As per market experts, exclusions and complexity of a certain health insurance product play an important role in difficulty in adoption of new products.
In case you wish to get a sense of the gap between the world’s unhealthiest and healthiest people, you don’t need to fly to a faraway land. Just look around India! Health inequality has become an unwanted yet integral part of Indian society, so deeply entangled with other social problems like disparities in income, education and geography. In India, there are huge inequalities in healthcare that often go overlooked.
A crucial reason for inequality in the healthcare sector is that while on the one hand, there are swanky, five-star hospitals that boost world-class amenities and services, on the other hand, there are hospitals that lack even the minimum healthcare standards. The only solution to remove this disparity is mandatory health insurance. However, there is a flip side to the story. While thousands of people are striving to maintain best of their health and are at the same time exploring health insurance options to cover their health risks, they still find the current health insurance policies quite confusing and slightly expensive. Over and above, a great section of people does not even trust the current healthcare ecosystem as they are not satisfied by the services offered by a few insurers, hospitals and even diagnostic centres.
Many experts from the insurance industry also have the similar opinion that the existing health insurance policies are quite complicated and they need a proper simplification. This is generally because while buying a health insurance policy, typically you are first explained about what all is not covered (exclusions) in the policy rather than things which are covered. This makes it very difficult to buy a health insurance in comparison to buying a term, home or car insurance. This is an important reason why many people prefer staying covered under their employer provided health insurance cover rather than buying an individual health insurance policy. As per a recent report published by the Insurance Regulatory and Development Authority of India (IRDAI), in the financial year 2017-18, General Insurance companies issued approximately 1.47 crore health insurance policies that covered over 48 crore individuals. The insurers registered a growth of 10% in the number of lives covered.
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Though, there is a major difference in the number of people insured under an individual health insurance policy and in the number of people insured under a group cover. As per the report findings, 75% of the total individuals insured are covered under a government scheme while 19% are covered under group health insurance, usually offered by the employer. However, the total number of lives insured under an individual health insurance policy is significantly low i.e. only around 6%, a fall of 7% from 13% in the financial year 2013-14.
In the last few years, there has been a substantial increase in the number of people suffering from lifestyle diseases. The number of individuals suffering from ailments like high cholesterol, blood pressure, diabetes and hyper tension has gone up to a great extent. Also, the age of individuals suffering from any such ailment is below 45 years, which is a matter of great concern. Another important ailment affecting young individuals is acidity-related concerns which shows an increase of 35% in the last 5 years.
As per market experts, exclusions and complexity of a certain health insurance product play an important role in difficulty in adoption of new products. Apart from exclusions and complexity, claims also play an important role in helping people decide which insurer to choose. It is often observed that many health insurers suffer from a lot of bad reputation just because of their claim settlement process and ratio. Most consumers believe that the common reasons why they do not buy a health insurance policy is lack of trust, cost and complexity.
If any of the insurers work on these 3 areas, consumers will start showing more faith in the insurance companies. The only way to win the trust of consumers is introducing a standard health insurance policy across all insurers that is affordable and within everyone’s reach. While a standardised product will make it easier for the consumers to understand and compare health insurance, eventually it may also make porting health insurance policies convenient and easier amongst different insurers.
(By Amit Chhabra, Head-Health Insurance, Policybazaar.com)