Introduction

People living in Delhi now find yet another result of the dreaded air pollution: a hike in health insurance premiums. In the year 2024, there was unprecedented pollution in the capital, resulting in increased respiratory and cardiovascular ailments. This resulted in the insurers thinking of raising premiums between 10% and 15% on new health policies in Delhi.

Every winter, just what little fresh air is left in the city gets completely wiped out by a smoky mix of vehicle emissions, factory pollution, construction dust around the site, and smoke from the burning of crops in the neighboring states. On November 18, 2024, Delhi's air quality was deplorable with an all-time high seasonal reading of 491 on a scale of not more than 500, which indicated severe pollution levels.

The result is a visible increase in hospital admissions for respiratory and cardiovascular diseases. By the second half of 2024, nearly 18% of patients had to be hospitalized due to respiratory ailments compared to 5-6% in the first half of the year. The increase in health claims with a respiratory disease connection in Delhi was 8.3% between the Financial Year 2023 and the Financial Year 2025.

As a result, leading insurers such as Star Health and ICICI Lombard have also pointed out that polluted air is now going to be the most important factor in defining premiums if pollution levels are consistently this bad. Bajaj Allianz General Insurance has also suggested that insurers may come up with specific clauses to account for pollution health risks in their policy terms.

But before doing so, the insurers have to provide proof to the Insurance Regulatory and Development Authority of India (IRDAI) to be able to establish a direct relationship between polluted air with higher health claims. It would involve long-term studies on the rate and duration of hospitalization purely as a result of air pollution.

It will be the first time in the country's history that air pollution will directly affect health insurance premium calculation if it comes to fruition. This will also open up the way for other cities facing the same serious air quality problem to follow similar patterns./

Right now, a policy of health insurance, spanning from 8 to 33 lakh, costs somewhere between Rs 8000 and Rs 32000 a year for a family living in Delhi. The rates going up to ten to fifteen percent may make health insurance into being unaffordable to many, especially those with the most vulnerability to pollution including, seniors, children, and outdoor workers. 

Like Delhiites and other citizens who have to endure bad air quality, they should also keep track of possible changes in the cost of health insurance. Knowing how environmental factors work in determining insurance costs is vital in making informed choices for healthcare coverage.