Table of contents Sr no

Table of contents
Sr no. Table of contents Page no.
1 Title page
2 Company certificate
3 College certificate
4 Acknowledgement
5 Table of contents
6 List of tables
7 List of figures
8 Executive summary
9 Industry overview
10 Introduction to company profile
11 Department introduction
12 Literature review
13 Need for study
14 Objective of study
15 Research methodology
16 Process mapping
17 Health insurance issues, challenges and way forward
18 Features of health insurance policy
19 Increasing scope of growth in Health insurance sector
20 Country’s potential affected by low healthcare expenditure in country
21 Budget 2018 – a boost for health insurance penetration
22 Tax related reforms introduced in Budget 2018
23 Importance of ICR
24 What you should look at while buying a health insurance
25 Health insurance ; risk management
26 Data analysis
27 Findings
28 Future scope
29 Recommendations
30 Bibliography, References

List of tables
Name of the table Page no.
Key personnel 8
International comparison of health insurance penetration 26
Market share 31
Tax deductions 49
Incurred claim ratio 53,54
Icr standalone comparison 55
Comaparative Icr 56
Data table 62
Correlation 62

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List of figures
Name of the figure Page no.
Market share 30
Stunting rate of children 42
Scatter chart 63

Executive summary
“HEALTH CARE IS NOT A PRIVILEGE. IT’S A RIGHT”. As the quote suggests each and every individual in the country has the right to avail a quality treatment in case of an individual is facing a medical emergency. But in our country still a high percentage of population is devoid from such rights. Not all can afford to go to high quality but expensive hospitals to get their treatment done. Thus one’s who can’t afford private hospitals look up to government hospital for their well-being. Unfortunately spending by government on health care is so low that the conditions of most government run hospitals are so worse one would fear going to that hospitals to get their treatment done. Such being a state of India’s health care system out of pocket expenditure for medical treatment in India has shoot up leading to nearly 70% of people paying their medical treatment costs out of their pocket which naturally affects their financial standing leading to huge burden of getting their treatment done, which could have been avoided if they would have been covered by a Health insurance policy.
IRDA’s website suggests there’s only 0.77 % of health insurance penetration (as % of GDP) in India which is extremely low as compared to other countries. With Increase in FDI and various government measures and schemes taken up by government to improve the penetration and also promote new entrants in the market, this would also lead to huge economic growth in terms of increasing jobs and providing better services to the clients leading to overall development of insurance industry. While still the thought process of people regarding health insurance is that it’s an expense and not a security ,but with proper awareness campaigns and providing correct education regarding benefits of a health insurance to the prospective clients can lead to improved perception of them regarding the insurance cover ; leading to increase in penetration of health insurance sector in not only urban but as well as rural areas. Seeing a constant rise in medical costs and dismal conditions of government hospitals, taking a health insurance policy would not only enable you in getting treatment in better hospitals but also provide you a good enough health cover at competitive prices thus reducing your financial burden and mitigating your risks. With various reforms brought up by government in Budget 2018 and existing competition among health insurance companies, there is everything to gain for customers and look forward to buy a health insurance for safe future for themselves as well as their families which thereby shows a positive sign for improving penetration in our country.
Research topic
A study on penetration of Health insurance sector in India
Introduction about the company
CignaTTK medical health insurance organisation confined is a joint undertaking between the U.S. Primarily based global fitness services chief, Cigna agency and Indian conglomerate, TTK organization. Employer acquired the regulatory license from IRDA in November 2013 and released its operations in February 2014.
Cigna TTK medical insurance is a stand-alone health insurance organization, founded in Mumbai having a pan India presence unfold throughout 15 towns of the united states of America.
Cigna business enterprise, a fortune 500 business enterprise is the primary US medical health insurance participant to set foot in the US. Cigna’s partnership with the TTK group is to herald innovative suite of medical insurance merchandise in conjunction with a more desirable customer support experience to the Indian marketplace.
ProHealth is a flagship medical insurance product from Cigna TTK. Further it has launched crucial Care and coincidence Care as part of its life-style protection Product Suite, for man or woman and circle of relatives. Cigna TTK delivered first- of- its kind, group medical health insurance product -Cigna Global Health Product (CGHP), presenting a global coverage for Indian personnel journeying across globe.

Cigna TTK’s assignment is to improve the health, nicely-being and experience of security of the human beings they serve. The organization will strongly leverage Cigna’s global health carrier information along side the trust, credibility and revel in of the TTK institution, to provide products and services solely designed for Indian market. To support this, the employer has extensively invested in modern-day technology, to present customers and vendors a very trouble-loose and personalized carrier experience. Cigna TTK’s service philosophy is to make purchaser experiences easy and reliable – in methods that they discover our services customized and empathetic.

ProActiv dwelling, Cigna TTK’s precise approach to the Indian marketplace gives assistance based on clinical, behavioral and way of life factors associated with chronic conditions, which includes some of services designed to assist customers better apprehend and manage their fitness.
Cigna TTK has been presented the “monetary instances nice Promising manufacturers 2015” and, is partnering the distinguished Marathons – Airtel Delhi 1/2 Marathon (ADHM) and Standard Chartered Mumbai Marathon (SCMM) because the legitimate health insurance partner. Cigna TTK holds 0.17% of market share in standalone health insurance industry.

Industry overview

What is Health insurance?
Health insurance means „an individual or institution buying health care coverage in advance through paying a rate called premium.? In its broader feel, medical health insurance is a agreement between the health insurance company and the insured person to cover the expenses that might get up from illness, unintentional accidents, surgeries and other scientific headaches incurred by means of people and households.
The insurance enterprise of India includes fifty three coverage companies of which 24 are in existence insurance business and 29 are non-lifestyles insurers. A few of the existence insurers, life insurance organisation (LIC) is the sole public area agency.
Out of 29 non-existence coverage agencies, there are six public sector insurers, which include two specialised insurers particularly Agriculture coverage business enterprise Ltd for Crop insurance and Export credit guarantee corporation of India for credit score coverage. Moreover, there are 5 private sector insurers are registered to underwrite guidelines solely in health, personal accident and travel insurance segments. They are Star Health and Allied Insurance Company Ltd, Apollo Munich Health Insurance Company Ltd, Max Bupa Health Insurance Company Ltd, Religare Health Insurance Company Ltd and Cigna TTK Health Insurance Company Ltd.
Insurance penetration of India i.e. Premium collected by way of Indian insurers is 3.4% of GDP in FY 2015-16 and is expected to increase in coming years

Health insurance in India: Medical insurance within the shape of healthcare financing (Mediclaim) became introduced in India in 1986-1987 by means of four subsidiaries of General insurance companies (GIC) to assist the ailing healthcare enterprise.

