Cancer Insurance Crisis in India: Study Shows Early Detection Rising but Coverage Falling

India’s cancer patients are confronting an escalating health-insurance crisis, according to a new analysis by Plum Data Labs, which examined one lakh cancer-related insurance claims filed between 2023 and 2025. The study highlights a worrying paradox: early cancer detection is rising sharply, yet insurance protection is weakening, forcing households to shoulder high medical expenses over extended treatment cycles.

Early Detection Up, Financial Stress Rising

The share of stage-0 or “in-situ” cancers surged from 29% in early 2023 to nearly 47% by early 2025—an overall rise of 72%. However, earlier diagnosis has not translated into reduced financial burden. Instead, the duration and frequency of treatment have expanded, increasing the number of claims a patient must file.

On average, a cancer patient now makes nearly four claims annually, and one in five files more than five. For advanced cancers, families often file between 11 and 22 claims as treatment spans surgery, chemotherapy sessions, immunotherapy cycles, radiation, biopsies, PET scans and ongoing monitoring—each billed separately.

Treatment Costs Escalating Across All Categories

The study includes case journeys that reveal how quickly expenses accumulate:

• A 40-year-old head-and-neck cancer patient incurred ₹42.44 lakh in just over two months

• A 49-year-old leukemia patient required ₹40.56 lakh over three-and-a-half months

• A 76-year-old stomach cancer patient spent ₹33.84 lakh in six-and-a-half months

• A 66-year-old colorectal cancer patient underwent 17 visits over eight months, totalling ₹33.25 lakh

• Even early-stage carcinoma in situ resulted in expenses of ₹31.77 lakh over nearly four years

Cancer types with the highest average cost include colorectal cancer (₹5.07 lakh), brain cancer (₹4.9 lakh) and stomach cancer (₹4.53 lakh). Blood and lymph cancers remain hospitalisation-heavy, with nearly 70% of expenses coming from hospital stays.

Insurance Payouts Dropping, Out-of-Pocket Costs Surging

The study reveals a sharp fall in effective insurance coverage. Claim payouts dropped from 76% in 2023 to around 63% in 2025, while deduction rates rose from 24% to 38%.

One in eight patients exhausted their ₹5 lakh sum insured within a single year. Another dataset showed that 21.4% of patients surpassed the ₹5-lakh threshold entirely, shifting them into catastrophic out-of-pocket spending zones.

Across critical cancer types, personal expenditure remains high:

• Brain cancer: ₹2.62 lakh OOP

• Colorectal cancer: ₹1.66 lakh

• Blood and lymph cancers: ₹1.22 lakh

• Lung cancer: over ₹68,000

Even insured families often pay 20–40% of total treatment expenses.

Why Insurance Is Falling Short

Plum Data Labs identifies systemic gaps in Indian health insurance:

• Modern cancer drugs are often prescribed off-label, leading to partial or zero reimbursement.

• Many policies cap reimbursement at 50% for advanced treatments like oral chemotherapy.

• Room-rent caps, co-pay clauses and sub-limits dilute the value of the sum insured.

• Fragmented claims across multi-stage treatment multiply deductions.

Saurabh Arora, Co-Founder and CTO of Plum, said, “The decline in cancer payouts reflects a structural mismatch between how cancer is treated today and how insurance products were built years ago. Policies need realistic sum-insured levels, full coverage for modern therapies, and fewer exclusions.”

A System in Urgent Need of Reform

The report concludes that while India is improving at detecting cancer earlier and extending survival, its health-insurance architecture is stuck in an outdated model built for older, simpler treatments. Without modernisation, families will continue absorbing rising costs through repeated claims, frequent deductions, and heavy out-of-pocket spending.