“Health insurance is largely understood as a protection against financial loss by unforeseen sickness. It helps manage health care costs beyond a threshold amount through pooling.” Read about the types of health cover options being offered in India.
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Author: Sushil Sandhu
Health insurance is largely understood as a protection against financial loss by unforeseen sickness. It helps manage health care costs beyond a threshold amount through pooling.
In India, health care has always been a problem area owing to its large population and much of it below the poverty line. Before independence, high morbid rate, high moralities and prevalence of infectious diseases put the health structure in dismal condition. After independence, primary health care was emphasized upon.
While the well to do segments in society has acceptability and affordability towards medical care, the same cannot be said about people belonging to poor segments of the society.
The first health benefits that came into existence in India were in 1923 through Workmen’s Compensation Act. Later, in 1948 ESI Act was passed and the First ESI hospital was established in 1952. The health insurance being provided was by employers or through voluntary schemes of General Insurance Corporation popularly known as Mediclaim. In 1999, the IRDA ACT was passed to allow Private sector insurance companies in India. Again in 2002 Insurance Amendment Act was passed with emphasis on TPAs.
Today there is a need for establishing resources in health sectors to ensure availability of medical care to all.
Type of schemes
The existing Health Insurance Schemes in India are administered by;
- Voluntary Schemes Provided by Private and Public Sectors
- Employer Based Schemes
- Community Based Health Insurance, and
- Mandatory Health Insurance Schemes run by the government
Voluntary Schemes Provided by Private and Public Sectors: This is an optional scheme which can be voluntarily availed by the public by paying a premium
The various Private Insurance Companies providing health insurance in India are;
ICICI Lombard
Bajaj Allianz
Cholamandalam
Royal Sundaram
The private insurers have come up with many innovative products. The Insurance is provided in many cases up to age 75. Diabetic Patients can also avail of heath Insurance. They provide cashless benefits and medical reimbursements.
In the public sector, General Insurance Corporation (GIC) with its four Subsidiaries (National Insurance Corporation, New India Assurance Company, Oriental Insurance Company and United Insurance Company) provides voluntary insurance services.
The advent of Third Party Administrators is expected to play an important role in health insurance market in ensuring better services to policy holders.
Employer Based Services
Employers in public as well private sectors offer employer based insurance schemes by the way of lump sum payments, reimbursement of employee’s health expenditure for outpatient care and hospitalization, fixed medical allowance.
The railways, defense and security forces, plantation and mining sectors provide these benefits to its own employees.
The private sector employers also provide health insurance by tying up with public or private sector insurance providers.
Community Based Schemes are typically targeted at poorer populations living in communities. These are generally run by NGOs. Such schemes are financed through patient collections, government grants and donations.
Some examples are Self Employed Women’s Association (SEWA), Gujarat.
Tribhuvan DAS Foundation with membership restricted to members of Amul Dairy Corporation.
Voluntary Health Services, Chennai
Sewagram, Wardha and more.
Social Insurance or Mandatory Health Insurance Schemes
These include Central Government Health Scheme (CGHS) and Employees State Insurance Scheme (ESIS).
The contributions are made jointly by the employee employer and state government towards the scheme. Under this scheme those covered are entitled to outpatient medical care at dispensaries and panel clinics, consultation with specialist and emergency treatments.
Though the government has understood the importance of providing health Insurance to all citizens still the penetration of health insurance is found to be very low. The existing schemes focus on hospitalization expenses. The voluntary schemes suffer from problems like adverse selection, high administrative costs, cream skimming and moral hazards.
Health Insurance has the potential to improve upon access to good health care structure. The challenge lies in making it equitable, affordable and providing quality health care to the masses as a whole. Mechanisms need to be developed where the government and household can pool in their funds. The success also depends on the design of such a system.
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