Importance of Health Insurance for Low and Middle-Income Groups

Despite significant developments in almost every sector, top-notch medical infrastructure is something our country still needs to make progress in. In spite of sufficient community health care centres and Government hospitals present in the public healthcare sector, there remains a dearth of experienced workforce, advanced medical equipment, and superior infrastructure therein. The private healthcare sector, thus, gets hit with a double whammy - expectations and responsibility shift to private healthcare providers, but the associated high costs make them too exorbitant to be afforded by families in low income bracket.

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    Health Insurance Coverage Statistics in India

    Enter health insurance– without it, being able to afford good medical treatment at private facilities remains a distant dream for low and middle-income groups.Statistics show that less than one-fifth of our country’s population has substantial health insurance cover. Of those who do have health cover, close to 70% are covered under different government schemes.

    This low permeation of health insurance products across India is one the major reasons why millions of people every year are pushed towards poverty and poor health. Without adequate health insurance, low income bracket people have no choice but to pay out of their own pockets to get access to good medical care – and good medical treatment is expensive.

    Skyrocketing Medical Costs and Inflation

    If we consider average medical costs in India, and then factor in medical inflation, it can be seen that the latter is growing at an average rate of approximately 12-14% on an annual basis.High medical expenses coupled with ever-increasing inflation rates make it almost impossible for those in the low income bracket to meet heavy medical costs, without an insurance plan to offer the needed financial support.

    Government Efforts

    The healthcare contribution made by the public sector is a mere 1% of the GDP - it has not increased proportionally to tend to the country’s growing population. However, the Government is undoubtedly making sincere efforts in developing health insurance for poor people. Studies have shown that the overall spending made by the Indian Government on citizens’ healthcare has seen a 30% increase of total health expenditure. Further, the out-of-pocket expenditure that citizens have to bear has witnessed an impressive 58% decrease.Though these figures are still not up to the mark in comparison to the global healthcare spending practices; it is a good start nevertheless.

    Government-sponsored health insurance schemes are also gradually gaining traction. Rashtriya Swasthya Bima Yojna (RSBY), an inpatient health insurance plans for the indigent, is one the most important Government policies. Under this policy, INR 30,000 is the fixed limit for the total inpatient treatment. Poor people can avail coverage for up to five family members, at pre-fixed rates,towards 700 medical treatments and tests.

    Health Insurance - A Boon for Low and Middle-Income Families

    Having a good family health insurance plan with adequate cover is tremendously beneficial for low income bracket families – it prepares them to deal with the high expenses that sudden medical emergencies throw in their way.

    An adequately covered health insurance policy offers pre and post hospitalisation cover, reimburses/covers hospitalisation expenses, and in case of critical illnesses, the policy even pays out lump sum benefits.

    Further, cashless health insurance for poor is a blessing as it permits medical treatments to be started immediately without delay and without stressing about arranging money to make advance medical payments.

    Wrapping It Up!

    The dedicated endeavour of the insurance sector towards increasing penetration in remote areas of India, higher awareness about Government-run/sponsored programmes, and solid backing by various Non-Governmental Organisations (NGOs), proves that all hope is still not lost. With all these developments and continued efforts, it is anticipated that common people from the low income bracket of society will no longer be compelled to take loans, forgo their savings, or mortgage or sell their assets to avail decent medical care.

    Depending upon specific needs, one could opt for a family insurance plan or an individual health cover. However, having a health insurance plan in the first place for low income bracketfamilies is non-negotiable if a better quality of life is desired.

    The above pointers can help inculcate the realisation in people that investing in an adequate health insurance plan is a lifelong guarantee to a secure and healthy future.

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