There was a liberalization of the Indian healthcare region to allow for a miles-wanted non-public insurance market to emerge. Due to liberalization and a developing center class with accelerated spending power, there was an growth within the number of insurance regulations issued within the country. In 2001 with entry of various private insurance businesses now the clients have desire of purchasing this insurance from diverse insurance agencies. The insurance Regulatory and development Authority (IRDA) removed tariffs on preferred coverage as of January 1, 2007, and this flow is predicted to force extra increase of private insurance merchandise.
The standalone medical insurance phase in India, which originated a decade ago while the coverage Regulatory and improvement Authority of India granted a license mlto the first standalone medical insurance corporation, has been the quickest growing section of the enterprise, recording a CAGR of 35% within the final 5 years.
There’s no question regarding the gains of health insurance policy, mainly due to India being low rank according to stats on the human life index. Thus it becomes extremely crucial to have an adequate health insurance policy that will work to get your medical costs covered ,the cost of treatments, the costs of laboratories, cost of hospitalisation and critical illness costs as well. “Health is wealth” a famous health quote suggested that it is utmost necessary to be prepared for such types of situations at any cost. Health insurance is an insurance policy which comprehensively covers not only coverage for hospitalization and related expenses but also gives benefit of covering for our pre as well as post hospitalization charges and also the ambulance costs.

Lets talk on now Types of Health Insurance Policies in India -In India there are various types of health insurance plans which are designed in such a way that they can provide coverage in any type of medical emergency. Some popular types of Health insurance policy are: Source – ICICI lombard
? Individual Health Insurance Plan – It is a policy which is specially designed to come up with a coverage to an single person/individual against various form of illnesses with cashless hospitalization and other add-on benefits.
? Family Floater Mediclaim Policy –Making use of this insurance policy can get you coverage for you as well as your family under a single insurance policy. This insurance policy will provide a fixed sum insured amount for the whole family. This will help you cover all your family members against diseases under a single cover. It can be used either by an individual member or as a sum total for treatment of one person.
? Surgery ; Critical Illness Policy – This policy is usually taken as a a standalone policy or a rider that would provide you coverage against fatal illnesses like- cancer, kidney failure, heart attack, paralysis etc. As you know the medical treatment of such diseases are very expensive so the premium is also charged on a higher scale.
? Preexisting Disease Cover – In India Many insurance companies also offer you coverage against the pre-existing diseases -e.g. – diabetes, hypertension, kidney failure, cancer etc. In short these policy includes diseases that existed in the policyholders body before buying the health insurance policy.
? Senior Citizen Health Plan – This plan is especially designed to protect person from health issues faced by individual DURING your old age. ACCORDING TO the IRDA norms, every insurance company must offer cover for people up to the age of 65 years.
? Preventative Healthcare – This insurance plan provides you preventive care treatments like regular checkups, consultation charges and other tests or x-ray fee concessions. The plan is made to keep a check on your health at regular intervals and provide you with all health care benefits.

Organisations Key Personnel

S No Name of Person Designation
1 Mr. Prasun Sikdar Managing Director ; CEO
2 Mr. Manoj Naik Chief Finance Officer
4 Mrs. Jyoti Punja Chief Customer Officer
5 Mr. Sameer Bhatnagar Legal, Secretarial ; Chief Compliance Officer
6 Ms. Arpita Naik Chief Risk Officer
7 Mr. Mahesh Darak Chief Investment Officer
8 Mr. Kashinath Palekar Chief Internal Auditor
9 Mrs. Reena Tyagi Head Human Resource
11 Mr. Nilanjan Roy Vice President – CGHB
12 Mr. Aniruddha Sen Head – Digital
13 Mr. Pankaj Ambastha Mumbai head
14 Mr Deepak Choudhary Agency Consultancy head
15 Mr Kamal Ahuja Business Consultant ; Trainer

Values at Cigna ttk
We offer more than a job. We offer something essential to your career development – the opportunity to grow in a company that recognizes respects and values individual contributions and differences. Cigna TTK will also strive to make a difference both to our customers and our communities.
Explore everything that makes Cigna TTK a special place to work. We offer a results-driven environment. We have a diverse and inclusive workforce. We demand integrity and respect in all we do.
Getting the Basics Right
Our work focuses on Cigna TTK mission – To improve the health, well-being, and sense of security of the people we serve.
All of our work at Cigna TTK aligns to what we value and how we win.
What We Value
? We care about people.
? We act with integrity.
? We embrace diversity.
? We demonstrate courage.
? We are committed to excellence.
How We Will Win
? We will engage and help our customers.
? We will make it easier for our customers.
? We will serve our communities.
? We will Innovate and grow – both our business and ourselves.
? We will win as a team…with pride.

Departmental introduction at Cigna ttk Health insurance
Health Insurance companies usually works at delivery of health insurance policy benefits to the customers and act upon any related customer issues. Health insurance is available on an individual or group (company or family coverage) basis. Various Services provided to the customers by health insurance companies include planning schedule of members including physician identifications and selection, family coverage, healthy living education and online account management, among other various forms of health-related assistance. Health insurance companies are also accountable to maintain good relationships with various network healthcare providers eg.physicians, clinics, hospitals, etc. Health insurance are usually also mentioned as “Healthcare Payers” because they reimburse the cost of healthcare services to providers.
Common Health Insurance job titles: Chief Executive Officer (CEO), Chief Operating Officer (COO), Chief Medical Officer (CMO)

• Health Plan Operations
The department of Health Plan Operations usually refers to a bucket of several essential administrative and support services for health plan members and providers. The Back office is accountable to manage variety of activities like claims processing, health plan member service/support (usually carried out within a Call Center), collection of payment amounts of premium , actuarial, underwriting and application processing. The back office staff members support the health insurance company’s customers, healthcare providers within the company’s provider network and internal employees.
Commonly known Health Plan Operations job titles: Operations Specialist/Analyst, Customer Service Representative, Insurance Service Representative

