Health insurance in India



Medical expenses are sky high these days, but they were never ever. Even a minor treatment or an appointment with the doctor might cost a lot of money. Health insurance is insurance that pays for medical expenses. It is sometimes used more broadly to include insurance covering disability or long-term nursing or custodial care needs.

Health insurance is a must; it saves money and covers unexpected calamities. Health insurance comes in handy to meet emergencies of severe ailment or accident. Life is unpredictable, insurance can make it safe and secure from sudden and huge liabilities. Health insurance is affordable and carries the assurance and freedom from insecurities that threaten life every now and then. It may be provided through a government-sponsored social insurance program, or from private insurance companies. It may be purchased on a group basis by a firm to cover its employees or purchased by individual consumers.

While health insurance policies in India are mostly provided by general insurance companies, life insurers contribute about five per cent to the overall health insurance business. Health insurance market in India was at around Rs 7,000 crore in 2008-09 and is expected to grow to Rs. 41,586 crore by 2016-17. Health insurance penetration in India is very low, as over 90 per cent of the total Indian population has no health insurance cover.

In a move to control health cover costs, insurance companies are bargaining hard with hospitals for a standard rate card. Market leader in India, New India Assurance has told corporate customers that cashless reimbursement will be only to the extent of the negotiated price and if any policyholder goes to a hospital, which charges more, the difference will have to be borne by the policyholder. The rate card circulated provides a matrix of standard charges for secondary and tertiary providers in the premium and non-premium categories across various procedures. The tariff rates vary for metros where provision is made for higher costs.

The Insurance Regulatory Development Authority (IRDA) has embarked upon a nationwide awareness programme on health insurance in order to educate the public on its benefits, according to a top IRDA official in India. Since there was not enough response for its health insurance schemes from consumers, IRDA would conduct a nationwide awareness programme.This was mainly to educate the public on health insurance policies offered by insurance companies and the campaign would be launched shortly.

Though health insurance has been evolving at a fast pace in the country, it has not reached expected levels. With the number of people voluntarily taking health insurance at 4-5 per cent, there is a big challenge relating to the penetration of health insurance in India. Lack of awareness, affordability issues and enrollment are barriers; the formalities required are particularly the main reasons for this low penetration.

On the insurance companies' side, the challenge is to pay huge claims while the premium is comparatively low, as also to address the need for issuing policy documents in local languages. The health insurance business is seen as extremely capital-intensive. Health insurance is the fastest-growing segment in the country with annual premium collections of over Rs 6,000 crore. But despite the high growth, the business is a huge challenge for insurers because of the high losses over soaring medical expenses.

The increasing cost of health insurance coverage combined with the rising cost of modern dentistry is why more and more consumers are opting for Reduced Fee for Service or Discount Health Plans. To millions of people, they are an ideal form of health insurance coverage when insurance benefits are not available through their employer. While some plans are increasing the annual maximum coverage amounts, many plans have not increased their maximum coverage amounts in years.
WellPoint health insurance Company, which has encouraged its employees to lobby against health care reform, is now cutting their benefits. The insurance giant plans to raise deductibles and premiums for some of its employee health benefit schemes. Companies are blaming the recession for the cuts.

Although the general principle of insurance is population solidarity, the economic behaviour of insurance companies that are run for profit often seems to go against this very principle. Relative to the life business, non-life insurance is relatively less capital intensive. For the purpose of regulation, health insurance companies are classified as non-life companies.



According to health insurance expert, educating customers on health insurance "has a long way to go" and awareness on insurance should be introduced at school and college levels. Audience should to ask questions to insurance agents before filling up policies. They should take adequate precaution when buying health plans.