Health Insurance Premiums Surge 27% in January on GST Reform, Government Schemes

India's health insurance sector witnessed robust premium growth in January 2026, fueled by GST rate adjustments and increased government scheme participation. 

Premium Growth Breakdown 

Total health insurance premiums climbed 27.17% year-on-year (YoY) to ₹5,414.54 crore in January 2026. General insurers reported 20.4% YoY growth (₹2,187.98 crore), while standalone health insurers saw stronger expansion at 32.3% YoY (₹3,226.56 crore).  

This surge followed GST rationalization for individual retail policies, reducing tax burdens and boosting affordability. 

Government Schemes Lead Growth 

Government health schemes drove significant growth, with gross written premiums (GWP) reaching ₹2,480 crore in January 2026, up from ₹1,800 crore in January 2025 (+37.78%). Retail health insurance grew 27% YoY, outpacing 10% growth in group health plans. 

Private insurers' GWP increased 17% YoY to ₹1,740 crore, while public sector players experienced a 3% YoY decline to ₹89 crore. Standalone health insurers maintained strong momentum with 23% YoY GWP growth (₹45 crore), supported by GST exemptions and favorable base effects. 

Market Dynamics 

The GST rationalization for individual policies, effective from January 2026, lowered tax rates from 18% to 5%, enhancing product attractiveness. Government schemes like Ayushman Bharat expanded coverage, particularly in rural areas, driving volume growth. 

Standalone health insurers capitalized on these tailwinds, achieving double-digit growth through targeted retail and government partnerships. Public insurers faced challenges due to limited product diversification and scheme participation. 

Read More: Insurance Ombudsmen Saw 17,237 Life Insurance Grievances During FY25! 

Conclusion 

January 2026's 27.17% YoY health insurance premium growth reflects policy reforms and government initiatives. GST rationalization stimulated retail demand, while expanded public health schemes boosted volumes. Standalone insurers led the expansion, though private players also gained. This trajectory underscores the sector's responsiveness to regulatory and public health policy changes. 

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