• Member Services
The Member Services department responsibility is the receiving and managing of all incoming calls and requests which comes from various policy holders and assist them with work of account updates, payments, insurance policy inquiries, account modifications, or status updates. Member service function also helps the policyholders in understanding the terms of policies and make them aware about every information, offers etc regarding companies policies .
Commonly known Member Services job titles: Member Services Representative, Customer Service Representative, Policyholder Services Specialist, Member Support Specialist

• New Business Processing
The New Business Processing department functions to get onboard new health insurance policyholders and customers. They work to gather the required data of new members ; carry forward that information to the required underwriting and application processing staff members (based on application type, language requirements and product knowledge) which work to assess the appropriate premium amount and coverage levels, then communicate options and premium/deductible structures to the prospective buyers of their policies.
Commonly known New Business Processing job titles: Medical Insurance Application Processor, Medical Underwriter, Application Analyst

• Application Processing
The function Application Processing works towards examining of health insurance applications received from potential customers, or policyholders, which is done to ensure that they are provided with the appropriate information which is required for underwriting and his approval or denial. Applications can be carried in through various channels available like the internet,mobile phone, health insurance agencies. Applications can also be received in variety of formats like paper, electronic mode, PDF etc. Application Processing employees must work diligently enough to make sure that applications are complete and accurate to reduce the number of customer touch points and make this process efficient (eg. lower underwriting cycle time, cost per decision).
Commonly known Application Processing job titles: Application Processor, New Business Representative

• Underwriting
The medical Underwriting department carries out the responsibility to assess the health insurance applicants and decide on their coverage. The medical data on applicant’s and other information submitted by the health insurance applicant is used to decide whether to offer or deny coverage and what the premium policy rate will be. Usually Health insurance underwriters measures the probable health risks against the potential costs of providing coverage. They usually make use of guiding information developed by the Actuarial team to make pricing and coverage decisions based on risks associated with the potential member’s health “profile” which includes -age, location, medical history, daily habits, etc.
Commonly known Underwriting job titles: Underwriter, Medical Underwriter, Underwriting Analyst, Underwriting Support Specialist

• Member Onboarding
The function of Member Onboarding department is to ensure that the newly approved health insurance policyholders are updated with all the required information to start using the benefits of their policy. They are send ID cards, educational ; useful materials, and data on in-network healthcare providers to new members. They also work to make sure that all of the required account information is in good order and stored properly in company systems for analysis and data retrieval.
Commonly known Member Onboarding job titles: Member Service Representative, Customer Service Representative, Customer Support Specialist

• Claims Processing
The Claims Processing department is entitled to examine and process health insurance claims, paper and/or electronic. They decide whether to return, deny or pay claims with respect of insured persons policy guidelines and determine steps necessary for adjudication. In addition to it, claims processing department compares claim applications and provider statements with the policy files and other required records to evaluate comprehensiveness and validity of claim.
Commonly known Claims Processing job titles: Medical Claims Processor, Medical Claims Auditor, Medical Claims Examiner

• Actuarial
The Actuarial function is entitled to perform complex mathematical modeling and statistical analysis which supports in decision-making with respect to the mitigation of risk related to health insurance premiums and benefits design. People working in Actuaries assess and assign risk to certain areas of health plan members based on medical history, demographic data, family history and various other factors.
Commonly known Actuarial job titles: Actuarial, Actuarial Data Scientist, Actuarial Analyst

• Sales ; Business Development
The department of Health Insurance Sales and Business Development work on their jobs of selling health insurance products to potential clients or members. Health insurance policies can be sold with help of multiple channels, through the cell phone, over the internet, through branch offices or through captive and/or independent health insurance agents or even brokers. Sales department works towards generating sales leads on health plan benefits, premium amount structures and in-network providers. Health insurance products include individual plans, family plans, group plans (for employers of offices etc) and government-sponsored options (medicare, medicaid) for different coverage types (health, dental, vision, pharmacy, etc.).
Commonly known Sales ; Business Development job titles: Insurance Agent, Insurance Broker, Sales Support Representative

• Network Development ; Management
The network development function works on assessing the markets and gathering a network of health care providers with the suitable care (primary care, specialists, academic, pharmacies, etc.) and product mixes (HMO, PPO, Medicare, etc.), to fit the demographics of their target market. Their job is to determine provider alignments and meet regulatory requirements for network adequacy. Accordingly, the network management function is responsible for the maintenance of the health plan’s contingent of healthcare professionals (physicians, care takers, pharmacies, etc.). The department works towards renewing and auditing the provider contracts, negotiate provider compensation levels and also to manage relationships with providers and educate them on support options offered by the healthcare payer (i.e., the health insurance company).
Common Network Development & Management job titles: Provider Relations Specialist, Provider Contracting Specialist

• Provider Contracting
Provider Contracting department is solely responsible to identify, audit and negotiate the contract details with healthcare providers (physicians, specialists, pharmacists, dentists, hospitals, clinics, etc.) that are suitable to join the health insurance company’s network. Healthcare service providers offer discounted rates to health insurance companies in return of a line of patients that are directed towards using their services. Contract details include the rates (i.e fees) at which the provider is charging the health insurance company for various types of services (based on claims codes), contract termination guidelines, and policies for any out-of-network care rendered by the provider.
Common Provider Contracting job titles: Provider Contracting Specialist, Provider Contract Analyst

• Provider Services
The Provider Services job is developing ; delivering services to in-network healthcare providers ie. The physicians, specialists, pharmacists, dentists, hospitals, clinics, etc, including the electronic claims payments/transfers, claims support, prior authorization submission and processing, educational resources and referral submissions.
Commonly known Provider Services job titles: Provider Support Specialist, Provider Service Representative

• Patient Education ; Wellness Programs
The Patient Education and Wellness Programs works to develops and implement various educational programs and other tools which aims to inculcate healthy habits within the companies insured members population. They also provide resources related to dieting, exercise, mental health and drug use – with aim to help the policyholders understand ways to improve and maintain their health. Few health insurance companies have even started to offer rewards programs that incentivize policyholders to maintain a healthy and active lifestyle. Patient Education groups may also develop and publish studies related to the efficacy of certain drugs and/or the effects of certain diseases/conditions.
Common Patient Education ; Wellness Programs job titles: Nutritionist, Member Relations Analyst, Research Scientist, Content Specialist

