaper, kicks in after base)
3. Include Critical Illness rider
4. Look for zero sub-limit, no co-pay plans
5. Don’t forget Mental Health & OPD coverage

⚡ Why This Matters for the Middle Class

The lower-middle and middle classes are the most impacted:

• Too rich for free public schemes
• Too poor to afford premium private care

They are crushed between private hospital bills and underwhelming insurance plans.

This is a wake-up call.
If we don’t reimagine how we view health insurance now, we’ll pay the price later—financially, emotionally, even physically.

Public Healthcare Must Step Up

We need:

• Government frameworks for uniform pricing
• IRDA reforms for claim transparency
• Investment in public health infra (still <2% of GDP!)
• Private-public partnerships that aren’t exploitative

Only then can we break the American model trap of expensive, inaccessible healthcare.

Overall Public Sentiment: Mixed to Critical

The majority of respondents express deep skepticism, frustration, and cynicism toward the existing Indian health insurance ecosystem. While a few acknowledge the need for baseline insurance, the broader sentiment highlights underinsurance, skyrocketing healthcare costs, and insufficient policy coverage. Many also raise concerns about inefficiencies, claim denials, and lack of affordability, especially for the vulnerable sections of the population.

Thematic Analysis & Public Viewpoints:

1. ₹5–10 Lakh Coverage Is Not Enough

• Many participants challenge the assertion that ₹5–10L insurance is adequate.
• They cite that critical illnesses like cancer or cardiac issues often cost ₹15–50L, especially in private hospitals.
• Average claim values (~₹4.7L) may look sufficient, but high-cost outliers are devastating for families.

“It’s not the average but the claims higher than average that bankrupt families.”

2. Underinsurance Is Real — But Not the Only Problem

• While some agree that more coverage is ideal, they argue the real issue is systemic:
• High medical inflation (13–14% yearly)
• Poor claim processing experiences
• Unregulated and dual pricing by hospitals (cash vs insurance)
• Lack of preventive health focus in current insurance models

“Buying a fat policy won’t solve a broken healthcare system.”

3. The Industry Has Structural Flaws

• Common grievances:
• High Customer Acquisition Costs (CAC) by firms like Policybazaar
• Unjustified premium hikes
• Fraud, wastage, and abuse not tackled by insurers
• Opaque underwriting practices
• Inconsistent hospital contracting and network lists

“Insurers haven’t reduced costs and continue to deliver poor CX — why should we trust them?”

4. Public vs Private: Deep Trust Deficit

• Many compare India's drift toward U.S.-style private healthcare unfavorably.
• Concerns that it leads to:
• Denial of essential services
• Exploitation through inflated bills
• Exclusion of the elderly or those with pre-existing diseases (PEDs)

“We are importing the worst of America’s healthcare system without their safeguards.”

5. Affordability Crisis

• Strong resentment that health insurance is becoming unviable:
• ₹70K annual premium for a ₹3L policy for senior citizens
• ₹50K premium targeted at just the top 10% earners

“When even ₹1L coverage is unaffordable for many, pushing ₹10L makes no sense.”

6. Better Alternatives Suggested

• Many propose systemic, structural reforms:
• Bismarck Model (Europe): Non-profit insurance, minimal OOPE, employer/state-funded
• Increased public investment in healthcare (India still <2% of GDP vs global 8–10%)
• Price regulation and standardized treatment costs
• Preventive screening mandates to reduce late-stage hospitalization

“We need assurance, not just insurance.”

7. Call for Multi-Pronged Coverage

• A few nuanced voices support:
• Base policy + top-up model
• Separate CI (Critical Illness), Accident, and Mental Health Riders
• Focus on starting early and slowly increasing coverage based on affordability

“At 35, start planning a CI cover, mental health rider, and top-up. Build over time.”

8. Blunt Criticism & Anger

• Some comments include harsh language, political criticism, and disillusionment:
• Accusations of insurance lobbying
• Frustration at government inaction (IRDAI, lack of price controls)
• Accusations of “paid promotion” in articles pushing ₹10L coverage

“This is paid propaganda to make people pay more. Where’s accountability for rejected claims?”

9. Resigned and Fearful Tone

• Many feel helpless: "Bhagwan bharose"
• There's a deep fear of future medical bills, with some already seeing financial ruin from previous treatments.
• Many believe the healthcare system is on the verge of collapse if reforms aren’t implemented soon.

Summary of Public Consensus

What the Public Really Wants

• Fairer Insurance: No vague clauses, no sudden exclusions, faster claim processing
• Regulated Pricing: One transparent price for each treatment, regardless of payment method
• Stronger Public Healthcare: More funding, accountability, and infrastructure
• Affordable Options for All: Not just ₹10L for the privileged — even ₹1L for the poor can be life-saving
• Accountability Over Promotion: Focus on real-world problems like denials and costs, not selling policies

❓ FAQ: What Indians Are Asking

Q1: Is ₹5 lakh health insurance really useless in 2025?
A: It’s not useless, but it’s often insufficient for critical treatments. Consider it a starting point, not a finish line.

Q2: What’s the ideal coverage amount today?
A: Experts recommend at least ₹10L, plus a top-up of 25L–1Cr, depending on age and income.

Q3: Can I get a good policy at a low premium?
A: Yes. Use a top-up policy after a ₹5L or ₹10L base. It dramatically reduces premium cost.

Q4: Are insurance claims often rejected?
A: Sadly, yes. Rejections occur due to hidden clauses. Always read the fine print and compare customer reviews.

Q5: What can the govt do?
A: Enforce price controls, invest more in public hospitals, and make claims process transparent.

Q6: Is the situation hopeless for low-income earners?
A: No. Look into Ayushman Bharat and state-specific health schemes, and consider group/employee insurance options.

Q7: Are there alternatives to insurance?
A: Emergency medical funds, health EMIs, and preventive screening plans are supplemental options—not substitutes.

Conclusion:
Don’t fall for the illusion of safety. ₹5L coverage was once enough; it no longer is.

We can’t control illness, but we can control our preparedness.

Rethink your policy. Rebuild your plan. Because in today’s India, health insurance is no longer optional – it’s survival.