Do we really care about our health insurance coverage until something unfortunate happens to us or anyone in our family? Do we really acknowledge the importance of a health insurance policy and how it can save us against medical emergencies which could otherwise drain all our finances?
Forbes Advisor India has collated most up-to-date statistics and facts on health insurance in India which reveals a lot about this $12.86 billion industry.[i]
Overview: The Healthcare System in India
Healthcare is one of the largest sectors of the Indian economy, in terms of both generation of revenue and employment. The overall healthcare sector is rising at a pace due to its growing coverage, better services, and increasing expenditure by public as well private players. Even under the Union Budget 2023-24, the Ministry of Health and Family Welfare has been allocated INR 89,155 crore, a surge of 3.43% compared to INR 86,200.65 crore in 2021-22.
Health insurance and healthcare are often used interchangeably. If we closely look at the different segments of the Indian healthcare sector, then apart from, hospitals, medical devices, equipment, clinical trials and telemedicine and medical tourism, health insurance forms a major part as it helps in providing coverage for the medical services.
Segments of Indian Healthcare Sector
Yet, India has a very decentralized approach when it comes to penetration of health insurance across the country. It is still optional in India to have a health insurance policy for themselves and for their entire family. With such low penetration of health insurance coverage, still a larger section of the society ends up spending a significant amount of their savings on rising healthcare services as they are not insured enough.
Furthermore, India’s healthcare delivery system is categorized into two major components – public and private. So, on paper, every Indian is eligible for free healthcare services but only at government facilities under the public healthcare system of India.
But the question arises, are Indians keen on buying health insurance from private players or find free government schemes more trustworthy and cost-effective.
Let’s have a look at how Indians have been covered under health insurance as per the research data and numbers.
Health Insurance Statistics at a Glance
The health insurance market in India is growing but the overall distribution of health insurance policies in India is not leveled up evenly. Moreover, the public healthcare system is critically facing the issues of insufficient and inadequate funding, thus, the best option which remains for the Indians is the private health insurance players which outplays the health insurance market. The majority of the population seek insurance coverage from the private players because of better and prompt services. Let’s closely look at the statistics:
Health Insurance Coverage-Related Statistics
- Approximately 514 million people across India were covered under health insurance schemes in 2021, which merely covers 37% of the people in the country. [ii]
- Nearly 400 million individuals in India have zero access to health insurance. [iii]
- Around 70% of the population is estimated to be covered under public health insurance or voluntarily private health insurance. The remaining 30% of the population –over 40 crore individuals, devoid of health insurance. [iv]
Health Insurance Premium-Related Statistics
- The gross written premium of the Indian health insurance industry was valued at over INR 637 billion in 2021.[v]
- Public sector health insurers recorded insurance premiums worth INR 272 billion, private sector health insurers accounted for premiums nearly INR 159 billion, whereas standalone health insurers recorded around INR 151 billion across India. [vi]
- In 2021, the state of Maharashtra recorded the principal share of health insurance premiums across India. At 32%, the south-western state accounted for health insurance premiums worth over INR 183 billion. Tamil Nadu and Karnataka followed at ten percent that year.[vii]
Gross Premium Collection of Health Insurance in INR Cr.
| FY15 | 20,096 |
| FY16 | 24,498 |
| FY17 | 30,392 |
| FY18 | 37,029 |
| FY19 | 45,532 |
| FY20 | 50,752 |
| FY 21 | 58,237 |
| (Source: IRDAI Annual Report) | |
Health Insurance Cost-Related Statistics
- As per the Economic Survey 2022-23, the Indian governments’ budgeted expenditure on healthcare nearly touched 2.1 % of GDP in FY23 and 2.2% in FY22, against 1.6% in FY21. [viii]
- The same survey revealed that the rise in the share of expenditure on healthcare services has increased from 21% in FY19 to 26 % in FY23. [ix]
- In fiscal year 2019, nearly 48% of the total healthcare spending in India was done from out-of-pocket payments. This figure has been declined substantially from 64.2 which was witnessed in FY14. [x]
- Social security cost on health increases from 6% in FY14 to 9.6% in FY19. [xi]
Health Insurance Statistics by State
Health insurance coverage in India is far from satisfactory. According to data fetched from the National Family Health Survey India report, over two-fifths (41%) of households have at least one usual member covered under health insurance. Where, only 30% of women aged 15-49 and 33% of men aged 15-49 are covered by health insurance or financing schemes between 2019-2021.
