Insurers need to expand the ambit of health insurance to include outpatient care as part of the health insurance system to get Young India into buying insurance. It is time for insurers to move on to primary and secondary care, and preventive care as they have been focused on tertiary care and hospitalisation for long, said Insurance Regulatory and Development Authority of India Chairman Subhash Chandra Khuntia.
More often than not, health insurance kicks in when the patient is hospitalised. Outpatient department (OPD) treatment refers to diagnosis done on the advice of a medical practitioner or doctor, by simply visiting their clinic or even a consultation room at a multispecialty hospital. Many private insurers do, in fact, provide coverage for outpatient care. But the premiums are very high.
Speaking at the Confederation of Indian Industries’ health insurance summit, Khuntia urged insurers to develop disease-specific products which could help policyholders in preventing different ailments.
He further said insurers need to catch people young for health insurance. “Youngsters have this notion that they are generally healthier than the older generation. We have a situation wherein a large proportion of health insurance is bought by the 40-50 age group,” said Khuntia.
In the light of the Covid-19 pandemic, health insurance has seen a surge in demand from consumers. At a time when the non-life insurance industry has been struggling due to the pandemic-induced lockdown, health insurance has seen 13.4 per cent growth in the first half of 2020-21, compared to the same period last financial year. The standard Covid products brought in by the regulator have also been received well by policyholders. So far, 15 million lives have been covered against Covid-19. The Covid-specific products were launched on July 10.
Speaking about the missing middle class from the health insurance sector, Khuntia said people at the upper end of the economic scale are aware of health insurance needs. For the poorer sections of society, the government has some health insurance schemes, such as Ayushman Bharat, but the middle class — estimated at 700 million people — does not avail of health insurance in a big way.
It is important for insurers to gauge their needs and accordingly bring out innovative products. Apparently, the government is also looking to bridge this gap and has invited expressions of interest from insurance companies.
Khuntia also urged insurers to focus on prevention of diseases — that will lead to less hospitalisation, and less morbidity manifesting itself. And, it would, ultimately, help the insurance companies as well as the insured, with premiums going down. Even the annual health check-ups can be made part of the health insurance package, he added.
Another segment where insurers can focus on is roping in employers in the medium and small industries as well as in the unorganised sector, wherein they provide health insurance to their workers. Through this, a large number of workers can get covered under health insurance.
Insurance penetration in the country is 3.7 per cent of gross domestic product (GDP). Of which, a larger part goes to life insurance. As far as the non-life insurance sector is concerned, the penetration is 0.93 per cent. Of this, almost 31 per cent is in health insurance. So, nearly 0.27 per cent of GDP is contributed by health insurance. Of the 4 per cent of GDP spent on health insurance, 0.27 per cent comes from health insurance.