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Medical Insurance in India

Updated on May 7, 2016

Medical Insurance in India

Medical insurance is an essential financial product, as it helps to save on healthcare costs, and prevents financial hardships in case of a serious illness or medical emergency requiring extended hospitalization. However, medical insurance in India remains a very small market, especially when compared to the coverage of medical insurance in the developed world.

Medical Insurance Coverage in India

According to an article published on thehindu.com, only 21.6 crore Indians, or 17% of the total population, were covered by medical insurance as of March 2014, as per estimates prepared by the Insurance Regulatory and Development Authority of India (IRDA). In particular, the poor are especially vulnerable, as they are either employed in the informal sector, the agricultural sector, or are self-employed. The Indian government’s spending on healthcare is a mere 1% of the total healthcare spending by all the governments of the world, even though India is home to 16% of the world’s population.

Ways to Get Medical Insurance

An Indian citizen can either get medical insurance from his employer, buy private health insurance schemes from one of the many insurance companies in India, or opt for the government’s Rashtriya Swasthya Bima Yojana. Employer-provided health insurance coverage is very limited; it only goes to those in the formal sector, a small proportion of the Indian economy. Many Indians rely on the medical coverage that they purchase, in the form of health insurance plans, from one of the many health insurance companies in India. The government of India has started a medical insurance scheme known as the Rashtriya Swasthya Bima Yojana (RSBY), which aims to provide health insurance coverage to below poverty line (BPL) families. According to information on the nhp.gov.in website, beneficiaries under RSBY are entitled to hospitalization coverage up to Rs. 30,000 for the majority of the illnesses that require hospitalization. The RSBY beneficiaries only need to pay Rs. 30 as a registration fee, and the Central and State governments pay the premium to the insurer selected by the State government of the state in which the beneficiary resides. RSBY covers pre-existing conditions from day one, and there is no age limit. Five members of a family can be registered under one beneficiary; the head of the household, the spouse, and up to three children.

Private Health Insurance Schemes

All the insurance companies in India selling life and medical insurance offer a wide variety of medical insurance plans. An individual can opt to cover just himself, or buy a family floater policy which covers the individual’s wife, children, and dependent parents. Max Bupa offers a wide variety of medical insurance policies. Individual health insurance plans from Max Bupa include Heartbeat and Health Companion. These provide cashless hospitalization, and Health Companion even has the facility of no room-rate capping. There are two varieties of family health insurance plans from Max Bupa, Family Floater and Family First. The Family First plan is more comprehensive; it allows for up to 14 family members, insurance coverage for maternal care, and automatic coverage for your new born baby. There are also plans available for critical illness care from Max Bupa. Max Bupa’s critical illness policy offers insurance coverage for 20 critical illnesses including cancer, open heart replacement or heart valve repair, coma, kidney failure and dialysis treatments, permanent paralysis, and bacterial meningitis, among others. Critical illness cover can be taken with the family floater option.

Coverage and other Details of Medical Insurance Policies

Most individuals buy health insurance coverage of RS 3 lakh to Rs. 5 lakhs. A medical test is usually required to measure the health status of the to-be-insured person. Many policies come with an optional accident insurance cover, which provides monetary support during the time that the insured is unable to work due to the injury, in addition to the hospitalization costs covered by the insurance policy.

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