For the Indian healthcare system, public healthcare expenditure is abysmally low, forcing nearly two-thirds of the country’s population to seek treatment in a privatised setting, which frequently results in high out-of-pocket (OOP) expenditure. According to estimates, 30% of India’s population, or 40 crore people, lack health insurance. Low financial protection frequently leads to catastrophic spending and impoverishment in families.
Despite the government’s launch of the Ayushman Bharat Yojna, which aims to provide insurance coverage to nearly 70 million people in the country, a sizable portion of the population (nearly 30 million) remains uninsured. Coverage gaps in the government-launched scheme, overlap between different schemes, and a lack of affordable insurance schemes in the market are the factors that contribute to such a high proportion of uninsured people in the country. Unless these concerns are addressed, India’s health insurance penetration will remain low, making the healthcare system even more unsustainable.
Healthcare Financing in India
Various state governments in India, as well as the central government, have developed various health insurance schemes to alleviate the burden of high out-of-pocket expenses. In terms of the number of people covered, private insurance in the country has also changed dramatically over the last decade. In 2018-2019, for example, nearly 24 percent of people with health insurance coverage were covered by private health insurance. Similarly, health insurance has gained traction in India, with gross direct premiums increasing 17.16% year on year, reaching Rs 516.38 billion in FY20.
How to Increase Uptake of Health Insurance in India
There are certain steps which can be taken to increase the adoption of health insurance in the country. Dr Narang shares ways to increase the uptake of health insurance.
1. Better Knowledge of Schemes and Awareness
Knowledge of insurance schemes can increase health insurance utilisation and uptake. People are more likely to choose insurance schemes when they are familiar with them, whether through close friends and family or through advertisements. People can be made more aware of health insurance schemes through the use of the media. Aside from that, hospitals, healthcare facilities, ASHA workers, and Anganwadi centres can be used to boost consumer trust in the schemes.
2. Consumers Need Empathy
Consumer preferences have gradually changed since the outbreak of the COVID-19 pandemic, and people are preparing for future shocks. As a result, insurers must ensure that they understand every impact, from financial to mental to physical. Furthermore, it is critical for health insurance providers to connect with consumers with warmth and empathy, truly acknowledging the pandemic’s aftereffects.
3. Offer Products based on Consumer Needs and Preferences
The pandemic has undoubtedly focused attention on financial well-being solutions and new health safeguards. This is an excellent time to capitalise on the opportunity by providing health insurance based on customer needs and preferences. The goal should be to provide useful advice and scalable solutions that will pave the way for future relationships.
4. A Lending Hand from the Government
To improve distributional and operational efficiencies among private healthcare insurers, the government can provide its data and infrastructure as public goods. The government can also offer the PMJAY’s platform and network, particularly its information and technology capabilities, to increase health insurance coverage. This will make scaling easier and faster, as well as reduce operational costs, particularly in underserved markets. After obtaining customer consent, the government can also share its own databases, such as the NFSA, PM-KISAN, and others, with private insurance companies. This can help potential customers learn about health insurance.
Over the next few years, the government has pledged to increase public health spending in India to 3% of GDP, up from less than 1%. Increased public spending can thus be used to establish a universal medical insurance scheme in the country, which can help to reduce the burden of out-of-pocket health-care expenses.