Literature review
M.akila(2013) concludes that India even though has a huge potential, penetration of health insurance is very low as compared to western countries especially. Mass marketing strategies like promotion of Group insurance, Micro insurance for BPL families will help big time in growth of health insurance industry in India. Even Health insurance agents should be better equipped in providing a satisfactory service and help more people to avail services of health insurance. TPAs and health care service providers should also act together to improve penetration

Dr Anand thakur ; Sushil kumar (2013) stated that marketers, which are an important element in the health insurance sector should be well aware of the hindrances in growth of health insurance and try to inculcate the societal philosophy of marketing along with adapting holistic vision as it will help a big time in brand building ; ensuring improvement of penetration of health insurance in the country. Motivating the sales force and broadening the horizon leading to better alignment of sales efforts. Appropriate network and contacts with reputed health care agencies and connect with Central as well as State government ; also with NGO’s would help in meeting the requirements of needy and ensure sustainable growth through such efforts in improving penetration in health insurance sector in India

Manish pandey & Smriti Priya through their project “Improving penetration of health insurance sector in India” mentioned that Health insurance is need of an hour is expected to grow tremendously in the coming years. With more and more lives at risk every year and increasing financial stress due to increase in healthcare & treatment expenditures penetration of health insurance sector needs to be improved. Even though variety of policies and exhaustive plans are available the scalability of business is less as compared to the expected growth. Improvement in infrastructure, macro-economic condition, increase in awareness of benefits of health insurance, better services and claim settlement process and increase in trust on insurance companies might lead to increasing penetration of health insurance sector in the country
As per Times of India(March 2010), stated that insurance penetration in India was 3.9% which was well below world average of 6.3%. Level of penetration depends on numerous factors like economic development of country, size of savings and also the scale and reach of health insurance sector. When compared with western countries India was comparatively under insures due to less penetration of health insurance industry.

Need for study
Some fitness information that alarm all our senses and compel us to contemplate over the idea of significance of Health insurance coverage are “India will come to be the diabetes capital of the arena”, “Indian citizens are greater prone to cancer”, “60% of the heart attack sufferers within the globe could be from India over following couple of years”. Searching into the gravity of the problem, one could imagine the fitness conditions popular in India. However, the rising medical charges remains an area of concern. In lots of cases, medical remedy bills are so high that most of the people cannot have the funds for them. Family contributors are left with the solution of both selling off household assets or borrowing cash from a person. Either of these decisions taken may be the reason of monetary pressure for a family. So it was of utmost importance to improve penetration of health insurance sector so that individuals and families are in a better position to take care of themselves and their well-being and avail good medical treatment without stressing much about cost of the treatment involved in availing medical service.

Objective of study
? To understand the current health insurance situation in India
? The objective of the study is to evaluate the opportunities and threats regarding health insurance penetration & growth in India
? Project and identify the areas or issues which need to be addressed while increasing penetration and
? Provide suggestions and recommendations to tackle the situation for the future

Problem statement
Inspite various economic developments and growth in various sectors of India, Health insurance sector still seemed very under-developed as compared to other sectors in the country. With less than 15% population covered under health insurance, there is an urgent need to increase the growth and penetration of health insurance sector in India. Out of total number of people hospitalized in India nearly 25% consisted of below poverty line people. Some people in order to take care of increasing healthcare expenses have to even sell their assets to avail any treatment.
With nearly 70% of population paying their healthcare expenses through their pocket, it becomes important for individuals to have a health cover to maintain their financial stability during medical emergencies and not be completely drained off in meeting medical expenses. With ever increasing medical expenses its necessary for health insurance industry to reach not only urban but rural sector too so that it would benefit health insurance companies as well as people to have some financial stability during medical emergencies creating a win-win situation for both the parties

Drawbacks of the system
With increasing competition in health insurance sector there are some drawbacks which needs to be solved by the health insurance companies namely
? TPA’S(Third party Administrators)
One of main problems faced by TPA’s are turnaround time(tat). The TAT for the payment of an insured patient’s treatment in an affiliated hospital is 20 days for cashless treatment. But Most TPAs do not meet their deadlines even when the health insurance company has paid to them. This is due to the logistics involved in handling numerous hospitals and claims. Few hospitals thus get dissatisfied with the lateness and resulting in them not offering cashless facilities. Also, some TPAs do not work on Saturdays, whereas most insurers do. This brings delay in processing of claims.

? Hospital charges
If you have got a good insurance cover, there are high chances that the empanelled hospital may charge you more. Higher tariffs for insured patients result in the next payout for the insurance corporations that, in turn, ends up in higher premiums. Another issue is that the misuse of insurance by hospitals and patients
? Customers
So Many people are hospitalised for illness that doesn’t need hospitalisation. Another issue is that they take a policy once a medical emergency has been diagnosed. insurance doesn’t cover pre-existing diseases. Also, patients don’t browse the policy document properly and expect all expenses to be reimbursed by the company

? Companies
To chase away pressure from their superiors and find incentives, salesmen mis-sell product. Sometimes, a wrong product is oversubscribed for the next commission. As company Websites and brochures don’t reveal all the terms of the plans, purchasers fall prey to the employee and don’t get the correct policy.

Research Methodology
Research design- This is an exploratory research to analyse and find the threats and opportunities with respect to health insurance penetration in India
Sources of data – Secondary data has been used like research publications, newspapers and few other informational sites from the internet

Process mapping -Issue of policy

Process mapping-Claim process

Health Insurance issues and challenges and way forward
In any country the health of the people is the top most priority ,a nation who have healthy people tend to grow more faster than the countries with people who are not so healthy .Healthcare will not only boost companies India’s development but also reduce poverty and mortality ratio today shows in the country the trend of country of the success depends upon the effort they put into to give and provide the citizens with a good Health Insurance. like India many other countries with low per capita income are suffering to pay the medical expenditure because of high price which is largely affecting the population. Even WH0 suggest that one treatment of medical expenditure in hospitalization good estimate upto 58% of per capita spending which would lead to 2. 2% drop of population in below poverty line. Even though insurance is essential it is not reached all parts of the country.
Financing Healthcare has become the important concern for any country or society. In various countries the government foods lot of money in the Healthcare funding unfortunately spending by India is very below power as compared to some other countries the total spending of health expenditure in India is just about 5% of GDP which is very less and only comes mostly from private sector.

