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Author: Priya Muthu
Today, a strip of paracetamol costs Rs. 20/-, but the same was Rs.10/- five years back ; a x-ray would have costed Rs 70/- few years back but the same costs Rs150/- today. Hence, it would’nt be an astounding feat for anybody to guess the trend of spiralling health costs in the Indian health care system today.
India continues to grapple with newer challenges inspite of its significant gains in terms of health indicators like demograhphic, infrastructural and epidemiological. Communicable diseases have always persisted, with diseases like Malaria developing insecticide-resistant vectors and others like TB becoming increasingly drug resistant. AIDS has assumed extremely virulent proportions. Lifestyle changes have triggered increased mortality due to non-communicable diseases. Thus, with escalating health care costs coupled with demand for health care services and lack of easy access for people from the low income group to quality health care, health insurance is emerging as alternative mechanism for financing health care.
Current Health Care Scenario:
WHO defines health as complete physical, mental and social well being and not merely absence of diseases and injury. As per WHO, country’s HEALTH SYSTEMS comprise of all the organizations, institutions and resources that are devoted to produce health actions.
Health care has always been a difficult area for India, a nation with 1.064 billion population with a larger percentage of this population living in urban slums and rural areas below poverty line. India spends about 6.5% to 7% of its GDP on health care with an estimated health care market touching 100,000 crores per annum and is expected to grow by more than 15% per annum.
Origin of Health Insurance:
The history of health insurance in India traces back to 1923 when the ‘Workman’s Compensation Act’ was passed. The year 1948 saw the introduction of ESI Act. Since then, the health insurance market has been a wild frontier with rules constantly evolving.
Health Insurance:
Health insurance in a narrow sense would be an individual or a group purchasing health care coverage in advance by paying a fee called premium. The following are the different categories of existing schemes:
Voluntary Health Insurance Schemes or Private For Profit Schemes
Public sector companies like General Insurance Corporation, New India Assurance Company etc. provide these schemes. Mediclaim is once such scheme promoted by the GIC providing reimbursement of medical expenses.
In private insurance, buyers are willing to pay premium to an insurance company that pools people with similar risks and insures them for health expenses.
The year 1999, with the passing of Insurance Regulatory Development Authority Bill (IRDA), marked the beginning of a new era for Indian Health Insurance, with a couple of international players insvesting in the Indian health insurance market by teaming up with local companies.
Employer Based Schemes
Employers in both the public and private sectors offer insurance schemes through their employer managed facilities by way of lumpsum payments, reimbursement of employees health expenditure for O/P care and hospitalization, fixed medical allowance, monthly or annual irrespective of actual expense s or covering them under the group health insurance policies.
Community Health Insurance / Insurance offered by NGOs
In these schemes the members prepay a set amount each year for specified services. The premia are usually flat rate, hence not progressive. Making profit is not the purpose of these funds but rather improving access to services. The Mallur Milk Co operative in Karnataka established a CBHI scheme covering 7000 people in three villages is worth a mention here.
Social Insurance
This is a government established fund which is mandatory for certain groups in the population with explicit benefits in return for payments. These schemes include Central Government Health Scheme and Employee State Insurance Scheme.
Issues and concerns :
The common negative factors which surface after studying various health coverage plans are ,
- Quality of service when services are owned by a plan given by ESIS, CGHS
- Reimbursement delays.
- Lack of universal schemes with monetary restrictions available per year, and limited range of cover and treatment options.
- Inadequate information regarding health, procedures etc.
- System Leakages, provider malpractices.
- Low level medical penetration in India.
Health care was in a dismal condition before 1947, but we have made considerable progress in improving the health status of our country and health insurance is a significant emerging financial tool in meeting health care needs of the people of India. Thus a favourable demand, significant market potential coupled with supportive infrastructure and regulatory environment will bring a boom in the Indian Health Insurance scene.
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