Almost half (46%) of those with insurance are covered by a state health insurance scheme and about one-sixth (16%) are covered by Rashtriya Swasthya Bima Yojana (RSBY). Almost 3-6% of women and 4-7% of men are covered by the Employee State Insurance Scheme (ESIS) or the Central Government Health Scheme (CGHS). The highest proportion of households covered under health insurance or financing schemes is found in Rajasthan (88%) and Andhra Pradesh (80%), and the lowest coverage (less than 15%) is in the Andaman & Nicobar Islands and Jammu & Kashmir.
Let’s dig deeper to understand how the health insurance coverage has been spreaded in the largest 19 states of India.
| State | % of families with at least 1 member covered under a Health Insurance |
|---|---|
| Rajasthan | 88% |
| Andhra Pradesh | 80% |
| Goa | 73% |
| Chhattisgarh | 71% |
| Telangana | 69% |
| Assam | 67% |
| Kerala | 58% |
| Mizoram | 50% |
| Gujarat | 44% |
| Himachal Pradesh | 39% |
| Tripura | 36% |
| West Bengal | 34% |
| Karnataka | 32% |
| Sikkim | 28% |
| Delhi | 25% |
| Nagaland | 22% |
| Maharashtra | 22% |
| Bihar | 17% |
| Jammu and Kashmir | 14% |
| (Source: NFHS India Report 2019-2021) | |
Employer-Sponsored Health Insurance Statistics
Employer-sponsored health insurance is also known as corporate health insurance or group health insurance which is generally provided by the employer of the company or a particular group to its employers.
- As per the Health Trend report shared by world’s leading insurance broker and risk advisor, Mercer Marsh, the cost of employer-sponsored medical benefits in India was expected to rise by 15% in 2022. [xii]
- The Health Trends report surveyed almost 210 insurers around the world, including 74 in Asia, to identify significant trends that will shape the future of employer-provided medical coverage. [xiii]
- The same reports show that five countries in Asia including India have higher medical trend rates. India had the highest medical inflation rate of 14%, followed by China (12%), Indonesia (10%), Vietnam (10%), and the Philippines (9%). [xiv]
A progress seen in employer-sponsored health insurance simply means that the large number of workers or employees have been covered in the country under a health insurance coverage which tends to provide them with safety and security at the hour of need.
Why Does India Need Better Health Insurance Coverage?
India is a home to many lifestyle diseases such as heart strokes, diabetes and many respiratory diseases. All these ailments are very much treatable in India but treatment costs is sky-rocketing, thanks to advancements in medical research and use of sophisticated medical tools.
- In India, nearly 5.8 million die from non-communicable diseases (NCDs) every year. The MMB Health Trends report reveals that cancer (55%), circulatory system-based diseases (43%), and Covid-19 (36%) were the top cost drivers of medical claims in Asia in 2021. Out of them, respiratory diseases (47%), gastrointestinal diseases (36%) and Covid-19 (34%) experienced the most frequent claims.[xv]
- As per the CMIE-CPHS report, Indian households spent more than INR 120 billion on healthcare and medical related services in FY 2022.[xvi]
- As per the recent data fetched from Niti Aayog Report, the existing health insurance schemes are able to potentially cover only 95 crores individuals in India. These schemes consist of government subsidized schemes, social health insurance schemes, and private insurance schemes.[xvii]
Due to the increase in lifestyle changes and rising healthcare costs, purchasing health insurance coverage becomes more of a necessity than a luxury. In such a scenario, health insurance policies are an excellent choice in preparing for such circumstances.
A health insurance ensures regular monitoring of your, provides cashless coverage, and offers the best treatment facilities at their best networked hospitals. A comprehensive insurance policy would also cover critical illness insurance, personal accident insurance and all the pre-existing health conditions such as blood pressure, diabetes, asthma, etc.
Forbes Advisor India believes in the importance of investing in a health insurance policy as early as you start earning. Start early, compare other plans and get the best coverage which are well suited to you and your family’s needs. Not just for tax deductions and exemption, buy a health insurance policy as it provides you the ultimate financial protection in case of unexpected medical costs, which is important as you get older and kind of face a higher risk of health issues.
Also Read: Best Health Insurance Plans
On Care Health Insurance’s Secure Website.