Present Scenario
There are various government initiated health insurance products that have been used to provide cover undoubtedly, to a large section of population in India.
1. In India Health Insurance Schemes are run by the State owned Employees’ State Insurance Corporation up to a certain income level. Coverage is restricted as per the Scheme.
2. Central Government Health Insurance Scheme (CGHS) applicable to the Government of India employees at all levels including retired employees. The facility is available in selected cities/centres subject to certain limits, hence restrictive in coverage.
3. Health Insurance Schemes offered by the Public Sector General Insurance Companies, popularly known as “Mediclaim” Policies launched through the erstwhile General Insurance Corporation of India (GIC). A host of those available are as under:
Mediclaim introduced in 1986 – for individuals and groups.
Bhavishya Arogya’ introduced in 1990 – a retirement plan with early entry.
Jan Arogya’ introduced in 1996 – a low cost limited benefits plan.
Overseas Mediclaim’ Policy introduced in 1984 – for people traveling abroad.
Some special policies like Cancer Insurance, extended benefits of hospitalisation under Personal Accident Policies, extended benefits for people outside the scope of Workmen’s Compensation Policy etc.
4. Some State Governments have taken Health Insurance policies for weaker sections under various names on the pattern of Universal Health Insurance Scheme Launched by the Central Government, with limited liability upon specific critical illnesses. The Government has also launched Rastriya Swastha Bima Plan and Janshree Bima plans (peoples’ Health Insurances) to cover BPL families.
5. Consequent upon opening of Insurance Sector, the private Companies are also selling Health insurance policies specially designed and marketed with appropriate underwriting guidelines.
Incidentally, most of the products of General Insurance Companies – Public and Private, have undergone fine-tuning and upgrading following redesigning of the terms and conditions. The market has also seen quite a few Life Insurance Companies launch policies with health insurance add-ons that were introduced by LIC of India long back which is very popular in the market. All these have helped to develop and expand the market.

Low Health Insurance penetration in India
Health Insurance penetration less than 5%

To be realistic in country like India any type of insurance is assumed to be something which only high class people could afford. This is one of reason of current situation of Insurance penetration in India. Presently in India, Insurance penetration is 3.49% as compared to world average of 6.2%.

The rate of health insurance penetration is still at a very minimum stage in the existing ecosystem of health care services. There still exists a wide gap between the lifestyle of urban and the rural population. In the country while the urban population is learning and becoming aware about the importance health insurance has but the rural population still lacks the basic knowledge on healthcare services, its delivery and financing. Even, there are many inadequate domestic detrimentals of health such as sanitation, food security, water and other basic factors acting as an hindrance to the growth

India is considerably different in few aspects from most of the countries on account of its diverifications, across every existing parameters, whether you consider the age, socio-economic distribution in the country, literacy , financial knowhow, wellness, geographical spread or even growth rates across different parts of the country. This distinctness pose a great challenge for the insurance sector to make sure that the distribution mechanism systems are well in order to meet each and every customer needs. To be fair to them the health insurance industry are trying to leverae the new channels to widen their reach and bring down the cost of selling. Inspite of efforts the acceptance of health insurance in the country still remains low. Its essentialto increase consumers faith in the insurance industry, and their perception and understanding of the value of the product. This will only be possible with combined efforts from all stakeholders like- the regulator, the insurers, distributors, health care providers, third-party administrators (TPA) and even pharmacies. Health insurance is considered to be an important aspect in enabling a financially healthy secure future for any family. Nearly Over the decade the health insurance industry have undergone significant efforts to bring innovation specially in their products to bring a positive change in improving penetration. But still a significant proportion of our countries mass population still is uncovered by any health insurance cover. There is a massive need for the entire health insurance and health care system to come together and work on this on this challenge.
With reference to Mr H Ansari, a former IRDAI member and an Insurance expert Mr Arun Agarwal stated that current regulatory framework for insurance is the main culprit, they said that the framework was not sufficient enough to promote health insurance and its density in India.
In a recent report named “Transformation Agenda for Indian Insurance industry & its policy framework”, An 1% rise in penetration would lead to 13% reduction in uninsured losses, an increase in investment upto 2% of National gdp ; 22% reduction in contribution of tax payers. Even though India covers nearly 17-18% of worlds population, it accounts only for approximately 2% of world total amount of premium. Inspite of country experiencing growth in all sectors, India happens to be still under as well as inadequately insured leading to lower penetration of health insurance in the country

Some shocking facts of Health care scenario in India
• 31% and 47% of the hospital admissions in urban and rural India are either financed by loans or by sale of their assets
• 70% of Indians spend their entire income on healthcare
• 3.2% of Indians fall under poverty line owing to huge medical bills
• 40% patients borrow money for medical expenses or sell their assets
• 27 crore people in 64 districts across 13 states don’t have a single blood bank
• Only 7 doctors per 1000 people
• Out-of-pocket healthcare expenses in india are huge
• 30% od Indian face heart attacks before age of 40
• 25% heart disease related deaths (age 25-69 years)
• India has the largest numbers of diabetics in the world

Challenges faced-
Health insurance in the country can be still in a nascent stage, let’s understand few challenges to the growth of health insurance users in a developing economy.
• Customer mindset
It has been frequently observed that health policy holders are really unaware about the details and features of policy and thus ending up in buying policy that could have been avoided or would have taken which could be sjuitable to them. Traditionally Policies were mostly bought after a critical illness as occurred or hospitalization situation was being faced, without focusing much on to the monetary or the finer aspects of it. Seeing the constant rise in the medical care prices, it is very important that the policy holder truly understands the policy before buying one. Even, the health insurance company should keep communication process transparent and clear.

• Lack of innovation in service
There’s a probable chance of biasness when we talk about the health insurance sector. Long waiting periods, lower efficiency can be easily leveraged through efficient use of technology available. Making use of electronic medical records, mobile applications and other important changes can definitely bridge the gap and enhance the customer experience.

• Third party administrators (TAT)
The turnaround time for making the payment of patient’s treatment in an affiliated network hospital is close to 20 days for availing cashless treatment, Because of logistics being involved in management of huge number of hospitals and claims, Maximum health insurance companies have now begin the process of direct dealing with the insured which indirectly lowers the rate of congestion.

