Health insurance in India is growing but still has low coverage rates. Only 18% of urban and 14% of rural populations are covered. There are various public and private health insurance options that offer individual, family, and group coverage. Coverage typically includes inpatient hospitalization but recently some policies have begun covering outpatient care as well. Premiums and policies have grown significantly in recent decades but penetration remains low due to lack of competition. Several government programs also provide health insurance coverage.

1. Health insurance in
India
Bhanu kumar Dixit
Poornima university

2. Health insurance in India
• Health insurance in India is a growing segment of India's economy In 2011, 3.9%
of India's gross domestic product was spent in the health sector. According to
the World Health Organisation (WHO), this is among the lowest of
the BRICS (Brazil, Russia, India, China, South Africa) economies. Policies are
available that offer both individual and family cover. Out of this 3.9%, health
insurance accounts for 5-10% of expenditure, employers account for around 9%
while personal expenditure amounts to an astounding 82%. In the year 2016,
the NSSO released the report “Key Indicators of Social Consumption in India:
Health based on its 71st round of surveys. The survey carried out in the year 2014
found out that, more than 80% of Indians are not covered under any health
insurance plan, and only 18% (government funded 12%) of the urban population
and 14% (government funded 13%) of the rural population was covered under
any form of health insurance.
• For the financial year 2014-15, Health Insurance premium was ₹20,440 crores

3. National sample survey office

4. History
Launched in 1986,the health insurance industry has
grown significantly mainly due to liberalization of
economy and general awareness. According to the World
Bank, by 2010, more than 25% of India’s population had
access to some form of health insurance. There are
standalone health insurers along with government
sponsored health insurance providers. Until recently, to
improve the awareness and reduce the procrastination
for buying health insurance, the General Insurance
Corporation of India and the Insurance Regulatory and
Development Authority (IRDA) had launched an
awareness campaign for all segments of the population.

5. NEED OF HEALTH INSURANCE

7. Types of policies
• Health insurance in India typically pays for only inpatient hospitalization and for
treatment at hospitals in India. Outpatient services were not payable under
health policies in India. The first health policies in India were Med claim Policies.
In Year 2000, Government of India liberalized insurance and allowed private
players into the insurance sector. The advent of private insurers in India saw the
introduction of many innovative products like family floater plans, top-up plans,
critical illness plans, hospital cash and top up policies.
• The health insurance sector hovers around 10% in density calculations. One of
the main reasons for the low penetration and coverage of health insurance is the
lack of competition in the sector. IRDA which is responsible for insurance policies
in India can create health circles, similar to telecom circles to promote
competition.
• Health insurance plans in India today can be broadly classified into these
categories:

8. What a Health Insurance policy would normally
cover
• a) Room, Boarding expenses
• b) Nursing expenses
• c) Fees of surgeon, anaesthetist, physician,
• consultants, specialists
• d) Anaesthesia, blood, oxygen, operation theatre
• charges, surgical appliances, medicines, drugs,
• diagnostic materials, X-ray, Dialysis,
• chemotherapy, Radio therapy, cost of pace
• maker, Artificial limbs, cost or organs and
• similar expenses.

9. TYPE OF HEALTH NSURANCE
1. Hospitalization
2. Family Floater Health Insurance:
3. Pre-Existing Disease Cover Plans
4. Senior Citizen Health Insurance
5. Maternity Health Insurance
6. Hospital daily cash benefit plans:
7. Critical illness plans
8. Pro active plans
9. Disease specific special plans

10. Payment options
• Direct Payment or Cashless Facility: Under this facility, the
person does not need to pay the hospital as the insurer pays
directly to the hospital. Under the cashless scheme, the
policyholder and all those who are mentioned in the policy
can undertake treatment from those hospitals approved by
the insurer.
• Reimbursement at the end of the hospital stay: After staying
for the duration of the treatment, the patient can take a
reimbursement from the insurer for the treatment that is
covered under the policy undertaken.

11. Cost and duration
• Policy price range: Insurance companies offer health
insurance from a sum insured of ₹5000/- for micro-
insurance policies to a higher sum insured of ₹50 lacs and
above. The common insurance policies for health
insurance are usually available from ₹1 lac to ₹5 lacs.
• Duration: Health insurance policies offered by non-life
insurance companies usually last for a period of one year.
Life insurance companies offer policies for a period of
several years.

12. Tax benefits
• Under Section 80D of the Income-tax Act the insured
person who takes out the policy can claim for tax
deductions.
• ₹25,000 for self, spouse and dependent children.
• ₹30,000/- for parents.

