Role of Health Insurance

Role of Health Insurance

Introduction

·       Health insurance is a financial mechanism that provides protection against the cost of medical care by covering healthcare expenses, either partially or fully, in exchange for regular premium payments.

·       It acts as a social security tool, reducing the burden of catastrophic health expenditure, which is a major cause of poverty in India.

·       Health insurance also ensures equitable access to healthcare services by pooling risk among a large population.

·       In India, the demand for health insurance has been growing due to factors such as rising healthcare costs, increasing burden of non-communicable diseases (NCDs), low penetration of public health infrastructure, and greater awareness of financial security.

·       Government initiatives and private insurance players have contributed to expanding coverage, though challenges of affordability, accessibility, and inclusivity remain.

State of Public Health in India

• Health Indicators:
• India has made progress in life expectancy (70+ years) and reduction in infant mortality rate.
• However, disease burden remains high due to a dual challenge of communicable diseases (tuberculosis, malaria, dengue) and non-communicable diseases (diabetes, CVD, cancer).
• Public Health Expenditure:
• India spends around 2% of its GDP on health, which is among the lowest globally for emerging economies.
• Out-of-pocket expenditure (OOPE) still accounts for 48–50% of total health spending, leading to financial hardship.
• Healthcare Infrastructure:
• Shortage of hospital beds, doctors, and trained staff in rural areas.
• Unequal distribution of quality healthcare, concentrated mostly in urban and private sectors.
• Need for Insurance:
• Rising healthcare costs push nearly 63 million Indians into poverty every year due to medical expenses.
• Health insurance can act as a financial risk protection tool and reduce dependence on out-of-pocket payments.

Health Insurance Policy in India

• Introduced in 1986 with the launch of Mediclaim Policy by General Insurance Corporation (GIC).
• Post-liberalization (1999), private insurers were allowed in health insurance sector.
• The Insurance Regulatory and Development Authority of India (IRDAI) regulates insurance companies and ensures consumer protection.
• The Government of India has launched several public health insurance schemes:
• Rashtriya Swasthya Bima Yojana (RSBY) – targeted at BPL families.
• Ayushman Bharat - Pradhan Mantri Jan Arogya Yojana (PM-JAY) – world’s largest government-funded health insurance scheme.
• State-level schemes: Aarogyasri (Telangana/Andhra Pradesh), Mukhya Mantri Amrutam Yojana (Gujarat), etc.

Types of Health Insurance Plans

1. Individual Health Insurance
• Covers hospitalization expenses of a single individual.
• Premium based on age, medical history, and coverage amount.
2. Family Floater Health Insurance
• Covers entire family under one sum insured.
• More economical than buying separate individual policies.
3. Group Health Insurance
• Provided by employers to employees.
• Covers pre-existing diseases and offers lower premiums due to group risk pooling.
4. Critical Illness Insurance
• Provides lump-sum benefit on diagnosis of life-threatening conditions like cancer, stroke, heart attack, kidney failure.
• Helps manage high treatment costs.
5. Top-up and Super Top-up Plans
• Offer additional coverage beyond a threshold (deductible amount).
• Cost-effective for enhancing existing coverage.
6. Senior Citizen Health Insurance
• Tailored for elderly (above 60 years).
• Includes coverage for age-related diseases, domiciliary care, and higher premiums.
7. Maternity and Newborn Cover
• Covers expenses related to childbirth, C-section, and neonatal care.
8. Government-Sponsored Schemes
• PM-JAY, CGHS (Central Government Health Scheme), ESI (Employee State Insurance), State Health Insurance programs.

Third-Party Administrator (TPA)

• TPAs are licensed by IRDAI to facilitate health insurance services.
• Functions:
• Issue health cards to insured persons.
• Provide 24/7 helpline for queries.
• Facilitate cashless hospitalization by coordinating with hospitals.
• Process and settle insurance claims.
• Maintain a database of policyholders and healthcare providers.
• Importance: TPAs reduce administrative burden on insurers and improve service delivery to customers.

Insurance Regulatory and Development Authority of India (IRDAI)

• Established in 1999 under the IRDA Act.
• Regulatory body for the insurance sector in India.
• Functions of IRDAI:
• Protect policyholder interests.
• Promote competition and ensure financial stability of insurers.
• Issue licenses to insurance companies and TPAs.
• Regulate premium rates, terms, and conditions of policies.
• Ensure solvency margins and proper claim settlement.
• Monitor insurance penetration and literacy.

List of Insurance Companies in India

Public Sector Insurance Companies

1. Life Insurance Corporation of India (LIC) – health riders
2. General Insurance Corporation of India (Reinsurer)
3. New India Assurance Company Limited
4. Oriental Insurance Company Limited
5. National Insurance Company Limited
6. United India Insurance Company Limited

Private Sector General/Health Insurance Companies

1. Star Health and Allied Insurance
2. ICICI Lombard General Insurance
3. HDFC ERGO Health Insurance (formerly Apollo Munich)
4. Max Bupa Health Insurance
5. Reliance General Insurance
6. Bajaj Allianz General Insurance
7. Tata AIG General Insurance
8. Aditya Birla Health Insurance
9. Future Generali India Insurance
10. ManipalCigna Health Insurance
11. SBI General Insurance
12. Care Health Insurance (Religare Health)
13. Kotak Mahindra General Insurance

Video Description

·        Don’t forget to do these things if you get benefitted from this article

·        Visit our Let’s contribute page https://keedainformation.blogspot.com/p/lets-contribute.html

·        Follow our page

·        Like & comment on our post

·