How healthy is India? Post the pandemic, this question has garnered even more importance. So, has our health infrastructure improved? Is care more accessible? And why is health insurance so expensive now?
According to the Economic Survey 2022-23 by the government of India, there’s been a steady increase in insurance penetration from 2.7% to 4%.
However, the penetration of health insurance as compared to other countries remains low. On the global scale, India is the second most under-insured country. Data shows that it stands at 0.4% in India, compared to 0.7% in China and 4.1% in the US. And the biggest reason for this is the lack of trust, knowledge, and awareness.
While ‘healthcare’ is a very important factor that signals how a country is performing, everything is but merry with healthcare in the Indian context.
Overview Of The Rise In Health Insurance Costs
Over the past few years, there’s been an unprecedented rise in the cost of healthcare, nearly keeping pace with retail inflation. Medical inflation is around 14%. This means any medical procedure that costs Rs 3 lakh today, could cost around Rs 6 lakh 5 years down the line.
When you look more closely at the different categories, you'll see that the cost of medicine went up by 8.6%, medical test costs increased by 6.2%, hospitalization charges went up by 5.9%, and consultation fees rose by 4.5%. Unfortunately, this means that people end up paying more for healthcare expenses.
Out-of-pocket costs for medical expenses make up for nearly 62% of the total healthcare costs in India as per the Insurance Regulatory and Development Authority of India (IRDAI).
Despite a tremendous rise in healthcare services, it remains unaffordable to most Indian citizens. Nowadays, medical procedures, surgeries, and medicines cost nothing less than a few lakhs. And if you do not have health insurance, then medical bills severely impact your finances.
But why is health insurance so expensive now? And why is there a rise in costs? Let’s delve deeper.
Why Is Health Insurance So Expensive Now?
No doubt, the industry is making significant strides in research and providing world-class treatment options. However, as the quality of healthcare continues to improve, so do the costs associated with it. And there are multiple reasons for this.
1. Medical inflation
The cost of medical care in India has been increasing at a much faster rate than the general rate of inflation. Meaning, healthcare costs are becoming more expensive relative to other goods and services.
Further, the cost of medical supplies, raw materials, warehouse charges, freight charges, and import duties has globally risen. This causes a significant increase in medical inflation.
2. Prevalence of lifestyle diseases
India is experiencing a considerable increase in the incidence of lifestyle diseases such as diabetes, hypertension, and heart disease. These conditions require long-term treatment, and management. Sometimes even expensive treatments, surgeries, and specialized procedures. This can further drive up the cost of health insurance.
3. Lack of adequate healthcare infrastructure
India's healthcare infrastructure is still evolving. It lacks adequate facilities and resources to provide quality healthcare services. As a result, patients often have to opt for expensive private healthcare services, which further increases health insurance costs.
There's also a lack of healthcare infrastructure in rural areas. Many facilities don’t have the proper infrastructure, equipment, and skilled personnel to provide quality healthcare services.
4. Research and development
The development of treatment options for life-threatening ailments causes a significant rise in medical expenses. The process of devising prescription drugs and treatment methods for critical conditions requires a significant investment of resources.
This ultimately increases the cost of healthcare. Additionally, India imports a lot of equipment, which contributes to an increase in costs.
5. Medical tourism
An increasing number of tourists visit India to seek healthcare services for serious ailments such as cancer and organ transplant. This surge in demand for critical illnesses has put a strain on the healthcare industry, leading to higher costs.
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The Role Of A Health Insurance Provider To Help Reduce Costs
Many people struggle to access affordable care in countries like India, where healthcare costs have been increasing rapidly. Health insurance is one solution that helps bring down healthcare costs and makes healthcare more accessible. Let’s see how:
1. Negotiating lower prices with healthcare providers
When you purchase group health insurance via providers like Loop, besides health insurance, you get additional benefits. Loop helps negotiate prices with healthcare providers to lower prices.
For instance, with our partner tie-ups, you can get up to 30 to 40% discount on lab test booking in cities like Pune and Mumbai. Over and above, the medical advisor on the Loop app helps you book tests at the nearest center and also analyzes the results with you.
2. Encouraging preventive care
With preventive care, you can detect health problems early and avoid more costly medical interventions in the future. Group health insurance plans with Loop cover preventive care services, such as annual check-ups, screenings, and vaccinations, at no cost to you.
We have an ecosystem of in-house doctors who work to keep you healthy. They play a crucial role in encouraging preventive care.
Whether it’s supporting you with regular health screenings, educating you about healthy lifestyle choices, developing personalized preventive care plans for you, encouraging health behaviors, or providing resources and support, you have everything handy, all in one place.
3. Managing utilization
When you have the right healthcare providers, they can help you save money and use healthcare services smartly. This means they will keep an eye on the medical procedures you need. So you avoid unnecessary ones that increase the cost of caring for yourself and your family.
Loop’s claims support team consists of claims managers who are doctors too. They help with claim related issues. The idea is to look at health insurance and claims from a different lens where user experience is more important.
Of course, along with this, we also keep claims numbers, approvals, collections, and amounts in mind. Add to this, our in-house doctors also recommend the right course of treatment for you.
4. Providing financial protection
Group health insurance provides financial protection as it helps pay for medical expenses. Typically, your health insurance premiums cover a wide range of medical expenses, such as doctor visits, hospital stays, prescription medications, and more.
As providers cover a portion of the costs, it reduces your financial burden and protects you from incurring large or unaffordable medical billings. And as mentioned earlier, providers often negotiate discounted rates on your behalf, reducing the cost of medical care. Without insurance, you bear the full cost of medical care.
5. Encouraging healthy behaviors
One of the significant advantages of a workplace wellness program is its ability to support long-term healthy behavior.
Through preventive care measures, you can catch health problems early when they are easier to treat and ensure they don’t reoccur.
Loop also offers holistic wellness sessions that focus on many dimensions of well-being to help you stay on top of your wellness goals. These sessions are led by industry experts.
Lastly, we also offer chronic disease management programs like diabetes management and smoking cessation. Alongside this, we also provide resources and education to help you make informed decisions about your health. This could be about holistic well-being, disease prevention, nutrition, and more to keep you away from the emergency room.
Good to know: How Much Do Corporate Wellness Programs Cost?
Quality Over Cost
Everyone needs good healthcare. However, many people ignore their medical needs while focusing on other parts of their life. When a medical emergency occurs, it’s very difficult to handle the costs of healthcare given the rise in costs.
In situations like these, group health insurance can tremendously help. With a mediclaim policy from trusted insurance companies, means you don't have to worry about rising costs.
Your insurance takes care of it! If you haven't bought a group health insurance plan yet, it's time to get one so you can handle the increasing healthcare costs. Talk to our experts for the best solution.
