Expert speaks details

Health Insurance in India – The need of the hour  6th Dec 2018


Mohan Pandey, his wife and two children were happy, healthy and active. He had no reason to believe any of them would need medical treatment any time soon, and even if they did, he was confident his employer’s Rs 3 lakh floater policy will be enough.

Unfortunately, fate had other plans. One day at work, 36-year-old Mohan began experiencing shortness of breath, nausea and chest pains. An ambulance rushed him to the hospital, where doctors diagnosed him with a severe heart blockage that would require bypass surgery. The total cost: a whopping Rs 8 lakh, including hospitalization, surgery, medication and post-operative care.

It turns out their employer-sponsored health insurance just wasn’t enough for this emergency.

Mohan isn’t alone in being totally unprepared. Many Indians have seen their standard of living gradually rise over the last two decades, but this hasn’t translated to more Indians being covered under some sort of health insurance plan - less than 20 percent of urban and rural Indians have health insurance coverage.

When you consider that this newfound prosperity has been accompanied by greater life expectancy and so-called lifestyle diseases such as diabetes, cardiac ailments and certain types of cancer, the lack of insurance coverage among Indians is worrisome.

Healthcare Costs Are Skyrocketing?

According to World Bank data, per capita health expenditure in India was $75 (Rs 4,793) in 2014. But the actual cost of treating life-threatening diseases, chronic illnesses and emergencies is much higher.

Procedures such as heart bypass surgery can cost more than $5,000 (Rs 3.2 lakh) in urban India. What’s more, healthcare inflation has hit double digits, and the trend looks unlikely to reverse.

These figures will only escalate with time, but so far, the number of Indians who have protected themselves against health-related financial difficulties hasn’t kept pace to the healthcare needs.

Few Indians Are Prioritizing Health Insurance

Only 18 percent of urban Indians and 14.1 percent of those in rural areas have any kind of health insurance coverage. Of that, many are overly reliant on corporate insurance plans, which come with their own set of conditions and, more importantly, have a low sum insured.

Group policies are usually in the single-digit lakhs, which isn’t much for a family of four. Even if you don’t have dependents, you should consider what would happen if you did. Your parents may not have any insurance at all. An independent policy can cover everyone under a family floater.

Data show that, of 50 countries classified as low- and middle-income, India has the sixth highest number of out of pocket spenders. The spillover effect is clear: more money pulled from household savings for healthcare means less to spend on food, education and long-term goals such as retirement.

Health insurance in India is a growing segment, yet it hasn’t taken off fully and several measures are needed to improve and expand insurance coverage, according to the National Health Profile 2018.Out of 4,37,457 persons covered under insurance, 79 per cent were covered by public insurance companies, with the remaining being covered by private insurance companies.