Every year the costs of medical treatments rise, and the leading cause has to be the fact that most of us now lead an unhealthy lifestyle. And though technology advancements and innovation have made every kind of treatment possible, not everybody can afford to pay for the expensive medical treatments today. However the health insurance industry has made such treatments accessible to everyone. A huge portion of India population today relies on health insurance to access healthcare. And this has led to a significant growth of the health insurance industry.
Let's talk about factors that majorly influence the growth of the health insurance industry.
Medical Inflation – Every year, medical treatments become 15% more expensive than the previous year making a massive chunk of the population turn towards health insurance. Moreover, advanced treatments such as robotic surgery, laser surgery, cyber knife, etc. has increased healthcare costs.
People see medical inflation impacting their friends, family, and people in their professional network which has created a fear of not being able to afford expensive healthcare in them. And under such circumstances, health insurance policies give them the mental peace. The increasing need to be able to get proper treatment despite medical inflation through healthcare claims has increased the need for health insurance.
Ayushman Bharat Yojana – Ayushman Bharat Yojana or National Health Protection Scheme launched in 2018 aimed at offering health coverage of up to 5 Lakh to 10 crore families in need. This ended up spreading awareness about health insurance among the masses, along with providing healthcare to over 50 crore beneficiaries. As soon as the scheme launched, it hit the news headlines and captured everybody's attention, creating the need for health insurance. And since the scheme catered only to the underprivileged section of the society, not everyone could benefit from it. And this limitation led people, even the ones who did not meet the criteria, to buy insurance.
Ability to Buy Online – Earlier, people had little knowledge of health insurance plans and even fewer choices since the insurance agents would sell one single product majorly to meet their targets. Hence, insurance purchases were limited. Now, rising players such as PolicyBazaar and the likes have made advancements in the health insurance industry and taken their companies online. With smart health insurance portals online, people can:
- Browse through hundreds of options and choose the one that best suits them.
- Compare various policies easily to get the best deal.
- Buy health insurance conveniently, even when on the move.
- Rule out the possibility of misselling
Insurance in Bundles – The ecosystem has understood that there is uncertainty in the lending market. Therefore, financial service companies often offer health insurance bundled with their products. For example, you may be required to buy a health insurance plan as one of the pre-requisites for being eligible for a home loan. The reason is that in case of a medical emergency, people would end up using their income to pay for treatment instead of using it for their home loan EMI. In this case, if they're already covered, they get adequate treatment while the financial service company continues to recover monthly payments, which might have otherwise been spent on healthcare.
Bite-Sized Insurance – The awareness of bite-sized insurance among people is leading to the overall growth of the health insurance industry. Typically, insurance policies cover everything from cold to cancer and cardiac arrest. But a bite-sized plan covers only a specific disease or illness. For example, some policies offer coverage for dengue, a vector borne-disease, seasonal diseases, an accident, etc. And since a bite-sized plan covers only one disease, the premium is naturally low and the cover affordable. Moreover, bite-sized insurance policies do not require a lot of paperwork or medical tests; they can be purchased more conveniently.
Group Health Insurance – Being one of the fastest-growing economies in the world, India offers a huge space for Multi-National Corporations. Moreover, the number of startups has gone from 7,000 to 50,000 in a decade, with many of them becoming the leading names very soon. Take Swiggy and Flipkart, for example.
With the increasing growth, both MNCs and startups are expanding and employing more and more people. And to retain employees and attract talented candidates, employers are following the trend of making their companies more employee-friendly, by offering employees group health insurance.
Earlier, health insurance as an employee benefit was usually only offered in MNCs. But now, many enterprises and startups also provide health cover to stay competitive. And this massive demand for health insurance in the corporate sector has also aided the growth of the health insurance industry.
Product Diversity – People are often not able to buy certain health insurance plans since they don't qualify for them due to a pre-existing disease. In simpler words, the plans may not cover certain pre-existing illnesses. However, people now have the advantage of choosing specific plans that cater directly to their needs. For example, there are special plans for cancer, diabetes, cardiac issues, etc. So, instead of buying comprehensive and expensive plans, more and more people buy illness-specific plans, expanding the options of health insurance available to more people.
Monthly Premiums – Usually, premiums are paid in advance on a yearly basis and have high premiums. This is the reason people are unable to afford health coverage. However, there are policies sold by banks that allow you to pay premiums on a monthly basis. Now since the policyholders can pay monthly instalments of the premium, they can enjoy health coverage without cutting a hole in their pockets every year. This makes the premiums more affordable, enabling more people to buy health insurance.
With all of these factors working simultaneously, and as more and more people get aware, the growth of the health insurance industry will probably keep soaring.
The Author of the article is Anuj Jindal, co-founder of SureClaim