Health insurance is vital, especially during unpredictable times like the Covid-19 pandemic. It helps cover medical expenses and provides financial security. India has made progress in healthcare accessibility through schemes like RSBY and AB-PMJAY, aiming to leave no one behind

Throughout the Covid-19 pandemic, individuals experienced the unfortunate loss of their loved ones, and a significant portion of them also had the dual burden of losing both loved ones and financial resources while their hospitalisation for treatment. There exists a well-known adage that posits food, clothing, and shelter as the fundamental necessities of human existence.

However, it is crucial to acknowledge an additional element that is often overlooked by the majority of individuals: the acquisition of health insurance. The natural world displays a significant degree of unpredictability and predictability, which is mirrored in the fragility of human existence. Any form of misfortune has the potential to lead to varying degrees of harm, ranging from minor injuries to severe consequences, including loss of life. Sickness or disease does not give advance notice before affecting the human body.

While it is indeed accurate that money cannot purchase life itself, it can provide assistance in navigating challenging circumstances for both individuals and their families. In contemporary society, possessing a robust health insurance coverage is imperative due to the prevailing uncertainties. It is a cornerstone of personal financial planning, encompassing an individual’s comprehensive financial inflows and outflows.

A significant portion of the population lacks awareness regarding medical inflation, of medical inflation, which is the highest form of inflation. Specifically, it compounds at an annual rate of 15 per cent. This implies that a medical treatment currently priced at `10,00,000 will escalate to `40,00,000 over a period of ten years. Therefore, one may comprehend the significance of possessing a comprehensive health insurance policy.

Undoubtedly, India’s healthcare infrastructure has shown significant progress in recent years. In order to provide universal access to healthcare services for all citizens inside the nation, the government has implemented various measures. The Rashtriya Swasthya Bima Yojana (RSBY) and Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY) are India’s two main public health insurance schemes. RSBY was established in 2008 to offer those living in poverty access to health insurance. The scheme has now been combined with the 2018-born AB-PMJAY. This programme was created to meet the Sustainable Development Goals (SDGs) and its overarching promise to “leave no one behind”.

Aiming to cover 100 million households, or around 500 million individuals, nationwide with health insurance, is AB-PMJAY. As of April 2023, data from the National Health Authority shows that over 50 million hospitalisations under AB-PMJAY had been authorised, with a total cost exceeding `80,000 crore. Additionally, the programme has enrolled over 23,000 hospitals nationwide, which offer beneficiaries a wide range of medical services.

As of March 2022, the Insurance Regulatory and Development Authority of India (IRDAI) reported 62 non-life insurance companies in operation, with 29 offering health insurance products. In addition, the country possessed a total of six autonomous health insurance carriers.

According to data from the Insurance Regulatory and Development Authority of India (IRDAI), the health insurance market in India has experienced significant growth over a period of time. As of March 2022, health insurance companies had accumulated a total of INR 64,230 crores in premiums, reflecting a year-on-year growth of 15.2 per cent. During the corresponding time period, a total of 7.69 crore policies were successfully sold, indicating a growth rate of 12.6 per cent compared to the previous year.

In today’s era, it is crucial for individuals to protect their families by obtaining comprehensive health insurance coverage to guard against unforeseen medical emergencies. There are some crucial factors to take into consideration before to purchasing a health insurance policy:

1) The sum insured ideally should be 15 to 20 times of your annual income.

2) Purchase super top up policy along with base insurance policy to increase sum insured cover, once your base policy cover will exhaust then super top up will come into existence.

3) If you are a family person then go for family floater plans.

4) Claim settlement ratio should be above 95 per cent.

5) High number of network hospitals with cashless treatment facilities.

6) Pre and post hospitalisation expenses should be covered.

7) Less waiting period for named ailment and pre-existing diseases.

8) No claim bonus or cumulative bonus in case of claims also should be there.

9)  No room rent capping should be there in the policy.

10) Policy should have day care; in-patient care treatment, ICU cover and ambulance cover up to sum insured without any capping.

11) Automatic unlimited recharge or restoration benefits should be there for unrelated or the same illness without any waiting period.

12) Covid-19, Ayush treatments, domiciliary hospitalisation and organ donor cover should be there up to sum insured.

13) Ideally claim settlement should be done within 30 days of last document submission to the hospital or insured by the insurance company.

14)  No Co-payment clause should be there.

Given the substantial cost of healthcare in India, the inclusion of health insurance is an essential element in individual financial strategising. Health insurance provides individuals and families with a sense of security by safeguarding them from the economic strain caused by medical emergencies. This is made possible by the availability of many insurance plans and the benefits offered by insurance providers.

(The writer is a Research Fellow, Atal School of Management, Jawaharlal Nehru University (JNU), New Delhi)