Health insurance premium collected grew 25% during peak COVID year in India
The Health insurance section which began in 1985 got boosted in 2001 with the outlet of the world to non-public players. From a modest Rs 690 crore of premiums in 2001, this sector grew to Rs 73,300 crore in 2021-2022, a boom of round 106 times.
Health is wealth but the fear of illness has proved to be sturdy remedy for the medical health insurance industry. The total health insurance premium collected in India grew by 25% in only a year, probably because of the massive rush by the people to protect themselves and their family from catastrophic out-of-pocket medical expenses caused due the COVID-19 pandemic and boom withinside the premiums.
A paper named Health Insurance in 2042: Challenges and Opportunities prepared by the the National Insurance Academy beneath the Union finance ministry has revealed that Rs 58,572 crore was collected in 2020-21 as Health insurance premium by the health insurance companies, this figur jumped to Rs 73,330 crore in the next financial year.
The first quarter of the financial year 2021 marked by the devastating 2nd wave of the COVID-19 pandemic which noticed the most quantity of hospitalisations and deaths throughout the country.
The paper launched at a PHD Chamber of Commerce and Industry (PHDCCI) occasion on Tuesday, May 10, stated the health insurance marketplace in India have been growing progressively at around a compound annual increase of 24% however grew at almost 34% in the pandemic period.
The record underlined, like a Niti Aayog report of last year October, that 70% of the populace is both protected with the aid of using or eligible for a medical health insurance plan (both government or priate coverage), almost 30% of the population remains out of this bracket.
The report additionally stated that this group, in large part working in the unorganised sector, and their families may not be in a position to buy expensive private health insurance plans.
Incidentally, the National Health Authority—which operates the government’s flagship Ayushman Bharat- Pradhan Mantri Jan Aarogya Yojana (PMJAY) that gives Rs 5 lakh hospitalisation insurance coverage to almost 40% of the poorest—has proposed to increase its scheme for this “lacking middle”.
These beneficiaries, at a completely low premium paid with the aid of using them, can be capable of avail the gain provided with the aid of using the PMJAY.
Largest cost on healthcare borne by individuals
The paper additionally highlighted that the government’s expenditure on public healthcare has extended from Rs 2.73 lakh crore in 2019-20 (pre-COVID-19) to Rs 4.72 lakh crore in 2021-22, an growth of almost 73%, its spending consisting of the states constitutes simply round 25% of the whole healthcare value withinside the country.
Insurance, on the alternative hand, contributes best round 12%, however the closing 63% of the total cost incurred by the people by the way of out-of-pocket expenses.
Need to increase the OPD benefits
The paper also stated that the outpatient department (OPD) benefits beneathneath the health insurance are capped at Rs 5,000, which had to be more suitable to an affordable quantity factoring withinside the utilisation price of the household’s common OPD rate rate, clinical inflation and growing healthcare price.
“Such merchandise could be in excessive call for with the aid of using each middle- in addition to lower-earnings households. Hence, the top class could be greater or much less same to the entire claims price or sum insured for OPD care. It won’t be cheap for low-earnings client segments which successfully makes it perfect for a pay as you go subscription version with the authorities subsidy,” it stated.
The paper additionally stated that the benefit of offering OPD advantages along in-affected person care could boom the performance and price of the healthcare supplied via bundling of fragmented and simplified offerings (medical doctor fee, price of diagnostics, medication and drug price) and assist in enhancing the fitness of the whole society at an cheap price and with well timed care to a big quantity of low- and middle-earnings customers.
Many changes are required
PHDCCI president Pradeep Multani, even as noting the health insurance sector is anticipated to develop at 10.1 percentage among 2021 and 2027, additionally burdened the want to broaden customised merchandise as one product won’t be appropriate to attend to the wishes of all of the human beings concerned.
Dr Sameer Gupta, co-chair, hospital & diagnostics committee, PHDCCI, burdened how essential it’s miles for the insurance providers to be open to change.
“Lots of primary healthcare services are going to be digital down the road as COVID has expanded this even faster,” he stated. “It is consequently very essential for the insurance providers to recognize and adapt to the change.”