Health Insurance is the Need of the Hour

Health insurance has become a necessity in today’s world. There are several reasons for an individual to have the protection of health insurance

Of all the risks which an individual household faces, health risk probably poses the greatest threat to lives and livelihoods. Everyone needs medical care sometimes and health falls with age. Sedentary life styles, hectic work schedules, long working hours and eating habits are leading to silent diseases causing rise in the number of people suffering from obesity, diabetes and cardio-vascular diseases. As per a Government of India report of 2006, morbidity rate for males is 8.5 per cent (rural) and 9.1 per cent (urban) and for females 9.3 per cent (rural) and 10.8 per cent (urban).

The other important risk faced by individuals is the risk of accident. As per a report in the National Medical Journal 2.5 million persons were hospitalised due to road accidents in 2005 and it is projected to be around 3.5 million in the year 2015.

There has been high escalation of medical costs due to advancement and high tech intervention in health, diagnosis and therapeutic procedures as well as prescription drugs. We live in a system of patent protection-a legal monopoly to pharmaceuticals that has been making the new drugs expensive and increasing the cost of care.

The explosion of knowledge in genetic engineering, biotechnology, nano-technology, medical informatics and gene therapy will further escalate the costs for most people.

As per a study of NCAER in association with Max New York Life Insurance Company, the average medical expenses of an Indian household is 6.5 per cent of the annual income and it increases sharply to around 37.4 per cent in case of major ailments. According to a study “India Knowledge @ Wharton Report” around 65 per cent of people remain in debt for life due to their expenditure on major health problems.

Health insurance is the ticket to healthcare and the best mechanism to finance healthcare to protect one’s savings, avoid debts and miseries.

National Insurance has been a major player in the health insurance segment in the country. It has in its basket 18 types of health policies to cater to the needs of the different segments of the society. In addition, the company has also been involved in the implementation of Rashtriya Swasthya Bima Policy in 50 + districts in the states of Haryana, Bihar, Assam, Tripura, Mizoram and West Bengal.

For the year 2010-11, National Insurance completed a health insurance premium of Rs 1681 crores out of the industry’s total health insurance premium of Rs 11,137 crores mobilised by 22 multi-line non-life and three mono-line health insurance companies. The company issued 14.47 lakh of health insurance policies covering 2.39 crore of persons. It paid 4.11 lakh number of claims amounting to Rs 1399 crore during the year.

Health insurance is the fastest growing non-life insurance segment and it is estimated to grow at a CAGR of 35 per cent during the next four to five years. Increased awareness, expanding aspiring class, rise in health costs, government initiated schemes like RSBY for the BPL population, construction workers and street vendors etc., have given a big boost to the health insurance segment.

The company has geared up to play a significant role in this high growth business through planned participation in the different segments like government schemes, retail and wholesale. Though losses has been a cause of concern in this business to all the players, the company plans to manage it sustainably by initiating a number of measures like proper monitoring of TPAs, creation of health cells in regional offices commanding high volumes of health business, emphasising on investigation and fraud control etc.