13. Employees' State Insurance Corporation
Employees' State Insurance (abbreviated as ESI) is a
self-financing social security and health insurance
scheme for Indian workers. This fund is managed by the
Employees' State Insurance Corporation (ESIC)
according to rules and regulations stipulated there in
the ESI Act 1948. ESIC is an autonomous corporation by
a statutory creation under Ministry of Labour and
Employment, Government of India.

14. BENEFITS
• For all employees earning ₹21,000 (US$310) or less per month as wages, the employer contributes 4.75 percent
and employee contributes 1.75 percent, total share 6.5 percent. S This fund is managed by the ESI Corporation
(ESIC) according to rules and regulations stipulated there in the ESI Act 1948, which oversees the provision of
medical and cash benefits to the employees and their family. ESI scheme is a type of social security scheme for
employees in the organised sector.
• The employees registered under the scheme are entitled to medical treatment for themselves and their
dependents, unemployment cash benefit in certain contingencies and maternity benefit in case of women
employees. In case of employment-related disablement or death, there is provision for a disablement benefit
and a family pension respectively. Outpatient medical facilities are available in 1418 ESI dispensaries and
through 1,678 private medical practitioners. Inpatient care is available in 145 ESI hospitals and 42 hospital
annexes with a total of 19,387 beds. In addition, several state government hospitals also have beds for exclusive
use of ESI Beneficiaries. Cash benefits can be availed in any of 830 ESI centres throughout India.
• Recent years have seen an increasing role of information technology in ESI, with the introduction
of Pehchan smart cards as a part of Project Panchdeep.In addition to insured workers, poor families eligible
under the Rashtriya Swasthya Bima Yojana can also avail facilities in ESI hospitals and dispensaries. ESI
Corporation also runs medical, nursing and paramedical schools in some ESI hospitals across India.

15. Central Government Health Scheme-1954
The Central Government Health Scheme (CGHS) was
started under the Indian Ministry of Health and Family
Welfare in 1954 with the objective of providing
comprehensive medical care facilities to Central
Government employees, pensioners and their
dependents residing in CGHS covered cities. This health
scheme is now in operation with cities such as
Bhubaneswar, Bhopal, Chandigarh and Bangalore.

16. Ex-Servicemen Contributory Health Scheme
• Historical Background. Ex-servicemen Contributory Health Scheme (ECHS) was launched with
effect from 01 April 2003. The Scheme aims to provide allopathic medical care to Ex-servicemen
pensioner and their dependents through a network of ECHS Polyclinics, Service medical facilities
and civil empanelled/Govt. hospitals spread across the country. The Scheme has been structured
on the lines of CGHS to ensure cashless transactions, as far as possible, for the patients and is
financed by the Govt. of India.
• ECHS is a flagship Scheme of the Ministry of Defence, Department of Ex-Servicemen Welfare. The
aim of Scheme is to provide quality healthcare of Ex-servicemen pensioners and their
dependents. As on 01 May 2015, a total of 15,21,563 Ex-servicemen have enlisted with the
Scheme along with 32,02,610 dependents. Total beneficiaries of the Scheme, thus amount to
47,24,173.
• Policy framework for the Scheme is laid down by the Govt. and executive control is exercised by
the Department of Ex-servicemen Welfare. The Scheme is managed through the existing
infrastructure of the Armed Forces so as to minimize the administrative expenditure. The existing
infrastructure includes command and control structure, spare capacity of Service Medical facilities
(Hospitals and Medical Inspection Rooms), procurement organization for medical and non-
medical equipment, Defence land and buildings etc. Station Commanders assisted by Senior
Executive Medical Officers (SEMO) exercise direct control over the ECHS Polyclinics.

17. CONT…….
• The Central Organisation ECHS is located at Delhi and functions under the Chiefs of Staff Committee through the
Adjutant General in the Integrated Headquarters of Ministry of Defence (Army). The Central Organisation is
headed by a Managing Director, a serving Major General.
• There are 28 Regional Centres sanctioned by the Govt, all 28 Regional Centres are functional. All efforts are
being made to make the remainder Regional Centres functional at the earliest possible.
• ECHS Polyclinics are designed to provide 'Out Patient Care' which includes consultation, essential investigation
and provision of medicines. Specialized consultations, investigations and 'In Patient Care' (Hospitalization) is
provided through spare capacity available in Service hospitals and through civil hospitals empanelled with ECHS.
• Polyclinics are categorized as Type A to E, based on the number of Ex-servicemen residing in that area. They are:-
– Type A - Above 20,000
– Type B - Above 10,000
– Type C - Above 5,000
– Type D - Above 2,500
– Type E (Mobile) - Less than 2500 (Armed Forces Polyclinics or augmented Armed Forces Clinic will be
provided)