Ashraf Engineer
October 12, 2024
EPISODE TRANSCRIPT
Hello and welcome to All Indians Matter. I am Ashraf Engineer.
Recently, the Union Government introduced the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana that would provide health insurance coverage for all Indians aged 70 and above. It is expected to benefit 4.5 crore families, with 6 crore senior citizens receiving a Rs 5 lakh health insurance cover on a family basis. The scheme is thought to be the world’s largest publicly funded health assurance scheme.
This is a good time, therefore, to talk about health insurance in India, who it covers, who it leaves out and the challenges that lie before it. Remember, the new scheme covers only those 70 and above and for a fixed amount per family. By extension, it does not cover a large number of Indians and all their medical expenses.
With the largest population of any country in the world, India struggles to provide accessible and affordable healthcare to its citizens. This is where health insurance comes in – it plays a critical role in ensuring financial protection against medical expenses.
Late last year a report by the National Insurance Academy said that 73% of the population is not covered and called for robust collaboration between the government, non-profits and industry groups to create micro health insurance with simplified products.
SIGNATURE TUNE
The situation is even worse in rural areas. The ‘State of Healthcare in Rural India, 2024’ report released recently by the non-profit Transform Rural India and the Development Intelligence Unit, which works in healthcare, said only half of rural households have government health insurance. This is coupled with poor access to diagnostic facilities and affordable medicines. In addition, only 12.2% of households have access to subsidised medicines through the Pradhan Mantri Jan Aushadhi Kendras, while 21% lack a commutable medical store.
Meanwhile, the ACKO India Health Insurance Index 2024 said healthcare in India is facing a growing crisis as costs rise sharply – 14% annually. This steep inflationary curve in healthcare is putting immense pressure on families.
Perhaps the most worrying finding is that 62% of healthcare expenses are paid out of pocket by patients and their families. This is a massive financial burden, forcing families to borrow money to cover medical costs. The report said 23% of hospital charges are financed through borrowings. This takes a huge toll on household finances when there is no health insurance.
To compound matters, many health insurance claims are either rejected or approved only partially, says a recent survey by Local Circles that covered 39,000 people in India’s 302 districts. Insurance companies reject claims by sometimes classifying a health condition as pre-existing or only approve a partial amount. The survey said 43% of health insurance policyholders who filed a claim in the last three years struggled with getting it processed.
There is also the problem of skyrocketing premiums. The increases are blamed on a range of reasons, from costly advanced medical technologies to rising pharmaceutical expenses as well as an aging population – all of which come together to strain the healthcare system.
Healthcare is one of the largest sectors of the Indian economy and it is growing on the back of better coverage and services, and increasing expenditure by public and private players. It comprises various segments, such as hospitals, medical devices, equipment, clinical trials and even medical tourism. Health insurance forms a major part of it.
While the health insurance market is growing, distribution is uneven, and the public healthcare system is widely seen to be insufficient and inadequately funded.
As things stand, only 514 million people were estimated to be covered by health insurance schemes in 2021. This is a mere 37% of the population.
India badly needs wider and better health insurance. Lifestyle diseases such as strokes and diabetes are becoming more prevalent. An astonishing 5.8 million die from non-communicable diseases every year.
All these factors make health insurance a necessity. Not only does it provide cover, in many cases it also ensures regular health monitoring. A comprehensive policy would cover critical illnesses but also personal accidents and some pre-existing conditions such as high blood pressure, diabetes and asthma.
However, policy holders face several issues. They range from lack of full disclosure about exclusions and eligibility for claims to ambiguity due to the use of technical jargon. A prominent challenge is the lack of transparency in insurance policies and claim processes. Policy holders usually need help in understanding the details, resulting in confusion over entitlements and reimbursements. Another oft-cited problem is discrepancies in documentation.
In some cases, health insurance companies take too long to process claims, thus delaying patients’ discharge from hospitals. These delays are paid for by the patients and their families, not the insurance companies.
As a result, many feel they are better off without coverage.
So, what’s needed urgently is transparency within the health insurance system. This would ensure that patients are fully informed about their coverage, including the impact of pre-existing conditions and if there are any limitations. Clear communication between patients, hospitals and insurance companies will enable patients to make informed decisions. Transparency also ensures against exploitation by hospitals.
Addressing the challenges before healthcare insurance in India needs such transparency as well as efficiency. By prioritising improvements, the health insurance sector can better serve us and ensure no one is left out of its safety net.
Thank you all for listening. Please visit allindiansmatter.in for more columns and audio podcasts. You can follow me on Twitter at @AshrafEngineer and @AllIndiansCount. Search for the All Indians Matter page on Facebook. On Instagram, the handle is @AllIndiansMatter. Email me at editor@allindiansmatter.in. Catch you again soon.
