If you think back just 20 years, health insurance in India was barely on anyone’s radar. Most families relied on savings, borrowings, or employer-provided cover for medical expenses. Fast forward to today, and private health insurance has become one of the fastest-growing segments of financial services in India. The journey has been remarkable, but the story is only getting started. When I started my clinical career, less than 5% of India had health insurance, but today, with the likely cut or abolition of GST on Health Insurance premiums, the paradigm is going to change.

How It All Began

The big shift came around 2000, when the government opened up the insurance market to private players. Until then, LIC and a few public insurers dominated the scene. With liberalisation, global insurers entered India, joint ventures were formed, and suddenly, people had choices.

In the early 2010s, less than 20% of urban households had a private health insurance policy. By 2023, close to 514 million Indians were covered under some form of health scheme. That’s massive progress, even if gaps remain.

Private Players Take the Lead

Here’s where it gets interesting — private insurers now account for over half of the health insurance market in India. Their growth has been powered by three big factors:

• Choice & Customisation: Private insurers introduced modular policies, critical illness riders, wellness benefits, and even mental health coverage.
• Digital First: Buying, renewing, and even claiming health insurance is now app-based for many.
• Premium Growth: In 2023, private insurers collected over ₹159 billion in premiums — a figure that’s growing at over 20% CAGR year on year.

Innovation is the Game-Changer

Unlike public insurers, private companies have been quick to test new ideas. Policies today can cover telemedicine, fitness-linked discounts, preventive health checks, and even reward you for healthy behaviours. In fact, 7 in 10 private insurers now have wellness-linked plans. This makes health insurance not just a financial product, but a lifestyle one.

Why This Matters for the Industry

So, what’s the big picture?

• For consumers: Health insurance is becoming more affordable and accessible. The proposed cut in GST from 18% to 5% could accelerate this further.
• For insurers: More products mean more revenue streams, but they’ll need to watch out for rising claims costs and pricing pressure.
• For hospitals: The relationship with insurers is getting more complex. Empanelment, cashless networks, and standardisation are all being debated.
• For regulators: The IRDA has to strike a balance — protecting consumers while ensuring insurers remain profitable.

Looking Ahead

The Indian health insurance market is expected to grow to USD 315 billion by 2034. Private insurers will drive most of this growth, not just by selling policies but by reshaping how Indians think about healthcare financing.

But here’s the catch: growth must be inclusive. If health insurance becomes just another profit-driven service, access will remain uneven. The winners will be the companies that build trust, simplify products, and genuinely help Indians better manage their healthcare costs.

Closing Thought

Private health insurance in India isn’t just about premiums and policies anymore — it’s about shifting from “illness care” to “wellness care.” And in that shift lies the real opportunity for both insurers and consumers.