The head of India's insurance regulator said on Tuesday that the country's health insurers need to expand beyond the small market of in-patient procedures that they presently cover. Few Indians have health insurance coverage, especially if they're not employed in a government job or a large private firm.
"The health insurance industry should widen up," said J. Hari Narayan, head of India's Insurance Regulatory and Development Authority. "Health insurance is today limited to just 20 per cent of the market comprising in-patient procedures. This is not a large market."
Presently, few Indians have health insurance coverage, especially if they're not employed in a government job or a large private firm. Those who do have health insurance often find it is very restrictive - covering procedures that require an overnight stay in a hospital but little outpatient or preventive care.
Pablo Gottret, a World Bank economist who focuses on South Asia said that a hurdle to expanding health insurance was that private insurance companies and health providers were likely to be looking at "profit maximization" - by agreeing to cover only big-ticket procedures, both hospitals and insurers can reduce doctor's visits and administrative costs - while the government was thinking about "universal access." Health officials, insurance regulators and private players needed to figure out how to align their goals, he said.
About 15% of India's 1.2 billion people have health insurance, according to a report put out by the Federation of Indian Chambers of Commerce and Industry.
India needs to "increase the health insurance penetration to at least 50% of population by the year 2020 and 80% by the year 2030," said Nandakumar Jairam, chairman FICCI's advisory board on health insurance.
Mr. Narayan, the insurance regulator, also noted that public expenditure on health in India was much lower than comparable economies and that it should be increased. "Although the total expenditure on health in India is nearly 6% of the entire Gross Domestic Product, the government spending is less than 25% [of total health spending] against the average spending of 30-40% in other developing countries," said Mr. Narayan.
According to official statistics, nearly 1% of India's poor fall below the official poverty line each year due to a health crisis.