How much health coverage is good enough for you

Deepak Yohannan myinsuranceclub.com

How much health coverage is good enough? Which is the best health plan in India? These are questions that insurance experts are asked frequently. And while there are no fixed answers to such questions, it is alarming to find that a major number of Indians are uninsured. That means the majority of the population doesn’t have health insurance and Indians are the second largest group of people who pay their health bills out of their own pockets. While this is a highly worrying situation, we can draw some consolation from the fact that the health insurance sector in India is growing. More and more people are buying health plans and the IRDA has also simplified the rules, making it easier to buy and use health insurance. Read on to know more.

Out of pocket expensesThe BRICS nations, namely Brazil, Russia, India, China, South Africa, have the lowest number of people with health insurance. In a study carried out by The World Health Organization (WHO) in 2011, India was only behind Russia in respect to the out-of-pocket spending. This means that people spent their own money and not the insurance money to clear their medical bills. While Russia led with 89.7% out-of-pocket spending, India was a close second with 86%. Countries like America and England had much lesser percentages with 20.9% and 50.1% respectively.

Reasons for low health insurance penetrationWhile ignorance and poverty are important reasons for low health insurance penetration, a lot of people who can afford health insurance policies, also hold back from buying one. Dnaindia.com quoted Antony Jacob, Apollo Munich Health Insurance's CEO, as saying, "Only about 12-13 per cent of the population has some form of health insurance coverage, including those who are covered through some form of government schemes. People are yet to accept health insurance as a financial tool for medical emergencies. They usually procrastinate when it comes to buying health insurance unless they are faced by a challenging situation.”

The role played by the IRDASince health insurance is extremely important, the Insurance Regulatory and Development Authority (IRDA) stepped in and reformed the health insurance sector so that more and more people could get health insurance. The four biggest health insurance providers of the country, National, New India, Oriental, and United India have now been asked to tie up with banks. This arrangement, known as bancassurance, is an arrangement through which the banks work as agents of the insurance companies, pushing the products and ensuring they reach out to more and more people, even in the remote parts of the county.

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Deepak Yohannan

CEO|MyInsuranceClub.com

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Slow, but growingHealth insurance in India is still a distant dream for many. While a lot of people feel they cannot afford a health insurance plan, many people do not do enough to find a plan suitable for themselves. The situation, however, is changing gradually. Health insurance is the fastest growing sector of the Indian insurance industry. It is therefore heartening to know that there was a 16% rise in the gross written premium for the year 2012-2013, as compared to the previous year. While the figures of 2011-2012 stood at Rs. 13,212 crores, the figures of 2012-2013 stood at Rs. 15,341 crores.  The CARG (compounded annual growth rate) of the premiums of health insurance showed an increase of 32% in the last eight years.

The author is the CEO of MyInsuranceClub.com, an online insurance price & features comparison portal.