Low levels of insurance penetration remains a major challenge in Indian healthcare: Economic Survey 2019

Low levels of insurance penetration remains a major challenge in Indian healthcare: Economic Survey 2019

With a health insurance penetration of just 3-4 percent, and low government spending on health care, India has become one of the highest out-of-pocket spending rates in healthcare, according to the Economic Survey announced on July 4, 2019.

Though the governments Ayushman Bharat scheme has helped bring as many as 10 crore poor families under a basic medical security net, this would still leave a large number of Indians without any medical cover.

According to a study by the Public Health Foundation of India (PHFI), healthcare expenditure has pushed about 55 million Indians into poverty in a single year.

Even among the burgeoning middle class, for whom a health insurance policy is a good investment, very few of them understand the value of a good insurance plan that pays for preventive care, finds the survey.

The Economic Survey 2019 stresses the need for health insurance plans to be simplified to make it easier for individuals to buy them.

Most consumers want value for their money, and if they are paying premium for insurance coverage that they don’t actually use, they tend to drop it. They fail to understand this only increases their expenses down the line, says  Dr Dharminder Nagar, MD, Paras Healthcare.

The PHFI study has also found that non-communicable diseases accounted for the largest chunk of spending by households on health in India. The study unveiled that cancer had the highest probability of resulting in a “catastrophic expenditure”.

Lifestyle changes, increasing urbanization and life expectancy has led to an increase in the disease burden of non-communicable diseases like hypertension, diabetes, anxiety, depression and cardiovascular disorders.Incidence of various types of cancers has also gone up in recent years with environmental pollution, obesity, unhealthy lifestyles and rising life expectancy believed to be contributing to this surge. These chronic diseases put a major dent on patients’ health and finances and often require hospitalizations with hefty expenditure.

With non-communicable diseases expected to further rise, the need for medical insurance cannot be underlined more. There is a strong need to educate customers about the need for preventive care by adopting healthy lifestyles to reduce incidence of disease while buying health insurance to cover for any eventuality.

Although health insurance penetration has grown in recent years, its pace has been sluggish.

The rolling out of the Ayushman Bharat program has helped generate a lot of discussion and debate on the subject of health insurance which is a good sign, particularly in rural areas where penetration of health insurance has been specifically low.

However, there is an emergent need for creating more awareness through campaigns and messages that seek to explain the utility of health insurance and simplify it for the common man to fill the gap in awareness.

The awareness campaigns have to come both from the government as well as the industry. The insurance industry must work proactively to spread the right knowledge about insurance and help the common masses understand the nuances and benefits of buying health insurance.

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