With
escalating costs, healthcare has become a high priced commodity. In the
changing economic scenario, health insurance is no longer a luxury, but indeed a
necessity. More and more households are opting
for health insurance cover to tide over the unexpected hospitalization expenses.
Nowadays, it is a common practice for employers to provide group health
insurance coverage to their employees.
Indian Healthcare Industry contributes significantly
to the country’s gross domestic product (GDP). In recent years, the concept of
health insurance is receiving increasing prominence in India. According to current research, health
insurance market constitutes the second largest non-life insurance sector in
India and has registered phenomenal growth in 2008-09 and 2009-10. Health
insurance industry is one the fastest growing businesses and the premium mark
is expected to cross a compound annual growth rate (CAGR) of 25% by 2013-14.
Health Insurance
Health
insurance is a product that protects the insured person against the risk of
incurring medical expenses and provides with specified sums to cover the treatment
costs. In India, most health insurance policies cover only hospitalization
expenditure.
Need for Health Insurance Cover
Most of the Indians receive healthcare
through state owned primary care centers, as well as secondary and tertiary
hospitals. Nevertheless, only 6% of GDP
is spent on healthcare. Poor state of government-owned healthcare facilities
and the fewer number of hospitals per 1000 population as compared to global
average have led to the exponential growth of private secondary and tertiary
care hospitals, which constitutes nearly 80% of the country’s health
infrastructure. This, among others has contributed to the escalation of
healthcare costs. In addition, massive population growth is straining the already
over stretched health infrastructure. Socioeconomic changes such as ongoing
migration of people from rural to urban areas in search of livelihood,
sedentary life style, globalization and stress have contributed to the
increased incidence of life style diseases such as diabetes and hypertension. Given
this background, the need for health insurance is more prominent than ever,
considering that merely 10% of Indian population has health insurance coverage.
Advantages and Disadvantages of Health
Insurance Policy
Health insurance policy covers the risk
of unexpected expenditure resulting from medical treatment. Most insurance
providers offer cashless facility of claim settlement when the insured person
gets admitted in the hospitals belonging to their preferred provider network,
the details of which are made available while purchasing a health insurance
policy. There are various health insurance products in the market, offering
consumers with a wide range of choice to suit their specific requirement. Some insurance providers offer discount on the
premium amount for the succeeding year, if no claim has been made in the
previous year on the policy.
More
often than not, health insurance policies cover only hospitalization
expenditure, and the cost of outpatient treatment is not generally covered.
Moreover, most policies exclude the pre-existing diseases for varying periods
of time when the policy is in force, and this makes it wiser to purchase the
insurance cover at an early age. One of the exceptions is Star Health – Senior Citizen Red Carpet Policy, which
offers coverage of all pre-existing diseases from the first year of policy. In
addition, hospitals tend to charge health insurance policy holders at rates
higher than the reasonable treatment cost, requiring the insured person to
spend additional sums from his pocket.
Public and Community Health Insurance
Schemes
The Government of India has increased the
plan allocation for the healthcare expenditure from US$ 4.97 billion in 2010-11
to US$ 5.96 billion in 2011-12. Furthermore, the Ministry of Health &
Family Welfare has proposed to increase the domestic healthcare funding by at
least 2 per cent of the GDP in the 12th Plan period. Taking into cognizance the
need for greater population health risk coverage, the central and state governments
in India have launched innovative health insurance schemes to help the poor.
Rashtriya Swasthya Bima Yojana (RSBY) was introduced by the Government of India
for BPL (below poverty line) population in the unorganized sector in April
2007. Recently the government has approved extension of RSBY to cover
registered domestic workers, which is likely to cover 47.50 lakh workers. Some
of the popular insurance schemes run by the state governments include
Aarogyashri in Andra Pradesh, Chief Minister’s Health Insurance Scheme in Tamil
Nadu and Yashaswini Insurance scheme in Karnataka.
In addition, several community-based health
insurance schemes are run successfully by NGOs across the country and a few of
them are listed below.
· Self Employed Women's Association, Ahmedabad, Gujarat (1992)· Goalpara, Shantiniketan, Rural West Bengal (1984)· Voluntary Health Services (VHS), Medical Aid Plan, Chennai, Tamil Nadu(1963)· Social Work and Research Centre (SWRC), Ajmer, Rajasthan ( 1972)· Sewagram Kasturba Hospital, Wardha, Maharashtra (1972)
Leading Health Insurance Providers in
India
Though successful, existing health insurance
schemes do not cover all sections of the society, thus leaving the field open
to private players. Currently we have public sector general insurance companies
and private insurance companies offering health insurance products. Of these
Star Health Insurance is the only stand alone health insurance company. Leading
health insurance providers in India include,
Popular Health Insurance Products
Some of the most innovative and popular health
insurance products are,
· National Insurance – Varishta Mediclaim· New India Assurance – Mediclaim policy· United India – Family Medicare· Oriental – Individual Mediclaim Policy· Max Bupa – Heart Beat Gold, Silver and Platinum· Bajaj Alliance – Health Guard
Future of health insurance in India
Indian health insurance industry is on
the verge of an exponential growth. Key factors driving this industry include
escalating healthcare costs with resultant need to purchase private health
cover to supplement public schemes;
sub-optimal quality of public health services; booming population growth; increasing
incidence of lifestyle related diseases; greater awareness and affordability
among the educated middle class; and
deficiencies in pension schemes.
In conclusion, from the consumer stand
point, it would be only prudent to purchase health insurance cover for the
individual as well as the family — earlier the better!
2-Aug-2011: "Health Insurance - A Perspective" was published on Healthcare Excellence
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