• Insurance company’s sales centric approach
For meeting the targets and get their lucrative bonus, salesmen often end up misguiding the customers and sell not so suitable policies which would meet customers needs. Thus People end up buying a wrong health insurance policy on basis of the judgment offered by the company sales executive or the representative. Insurance company’s policies and documents should be read carefully and even IRDA intervention in making the health insurance policy brochures more transparent will help in facilitating the process.

• Lack of focus on Women health
Women do form an important part in our society. But, unfortunately a large number of women’s population in the country still lack knowledge on the concept of health insurance and its importance. Lack of awareness with addition of existing hectic lifestyles, theres no motivation towards self-care, and dependency on family members have left them prone to get tangled in the vicious circle of deadly disease such as breast cancer, cervical cancer, maternity complications, cardiovascular disorders and more. As per the IRDA Insurance Awareness Survey Report, 2012, Diabetes, hypertension, stroke, polycystic ovarian, female sexual arousal disorder, cardiovascular and thyroid diseases are on the rise in women but there are merely 39% of total women who opt for the health policy. The scope and need for introduction of various schemes and bills pertaining to women health care remains on an all-time high.

Potentiality of the market
India’s population is about 1.2 billion and not all would be sure about awareness and its importance. Thus most of population being uninured were required to be made insurable, it makes a strong case for a potentiality of at least 50 crore plus people to be under some health insurance schemes other than from any Government sponsored schemes for the weaker sections.
Even though after opening of market the penetration has been poor and roughly only about 3.5 crore people are covered under various schemes as mentioned above, making the market quite big, only being scratched at the surface without being properly tapped. However, since last 2,3 years Health Insurance has picked up with aggressive selling coupled with awareness making it the second largest portfolio after Auto Insurance. Talking in absolute terms the premium amount in INR 13880.74 crores in 2018-19, from 6027 crores in 2016-17 up from INR 761 crores in 2002-03 thus showing a huge growth over a decade. It is important to note here that growth in health portfolio is limited to some key players stealing the show with their good marketing strategy while others are not so serious. Also Competition from new entries into the standalone health sector, as well as private health insurance segments will also be key. The standalone health insurance market is expected to grow in India at an annual compounded annual growth rate of nearly 30 % an accelerated growth scenario for the next five years. A consulting firm Fintelekt, predicted the size of the market will increase from Rs 5859.7 crore in FY16-17 to Rs 21,904 crore by FY21-22.

With Rising medical treatment inflation it is expected that it will lead to an increase in demand for health insurance, and even provide a good chance to target higher cover policies in terms of the sum assured for health insurance companies. The reasons known for low health insurance coverage in India are basically lack of awareness and lack of affordability. Even with rising disposable incomes, and greater awareness derived from an increasing focus by the government on social sector insurance schemes, the demand for health insurance is expected to increase in the coming yearsThe government has taken steps to ensure coverage of those below the poverty line in the health insurance schemes. These include the Rashtriya Swasthya Bima Yojana (RSBY), the Rs 30 premium health insurance scheme as well as thePradhan Mantri Suraksha Bima Yojana (PMSBY) which is a personal accident policy with annual premium of Rs 12.It is expected that the large coverage of social sector schemes is likely to boost penetration as well as create greater awareness among the uninsured populations about the benefits of health insurance. For health insurance companies indulging in rural and social sector schemes, is likely to open doors to open uninsured sections of the Indian population. However, it said that the profitability for this sector may be an issue as premium rates are pre-determined and loss ratios have been reportedly high for some of the schemes.
Composition of present market share is as under as per 20017-8 results :

Shortcomings of products
The existing products lack versatility in absence of dynamic marketing strategy and approach. Moreover the products are having certain features that are hampering the progress not to mention the unaffordable premium level because of adverse claim experience. Let us take a look at the features as under.
Basically policies are indemnity based and reimbursement oriented as cash-less tie-ups with Hospitals is beset with some road-blocks.
• Maximum Sum Insured is determined with little or less flexibility.
• Treatment is restricted to hospitals/nursing homes with limited domiciliary hospitalization as per defined terms.
• Versatility of products is lacking with lot of exclusions and limitations.
• Pre-existing diseases are basically excluded, offered with some limitations.
• No major plan for preventive treatment or measures of wellness programme.
• Cost of treatment is prohibitive for average middle-class people as per their requirement and not affordable by the lower income group and far less by the weaker sections.
• No cover granted normally beyond 60 years of age by some Companies and selectively by some others with exclusions in coverage and high loading.
Important features of market
The health insurance schemes marketed by Insurance Companies face some other challenges worth-noting, for example:
• The limited Government funding of healthcare programmes.
• Lack of propagation of health insurance as a scheme of insurance among masses.
• Rising medical costs and imbalance in cost structure among service providers.
• Servicing through Third Party Administrators (TPAs) introduced with ‘cashless’ entry to hospitals meeting with limited success.
• Absence of Accreditation of providers and a rationalised cost structure.
• Adverse claims experience/high loss ratio.
• High moral hazard at various levels of service.
• Non-regulated market and no control through State machinery.

