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Equitable Penetration of Health Insurance: Need of Today

  • India and Her Poor Health Care Services for the Masses

    The health scenario in India, in a nutshell, is low budgetary allotment in healthcare coupled with a high incidence of infectious and degenerative diseases hitting the mass. With more than 75% of the country’s population still out of the purview of health insurance coverage, the financial pressure on the common man on account of spending on health care is huge.


    Causes of Poor Health Condition of the Masses

    The economic backwardness of a major chunk of the country’s population leads to their lack of access to medical aid and sanitary living. India is still suffering from:

    • Lack of safe drinking water
    • Lack of environmental sanitation
    • Under-nourished and poverty struck living condition leading to low access to health and hygienic care
    • Lack of knowledge and awareness
    • Gender inequality
    • Rapid population growth

    All these factors and the government’s poor infrastructure and goodwill in implementing health and sanitation programmers have led to the deplorable health condition of the masses.


    India Suffering From Poor Government Involvement in Healthcare

    The percentage of GDP that the government of India spends on healthcare and sanitation is about 4.2%, and ironically, it is less than that in Nigeria, where it is 6% (source: data from the World Bank). The government lacks machinery for proper implementation of the meager health schemes that it runs. The out – of – pocket expenditure on medical treatment is quite high even for the poorer section. Added to this is the high rate of inflation in medical costs. Thus, there is an incredible monetary pressure on the teeming millions in the country.


    Lack of Proper Health Insurance Policies

    There is a distinct lacking in the sphere of medical insurance – the penetration is negligible. It is a sorry fact that the Life Insurance of India has a penetration level of 3.10% of the GDP in 2014, the penetration level of General Insurance including medical insurance is a mere 0.78% (Source: Annual Report IRDA 2013 – 2014).


    Another significant trend in India’s health insurance scenario is the skewness in insurance penetration in the different states of India. It is interesting to note that the only four states that have some significant involvement in medical insurance are Delhi, Maharashtra, Karnataka and Tamil Nadu, and thus have a 62% share of the country’s total health insurance premium collected. The other states contribute the rest and the worst picture in the states of the North East, where the contribution is 0.6% of the GDP.


    India – Large Market for Health Insurance Penetration

    The above picture clearly shows that India presents a tremendous potential for medical insurance, which will strengthen the healthcare system of the country on the one hand and also save a lot of money from draining away in health care by the general public. However, a full-fledged implementation of an improved and integrated healthcare system in the whole country, especially among the rural and downtrodden sectors, is a big challenge and can be fulfilled only with the active participation of both the government and the medical insurance companies.


    Role of Health Insurance Services in Betterment of Healthcare in India

    To penetrate the huge potential market the health insurance industry needs to realize that business will grow only if the insurance is made accessible to and affordable by all. When the overall health of the country becomes dependable on the health insurance coverage, then it becomes a great responsibility of the insurance industry to come out of its businessman image and play the philanthropic parts in some cases as well. And what the government needs to do is allow full tax exemption on medical premium paid, so as to encourage people into buying health insurance for themselves and family members.


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