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Is Medical Insurance for PSB Employees Stagnant Amid a Decade of Rising Healthcare Costs?
Public Sector Bank employees continue to face outdated medical insurance limits unchanged since 2015, despite rising medical inflation and soaring hospitalization costs.
Author: Kalyani Mali
Published: June 4, 2025
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In India, the cost of critical healthcare has risen dramatically—cancer treatments, heart transplants, and other life-threatening conditions have seen annual increases of up to 14% in cost over the past decade. Yet, for Public Sector Bank (PSB) employees, the medical insurance coverage set in the 10th Bipartite Settlement in 2015 has not changed. Clerks are covered for ₹3 lakh and officers for ₹4 lakh—limits that are grossly inadequate in today's medical landscape.
Rising Medical Inflation: A Decade of Data
According to the data mentioned below, critical surgeries like cancer treatment cost ₹13.5 lakh in 2013. By 2024, that figure has nearly quadrupled to ₹50.8 lakh. Similarly, costs for heart and kidney transplants have also more than tripled over the decade. ACKO Insurance reports a 12.8% jump in hospitalization expenses in FY24 alone.
Image: Year-on-year cost rise for critical healthcare procedures like cancer, liver cirrhosis, and transplants
Source: @saransh_motiani
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Still ₹3–4 Lakh in 2025?
The ₹3 lakh and ₹4 lakh coverage for clerks and officers was set in 2015 and has not been revised even once. Even the Pradhan Mantri Jan Arogya Yojana (PMJAY) now covers up to ₹5 lakh for economically weaker sections—more than a bank clerk receives.
Tweet Highlights Ground Reality
Banking commentator Newton Bank Kumar pointed out on X (formerly Twitter) that the current medical insurance cap—₹3 lakh for clerks and ₹4 lakh for officers—has not changed since 2015. He noted that with a 14% annual medical inflation rate, these limits should now be around ₹11 lakh and ₹15 lakh respectively.
Image: Tweet highlights unchanged medical insurance limits for bank employees.
Concern Over Insurance Limits
Recent discussions on social media reflect growing concern among bank employees and observers about the unchanged medical insurance limits.
Image: Reactions on Twitter
IT Sector Outpaces Banking in Health Benefits
According to a source familiar with employee benefit structures in the IT industry,, medical insurance coverage in many IT firms now ranges between ₹5 lakh to ₹12 lakh, reflecting the rising cost of healthcare and employee well-being. Meanwhile, PSB employees continue to wait for an upward revision in their outdated coverage limits.
Bank Staff Plea for Better Medical Coverage
A bank employee recently wrote to the union leadership urging them to prioritize enhancement of the group medical insurance limit and consider reinstating the previous reimbursement system. The letter highlights rising healthcare costs and inadequacies in the current coverage. As of now, there has been no response from the union.
Image: Letter from a bank employee addressed to the union, dated 21 May 2025, requesting stronger healthcare support.
Source: @idesibanda
AIBEA’s Medical Insurance Renewal Demands to IBA
The All India Bank Employees’ Association (AIBEA) has submitted fresh demands to the Indian Banks’ Association (IBA), urging a revision in medical insurance limits to match current healthcare costs.
Read More: AIBEA Details Key Demands to IBA on Medical Insurance Renewal
“Medical Inflation Soaring, Yet Insurance Limits Remain Frozen: An Insider’s Perspective”
An anonymous banker pointed out that medical inflation has risen by 14% annually over the last decade, with hospitalization costs increasing 12.8% in 2023–24. Yet, bank employees’ insurance limits have remained unchanged at ₹3–4 lakh since 2015. Further, he added,“Many employees are now forced to buy costly medical top-ups because banks don’t provide adequate basic coverage.”
Healthcare inflation has steadily increased, impacting many individuals. PSB employees currently have medical insurance limits that do not fully reflect today’s healthcare costs. A revision of these limits is needed to better align coverage with the rising expenses, especially given the increasing incidence of critical illnesses.
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