Customer expectation
The above shortcomings are driving the customers more demanding forcing the Companies to fine-tune their products. Changes made in products are mostly marginal and not an overhaul in their scope and coverage. However, some Companies have introduced a preventive model in their products. Broadly the Customer expectations are as follows :
• Flexible and wide-ranging products without too many restrictions.
• All pre-existing diseases to be covered.
• Domiciliary (non-hospitalisation) treatment to be paid for.
• Meeting all demands of society including catering to the poor.
• Premium should be affordable, renewals guaranteed and premium should not be loaded for claims experience.
• Nobody should be denied insurance cover irrespective of age of entry.
• Medical costs should be kept under control and excessive billing to be monitored.
• Preventive treatment for better health should be covered /rewarded as claim management.
• Easy access to healthcare facilities and treatment through providers.
In the face of this scenario the Stakeholders have a role to play. Government machinery, the Insurance Regulator and the Insurers have to play their part in driving a healthcare plan that is acceptable and at the same time affordable.
Role of the Regulator
Unlike other Regulatory bodies in most countries, India’s Insurance Sector is both a Regulator and a developer of the market to be called Insurance Regulatory and Development Authority (IRDA). As mentioned above, apart from promoting and developing the market overall including Health Insurance, the Regulator has some concerns that need to be addressed. The examples are :
• Creating a positive business environment for health insurance products are health insurance Companies.
• Clarifying the legislation and regulation of health insurance.
• Providing information to consumers on health insurance.
• Creating an environment for standardisation of data.
• Co-ordinating health insurance with Government machinery to broaden the base.
The Chairman, IRDA, has gone on record to confirm that the Authority is seized of the entire matter and shall implement some of the recommendations of various Committees formed by them earlier and also take up with the Government the issues that need their acceptance and support.
Future outlook
Health Insurance has to expand fully with the flexibility suggested and all the players, specially the Private Sector players, have to be totally involved in writing and developing the business with the seriousness it deserves. Personal lines insurance was expected to get a boost after the market was opened to competition, which has not happened.
The level of penetration is skin deep, so to say, and health insurance being an important segment of the Personal lines insurance and there being a vast potentiality of this segment growing exponentially, the new players will have to take a giant step. Dedicated health insures with undivided attention should also hold the sway. Government spending, primary healthcare facilities, has to go up which has started happening. Many State Governments have declared attractive health insurance benefit packages at very low rates for the people coupled with Central Government’s initiatives to launch schemes for BPL classes.
The void between those who are insured and those uninsured/uninsurable has to be filled by a funding scheme as in some countries, to make health insurance an umbrella cover over the entire population. Over a period, however, health maintenance concepts, life style changes and wellness programmes should gain importance in managing health. Health education and disease prevention programmes should be propagated to balance large spending and pave the way for a managed healthcare environment slowly but surely.

Features of Health Insurance Policy
A good comprehensive health insurance policy has various features. Its basic features are-
• Cashless facility – Its normal that every health insurance company has selected few hospitals under its network. The benefit of having these network hospital is that if you get admitted to any of this network hospitals then you do not have to pay expenses out from your pocket. The insurer/health insurance company will on its own take care of it. You just have to inform company about your policy number and the remaining procedures will be handled by insurer and hospital.
• Pre and Post Hospitalization – One of the most appreciated feature of policy that it provide coverage on both pre and post hospitalization charges for a period of 30 to 60 days according on the insurance plan purchased by the insured.
• Ambulance charges – By getting this add- on feature you don’t have to stress much about the transportation charges of reaching the hospital on time. It will be taken care directly by the insurer.
• No Claim Bonus – Another good add-on benefit which you can avail for every claimless year. It can be used by person in any form, either an increment in the sum assured or a discount in premium.
• Medical Check- Up – Free medical check up is provided to you by few insurance companies.
• Tax Benefits – As per the Indian taxation system if you are paying a premium amount then you are liable to get tax refund under section 80D of Income Tax Act for a maximum value of Rs.25000 for Indians in the age group of 18 to 50 years and Rs.50000 for senior citizens.
• Co-Payment – In this feature, you can lower the premium amount. Few Medical insurance offers you a co-payment option in which there is a pre-defined amount of unpaid deductibles written in the policy which is to be paid by the policyholder. So in case of a any treatment, some amount is paid by the insured and rest is taken care by the insurance company.
• Restoration facility – Most of the health insurance companies these days offer you the ‘restoration benefit’. It is a automatic ‘magical backup’ to recharge your exhausted sum insured. In case if your entire insurance cover is exhausted, it gets restored automatically for the next hospitalization that occurs within the policy year.

Increasing opportunities of growth in Health insurance sector in India
Even though penetration in India of health insurance sector is comparatively low, Health insurance is considered to be one of the fastest growing industry in India but the insurance amount is not adequate due to lack of awareness about the adequate amount of sum insured, being overly dependent on corporate health insurance coverage, willingness to pay a low premium that is only up to the highest limit of rebate under Section 80D of the Income Tax Act etc. India’s healthcare industry has been expanding rapidly driven by a number of factors such as increase in average life expectancy and average income level of citizens and rising awareness for health insurance. The Indian healthcare industry, which comprises of hospitals, medicines, infrastructure, and medical devices, outsourcing telemedicine, health insurance and medical equipment is expected to reach US $120 billion by 2018 from the current US $100 billion, growing at around 20 percent year of year as per rating agency Fitch.

Medical Health industry has been one of the fastest growing segments in the insurance industry. However, despite its growth, the penetration of health insurance still continues to be low in the country, displaying a large group of the population exposed to huge out-of-pocket medical expenditure. With ever increasing medical costs, there is need for a wider penetration of health insurance. In a country with a population of nearly 1.25 billion people, private health insurance penetration is still only approximately 5 per cent. This provides a huge opportunity for health insurance companies. Moreover, in India the share of out-of-pocket expenditure in overall healthcare expenditure is significantly lot higher than comparable developing countries as well as the developed countries. Our government healthcare spending is more focused on low income and below the poverty line (BPL) segments.

LIFESTYLE DISEASES:

In India over the last decade there’s an increasing trend in lifestyle and communicable diseases such as diabetes at comparatively very young age and also increase in people suffering from hypertension. However, mere 15 percent of the country’s population are being covered from any form of health insurance, thus making out-of-pocket healthcare expenditure in India among one of the highest in the world. Thus, considering an increase in medical cost inflation and changing disease pattern more towards lifestyle diseases in the urban areas, the need for health insurance will continue to increase. A recent study (Cigna 360 Well-being report, focusses on monitoring and tracking motivations, perceptions and attitudes towards overall ‘well-being’ amongst consumers in across 11 countries including India) revealed that, majority of Indians in the last year (65 per cent) paid for their medical expense out of their own pocket and in future, they will continue to pay for the expense themselves. Furthermore, during retirement, only about 1 in 4 (26 per cent) claimed they will be covered by private insurance.

