Under the recently launched health cover of Rs 5 lakh for those over 70 years of age under the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana, all senior citizens aged 70 and above will receive health coverage, regardless of their income. This expansion, as per government claims, is set to benefit around 4.5 crore families, including 6 crore senior citizens, by providing them with free health insurance coverage of up to Rs 5 lakh per family.
Experts say that this move will give a significant boost to the Indian healthcare infrastructure, and will take the nation closer to the goal of healthcare for all. "The announcement of this health cover will empower one of the most sensitive demographics and will provide them security against major health concerns. The launch of this health cover under PM-JAY will help them avail quality treatment facilities which otherwise used to be a financial burden for them or their families," said Dr Manisha Karmarkar, CEO, DPU Super Specialty Hospital, Pimpri, Pune.
Interestingly, this development comes in the backdrop of some good news in the Indian health insurance market, with national insurer Life Insurance Corporation (LIC) announcing its plans to foray into the country's health insurance sector.
The insurance industry, as per reports, had been anticipating government amendments to the Insurance Act that would allow life insurers to offer lucrative health policies. The big picture here is the government's goal of achieving universal coverage by 2047 by way of expanding health insurance coverage. LIC’s entry into the health insurance market, with its strong brand presence and a sales force of over 1.3 million, is expected to boost these efforts.
A recent research paper titled 'Public Health Insurance Status and Utilization of Healthcare Services Across India: A Narrative Review' by Vaibhavi Shende and Vasant Wagh, says that, in India, improving public health insurance literacy is crucial for enabling people to make knowledgeable healthcare decisions and maximise the benefits provided by public insurance programmes.
In a published paper that aims to understand the workings of the health insurance sector in India, author Madan Mohan Dutta from the department of Management, JD Birla Institute, Kolkata, explains how health insurance is "one of the major contributors of growth of general insurance industry in India, as it alone accounts for around 29 per cent of total general insurance premium income earned in India. "The growth of this sector is important from the perspective of overall growth of general insurance industry,” says Dutta.
He also highlights the problems in this sector which are affecting its performance. "There is a significant relationship between earned premium and underwriting loss. There has been an increase of premium earnings which instead of increasing profit for the sector in fact has increased underwriting loss over the years. The earnings of the sector is growing at a compounded annual growth rate of 27 per cent still it is unable to earn underwriting profit."