News Life and Health11 Dec 2017

India:Around 1/3 of urbanites have their own health insurance

11 Dec 2017

Indians are more likely to have a motor or life insurance than health insurance, according to a survey by private research firm, Chrome Data Analytics and Media (CDAM).

Only 31% of Indians who live in major cities had medical policies independent of those provided by their employers in spite of nearly half the survey respondents admitting to having faced a “financial emergency” due to medical needs, reported The Hindu citing the survey findings.

This was because the majority of Indians were not correctly estimating the potential pitfall — of exorbitant bills — from not having insurance and only saw it from the angle of tax benefits.

“Even among those who did have health insurance, most had covers below INR200,000 (US$3,100) which in many cases doesn’t cover a serious ailment like a heart transplant,” said Pankaj Krishna, Founder of CDAM. While a vehicle insurance was mandatory, a life cover too was popular because of tax benefits and not due to having a succession plan in place, he added.

The survey polled about 4,000 people — 51% of them women — from Delhi, Mumbai, Kolkata, Chennai, Pune and Bengaluru. While some had multiple policies, it emerged that 41% of those interviewed had a life insurance policy and 37%, one for their vehicle. Only 36% had a health cover. Moreover, 87% of those considering health insurance were only doing so to save tax, the survey reported.

Indians are also known to spend a significant fraction of their health expense out of their own pockets. 89% of health expenditure by India, in 2014, was out-of-pocket as compared to a global average of 18%. Also, the government contributed no more than 30% of individual health expenditure in India according to a 2014 — the latest — assessment by the World Health Organisation.


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Dr C H Asrani

I wrote this blog for a consumer forum: Seems apt for this news, hence reproducing with minor changes. Medical bankruptcy Circa 1998. A close friend - a honest general practitioner’s wife was diagnosed with aggressive cancer. He was feeling comfortable with 100K health insurance (+23K no claim bonus). The bill of first one week was 98K (with doctor’s fees not included). He ended up sending 11 lakh INR over 8 months! Fortunately his friends supported and he could give rational treatment to his wife, who ultimately succumbed. It is no big secret; bad health needs big money; that too ASAP and big money needs and BAD DEBT often coincide. Unexpectedly large medical bills impose a sizable burden on those who are already physically and economically fragile. Centuries of debt ridden Indians, paying heavy interest to ‘Zamindar’ for generations is attributable more to money having been used for treating some ailments rather than loans taken for weddings/ other needs. Medical debt is very common, affecting both segments (either with or without health insurance) of population. The so called ‘solid’ middle-class Indians, incur medical debt following, in most cases, unexpected/ serious illness. It may be anything from huge drawing on credit card (at 3.9% interest per month), taking a loan on PF and mortgaging / encashing Life Insurance policies/ mutual funds/ FDs to selling jewelry/ property etc etc. In some cases, medical debt can contribute to a collapse of creditworthiness to the point of personal bankruptcy but social stigma prevents them and they doggedly trod on endlessly… What is the way out? Either universal health cover, which with our population and paucity of funds remains an option on paper; or people opting for health insurance as per their needs and limitations. Those – even of lower social economy status – should have at least 5 lakh+ family floater cover. Even those undertaking treatment at public hospitals should have a family floater of 2-3 lakhs as even there drugs may have to be bought from out and several tests may have to be done outside, if hospitalized.

11 December 2017

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