Insurance policyholders may get relief as hospitals likely to hold rates in 2026: Sources

Hospitals are likely to freeze rates for 2026 following discussions between insurance companies and the government, sources told CNBC-TV18. The move could offer relief to policyholders at a time when insurers are struggling with higher costs from recent GST changes.

Sources said the Department of Financial Services (DFS) intervened and facilitated meetings between hospital heads and insurance firms to explore the possibility of holding treatment rates steady next year. The discussions are understood to have taken place after insurers raised concerns about their ability to absorb higher operational costs arising from GST adjustments without passing them on to customers through premium hikes.

Medical inflation in India is currently estimated at around 14%. Typically, insurers respond to this inflationary pressure by raising premiums by 8-12% each year. However, with the GST changes already increasing their cost burden, insurers may find it challenging to continue with such revisions while also transferring the full benefit of the 18% GST cut to policyholders.

If finalised, the move to hold hospital rates could help stabilise healthcare costs and limit premium hikes in the coming year.