Health Insurance In India - An Overview

Private health care accounts for 74% of the health care expenses. Due to this people consider health insurance as a saving protection tool. In India, the health risk is a significant priority, and is comparatively lower to the western population. Since 2011, due to constant increase in wages and convenient access to health care, health issues have become important to the public.

The Current Situation of Health Insurance in India

The 2015-16 report states that 30% of the 1.324 billion population has registered themselves for health insurance comparing it to the previous years. This indicates a growth potential for health insurance market in India.

There are over 54 health insurance products in the category offered by health insurers. While ICICI Lombard, Bajaj Allianz, HDFC and Reliance General are some of the prominent general insurers in the health insurance space while Apollo DKV, Star Health & Allied Insurance are the standalone players.

The insurance industry has become tech-savvy with facilities to buy various types of insurance products online. Regarding technology, Insurance companies are using What’sApp, Facebook and Twitter to promote their health insurance policies and products. Payment of premiums is through mobile e-payments schemes using the internet. The insurance penetration level in India is at 3.7% which is very low compared with the global average.

The Need For Health Insurance

Health treatment is costly due to advances made in health care with increase in diagnostic procedures and increasing cost of care in the corporate hospitals. In India, over 70 percent of spending on health is out of pocket and this leads to a lot of hardship for the common man.

The rising cost of hospital care makes more and more people opt for health insurance coverage and makes it attractive for an employer to offer this as a package when offering employment. It has been noticed that almost 50% of the in-patients spend in hospitals is due to lifestyle diseases.

The incidence of lifestyle diseases such as obesity, diabetes mellitus, and cardiovascular diseases are constantly rising and puts a burden on health insurance companies as it leads to increasing sickness and hospitalization among those who opt for insurance.

What Coverage Does a Health Insurance Policy Provide?

Health insurance policy not only covers expenses incurred during hospitalization, but also during the pre/or post-hospitalization stages like money spent for conducting medical tests and buying medication. The health insurance coverage will be to the extent of the sum insured.

Type of Health Insurance Products

In India, there are different types of health insurance policies available according to an individual’s preference.

• The government health insurance schemes such as employer state insurance scheme (ESIS), universal health insurance scheme (UHIS) and central government health insurance scheme (CGHS).
• State Government health insurance schemes like Rajiv Arogyasri Scheme in Andhra Pradesh Deen Dayal Swasthya Seva Yojanain in Goa, Aaroghya Bhagya in Karnataka and Chief Minister’s Comprehensive Health Insurance Scheme(CMCHIS) in Tamil Nadu are also available for each state members. These schemes were implemented differently in different states and according to each individual’s needs to address the health issues.
• Voluntary health insurance scheme like Mediclaim policy is to manage and reimburse medical expenses for unexpected medical emergencies. Raja Rajeswari Mahila Kalyan Yopjana is for personal accidental and group health insurance policy for corporate/government employees by the central government and to meet unexpected emergency needs.
• Community-based health insurances are also provided by NGOs such as ACCORD, SEWA, TF, and VHS.
• Employment-based schemes for both government and private sector employees are by their employer. It also covers both in-patient and out-patient expenditures under a group health insurance scheme

Health Insurance Premium Collections

Health insurance is emerging as a significant line of business for many insurance companies. A premium of Rs. 3,66,943.43 crore was collected in 2015-16 compared to its previous year with a growth rate of 11.84%. by the Life insurance. A premium of Rs.96,379 crore was collected in 2015-16 against Rs.84,686 crore in 2014-15 by the non-life insurance.

Indian market is expected to rank among top three markets globally in the insurance sector by 2020. In 2016-2017, there was a 32% increase in Non-life health insurance and health insurance was the biggest contributor to motor insurance as it contributed nearly 40 percent of its total premium.

New Government Initiatives

The central and state government are pushing the growth of health insurance by taking up large-scale insurance programs, besides the high awareness among the public. The central government has revised and introduced a new health insurance policy known as National Health Policy (NHP ) 2017.

The government aims to promote quality of health care through this system. This policy is also targeted to promote good health and well-being. The main attraction of the policy is that it also supports secondary and tertiary care such as free drugs, free diagnosis, and emergency services in public hospitals. With public health goals, the government also aims to reassure people's trust in public health system.