Health care has been steadily rising at the rate of 18% annually, making health covers a necessity.
In 1980 a tonsillectomy - the removal of enlarged or infected tonsils used to cost Rs. 100, compared to today's rates where it can cost around Rs 10,000, though the recovery now, may be easier. Health insurance was not a common concept and the only known health insurance was the Central Health Scheme for government employees and The Employees State Insurance Scheme for blue collar workers. Hospitals were run by government bodies or large public limited companies where treatment was at a nominal cost.
Things have undergone a drastic change since then as in 1986 products launched under Mediclaim by government insurance companies had policies for a minimum sum of Rs.15000 and a maximum of Rs. 5.00.000. Now the minimum sum assured is Rs. 50,000 - 1 lakh and for private sectors the sum as a minimum is 3 lakh according to Yasish Dahiya the co-founder and chief executive officer of Policybazaar.com.
Today, a hysterectomy or a caesarean-section operation can cost anywhere between 50- 60 thousand, whereas in the 80's it used to cost 10 -15 thousand. There were no MRI's or cataract operations and angioplasty is also a new procedure. Dr Dilip Sarada - the president of Indian Medical Association, Maharashtra, says that, "As new technology was introduced, the cost for medical procedures also increased. The cost has increased multi-fold due to corporate hospitals. It is not feasible to run a small hospital of four to five beds, due to expenses for land, infrastructure and staff salaries."
A report by Divya Gandhi in which she says, that earlier consumers used to buy policies with Rs. 1 lakh as the sum assured and today they were willing to Rs, 1lakh as a premium for a sum assured of Rs. 1 crore.
Health insurance in the beginning was for people to reimburse hospitalization treatment. Towards the late 80's a group policy known Mediclaim was introduced and it is a term synonymous to health policies even today. By the 90's healthcare started to evolve and private hospitals mushroomed as life expectancy increased.
In 2001, the Insurance Regulatory and Development Authority -IRDA introduced regulations for Third Party Administrators - TPA's.
According to a data report in 2010 -11, there were 22, 65,451 policies in 2003 -2004 which increased to 77, 42,076 by 2010 - 2011, where the average premium for 4 members insured, by 2011-2012 the premium had increased to Rs.14, 120 for 6 members.
In 2006, the first standalone company was set up, Star Health Insurance. There are now five such companies. They are Max Bupa Health Insurance, Religare Health Insurance, Apollo Munich, Cygna TTK and Star Health.
Central government launched the Rastriya Swasthya Bima Yojna for those below the poverty line in 2008, states like Andhra Pradesh, Tamil Nadu and Maharashtra also followed by starting state sponsored insurance schemes.
2009-2010 is when companies started covers for maternity and wellness treatments. Covers for critical illness, day care procedures and pre-existing conditions were introduced.
An important step by IRDA was the definition of pre-existing illness which made coverage of these after a maximum of four years a standard procedure. Allowing of portability of policies, the option to transfer to another company without any disruption in the waiting period was another important feature, introduced in 2011.
Although corporate health care does offer people better access to medical treatment, it is still debatable of whether this will increase costs. Will the evolution of health insurance actually improve the average Indians access to healthcare?
Priya Nair, Oct 2014
Hannah Punitha (IRDA Licence Number: 2710062)