Your Piggy Bank for Healthcare
‘Laughter is the best medicine, but your insurance only covers chuckles, snickers and giggles’.
Health insurance is the most innovative financing tool to achieve universal healthcare coverage. Based on ownership, the existing Indian health insurance system is a mix of mandatory social health insurance (SHI) (for the organized sector), voluntary private health insurance (wherein people can enroll and purchase the insurance product of their liking) and voluntary, not-for-profit community-based health insurance (CBHI) or Micro-insurance (usually targeting the unorganized sector).
The penetration of health insurance in India has been very low. According to an NCMH estimate, only about 3% to 5% of Indians are covered under any form of health insurance. In terms of the market share, the size of the commercial insurance is barely 1% of the total health spending in the country.
Health insurance continues to be neglected in India. The IRDA itself contains no reference whatsoever to the health sector or to health insurance. As a result, there is a risk of moral hazard when the fact of being insured changes the behavior of the patient or the healthcare provider. On the supply side, the provider tends to charge higher bills for an insured patient while on the demand side, the patient tends to demand more care because of the insurance status.
Further, no single government source provides authentic and complete information on size and geographical distribution of all the healthcare providers in India. As a result, most of the insurance companies have no data, the expertise and the power to regulate the healthcare providers. Similarly, due to insufficient data on consumers and disease patterns the insurance agencies fail to map their clientage, tend to overestimate the risk and end up fixing high premiums.
Given a largely uninsured population, the health insurance in India has a long way to go. The challenge is to see whether it benefits the poor. Rashtriya Swasthya Bima Yojana (RSBY) is a commendable step in this direction where insurers, healthcare providers, government and the intermediaries such as NGOs, SHGs and MFIs have come together to provide health and financial protection to BPL households. Devising innovative insurance products and price options, creating awareness among the beneficiaries about the benefits of a particular product and finally bringing in effective regulation and compliance in healthcare will lead to a healthy and vibrant India.
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Tags: CBHI, community based health insurance, health insurance, innovative price options, IRDA, mediclaim, MHI, micro-insurance, private health insurance, RSBY, SHI, social health insurance