Statistics Related to Covid-19 Pandemic and its Effect on Health Insurance
The covid-19 pandemic has proved to be a gamechanger for the health insurance segment in India. The more chances of hospitalization and exorbitant medical costs in private hospitals have propelled Indians to take up health insurance coverage.
The global health emergency has been a wake-up call for both general public and Indian authorities to take health insurance coverage more seriously.
Let’s see via various figures how Covid-19 pandemic affected the health insurance sector of India.
- Health insurance premium collections saw a growth of 40% in 2020, due to huge rush by public to cover themselves from Covid-19 pandemic.[xviii]
- During the lockdown, the healthcare insurance increased by 34.2% in year-to-date in July 2022, compared to 9.9% growth in July 2021.[xix]
- Health insurance market in India was growing at a CAGR of 24% but rose about 34% in the pandemic time period. [xx]
- In the first half of 2020-21, from April to September, health insurance became the most appreciated segment amongst all the non-life insurers in terms of the premiums collected during that period.
| Non-Life Insurance Segment | Share of total non-life premiums in half ended September, 2020 (%) | Y-o-Y growth in premiums (%) |
|---|---|---|
| Health | 29.7 | 15.8 |
| Motor | 29 | -13.3 |
| Crop | 19 | -4.5 |
| Fire | 11.9 | 33.5 |
| Miscellaneous | 2.8 | -7 |
| Personal Accident | 2.4 | -7.6 |
| Liability | 1.7 | 10 |
| Marine | 1.7 | -13.6 |
| Engineering | 1.4 | 5.8 |
| Aviation | 0.3 | 12.7 |
| Source: General Insurance Council | ||
Statistics And Trends Related to Health Insurance and Digital Technology Usage
India boasts a very mixed kind of healthcare and medical system, where both public and private insurance players both co- exist. Private players have played a pivotal role in bringing digital transformation in providing health insurance in India. Now-a-days there are plenty of plans which cover a huge range of digital benefits such as second opinion, e-consultation, telemedicine, wellness points, online purchase of plans via website or mobile app, etc.
Let’s look at the stats showcasing the industry’s adaptability in shaping the health insurance landscape of India:
- According to PWC’s Health Insurance Consumer Pulse Survey, digital insurance is picking up very fast and has accounted for more than 20–30% of growth in sales, whereas there has been a significant drop in the traditional and offline channels.
- PWC’s surveys also indicate that the insured expect insurance providers and intermediaries to provide easy and convenient digital means across every stage of their journey.
Source: PWC’s Health Insurance Consumer Pulse Survey
- According to Health Insurance Consumer Pulse Survey 2020, health insurance is still largely dominated by third-party agents but digital insurance is picking pace very rapidly. A solid 2% sales growth was observed in the website/app space since 2019.
Source: PWC’s Health Insurance Consumer Pulse Survey
- As per the Mordor survey report, around 65% of Indian respondents are likely to use digital channels such as e-wallets, bank or insurance websites, and e-commerce platforms to purchase insurance. [xxi]
Bottom Line
In the coming years, we can surely imagine a much better picture of health insurance penetration across India due to several reasons. The continuous rising medical inflation and increasing cost of medical services will prompt Indians to buy health insurance for themselves and their family or else it might strain all their savings and will lead to a heavy medical debt.
Moreover, with the advent of “Digital India” and the increased use of tabs and smartphones, buying an insurance policy is just a click away. People are gradually accepting the easy and convenient mode of buying insurance schemes via online channels such as apps and websites instead of holding on to traditional methods such as insurance agents.
With mounting out-of-pocket expenses, increased awareness, rising medical inflation, higher prevalence of lifestyle diseases and positive stance of government on healthcare sector, experts are confident that all these factors together will ensure “insurance for all” in India to turn into a reality.
Sources
[ii] Statista
[iii] Niti Aayog
[iv] Niti Aayog
[v] Statista
[vi] Statista
[vii] Statista
[viii] PIB Government Press Release
[ix] PIB Government Press Release
[x] PIB Government Press Release
[xi] PIB Government Press Release
[xii] Mercer Marsh Benefits Health Trend Report
[xiii] Mercer Marsh Benefits Health Trend Report
[xiv]Mercer Marsh Benefits Health Trend Report
[xv] Mercer Marsh Benefits Health Trend Report
[xvi] Centre For Economic Data And Analysis
[xvii] Niti Aayog
[xviii] GIC Council Report
[xix] TechSci Research
[xx] PHD Chamber of Commerce And Industry