UNDERINSURANCE:

The underinsurance percentage of people between 61-65 years is 75%. One of the main reasons for this alarming underinsurance statistics is that policyholders do not upgrade their sum insured on the basis of their increasing age, changing needs and medical inflation. Approximately more than 50% of health insurance policyholders in India are underinsured finds a study by Apollo Munich. What this portrays is that people have bought a low sum insured health insurance policies, which is not very adequate to take care of all their medical expense emergencies. On the one side India faces a challenge of lack of health insurance penetration; on the other side those who have health insurance are underinsured. People must really understand that health insurance is not just a tax saving tool, and therefore be careful while selecting a suitable sum insured for themselves and their family. The standalone health insurer studied around 7 lakh policyholders spread across 82 cities in India, and has found that both men and women across metros, tier 1 and 2 cities and towns are underinsured. At 52% men are more underinsured than women at 46%. Also, underinsurance is more prevalent in higher age brackets as 62% of policyholders above 45 years of age. The slight respite to this grave problem is that young people seem to be choosing the right sum insured comparatively, since at 38% people between 18-35 years are the least underinsured segment amongst all other age groups. The maximum number of underinsured people 59% is in South while North, West, East and Central parts of the country is 49%, 49%, 48% and 45% respectively.

TOP UP HEALTH INSURANCE PLANS:

Top-up health insurance plans provide an extra health care financing protection to you in the one of most economical way, specially, when employees have an employer-provided base health insurance cover or needs to increase his cover at minimal price. They can easily top up their current health insurance policy, by either contacting an agent or reviewing various top-up options on the websites available. An individual should appropriately look for a top-up policy which provides with an option to convert to a full-fledged health insurance plan close to the retirement. For an individual to buy a top-up plan, one needs to fill up an online application form. Most insurance companies do not ask for a medical examination while purchasing a top-up plan of up to Rs. 5 lakh, unless there is a medical adversity listed in the application form. In cases where there is a medical check-up required, the insurance company bears the cost for the same, once the application is accepted. A loading on premium amount or exclusion may be levied because of adverse results of a medical check-up. Top-up plans are often underrated plans and their importance is clear when an insured leave a job and the new employer does not offer a similar policy or offers a reduced cover. The policyholder can certainly claim a tax rebate for your top-up plan as per the Income Tax Act, Section 80D.

MAKING HEALTH INSURANCE UNIVERSAL:

Population of people covered under a health insurance has touched 36 crore which is mostly under government schemes. The primary aim of the government is to make medical services universal and accessible to the whole population. The private health and insurance industry have to come together in creating additional facilities for treatment of patients, such as leveraging number of idle beds in private hospitals. A study done by the World Bank (2001) stated that at least 24% of all people hospitalized in India in a single year slipped below the poverty line because they were hospitalized. The bitter truth, and biggest motivation to elevate base-level health insurance, is that a large population of individuals in our country borrow money or sell assets to pay bills of their hospitalization expenses/medical treatment. So There is a intense need to incentivise people who are not inclined to buy health insurance in form of free check-ups or discounts as part of efforts to deepen market penetration in this particular segment. The spending on healthcare is seen as a superior good and only taken by people who are risk-taking, so it is required to incentivise those who don’t buy health insurance. For the people who are risk averse, it is important to incentivize them by offering some value to them like free health check-ups or discounts, which will help in realising the goal to make health insurance universal. It is a socio-economic challenge in India that health insurance is not accessible to all and it lacks sustainability as well. Health insurance sector can only grow, if it is commercially viable for all stakeholders.

DIGIITIZATION IN HEALTH INSURANCE:

The digitization and IT are changing the landscape of healthcare and health insurance ecosystem in the country. This will enable seamless interoperability of data that will facilitate patient safety and lead to better patient outcomes. With the health insurance sector poised for major growth in the coming decade, demand for more efficient systems of data storage and transfer is set to increase. Aadhaar is the biggest disruptor as well as enabler in digital society today and health insurance sector is one of the biggest beneficiaries. Integrating Aadhaar with health insurance enrolment, beneficiary identification, claim processing, hospital reimbursement, E-KYC will ensure a paperless, cashless, interoperable, secure, healthcare ecosystem in the country, and ultimately help in the growth in the health insurance sector. The Unique Identification (UID) of stakeholders within healthcare ecosystem such as providers, diagnostic centres and doctors will play a critical role in the growth of digitisation of health insurance in India. Digitisation presents many opportunities for health insurers. For instance, it helps in expanding reach, improves market share, and helps in providing additional value to customers. In India, insurers have taken steps to incorporate digitisation into their business models, but adoption has been sluggish due to many challenges in the path.

GROWTH DRIVERS:

The retail sub-segment is expected to grow at a robust pace driven by increased penetration in Tier-II and Tier-III cities, substitution of out-of-pocket expenditure by health insurance spends, increasing urbanisation, demographic shifts and medical inflation. With increase in the maturity of the market, this segment is expected to see innovative products being offered by insurers like wellness management, managed healthcare etc. This coupled with the government and the insurance industries’ thrust towards awareness, increased penetration and preventive care, this segment is to grow at a robust pace. Insurers need to offer the right product, quick service at the right price and deliver what is unexpected. Due to rising medical treatment costs, it is very unlikely that the premium rates will come down. Insurance products provide coverage for medical treatment cost. Hence, in general, in most markets, the premium increase trend follows the medical cost increase trend of the market. Medical cost inflation generally is slightly higher than the consumer price index inflation in most countries. For India too, a similar trend is likely to continue which will lead to insurance premium cost increase at a similar level. The move to sell insurance through ecommerce platforms is a welcoming initiative by IRDA which will open up new avenues and growth opportunities.

Health insurance is an important component of the healthcare delivery ecosystem wherein digitisation becomes mandatory for enhancing the overall patient care and experience. At present only one-fifth of the population is covered with some form of health insurance. This suggests that huge potential for growth is available for the healthcare insurance industry. Digitisation presents many opportunities for health insurers. For instance, it helps in expanding reach, improves market share, and helps in providing additional value to customers. Most of the digital initiatives across health insurance market are being undertaken across sales and marketing and policy administration as it requires low degree of support from stakeholders across the value chain. For example, in online sale of policies, other stakeholders like providers, doctors and TPAs have minimal involvement. However, cross stakeholder collaboration would be critical in most of the other initiatives to drive digitisation across health insurance. Effort should be to draw out a realistic phase-wise approach wherein all stakeholders could collaborate to counter the challenges faced and implement innovative technologies to create a strong digital healthcare ecosystem for India. Health Insurance has been witnessing a rapid expansion and has significant growth potential for the future as well. While multiple factors drive this growth, innovation in health insurance products would be a significant factor.

Country’s growth potential; affected by low health care expenditure on part of government .
India unfortunately has the world’s largest population of stunted children–short for their age–and the country’s failing primary medical healthcare and burdened tertiary care are not well equipped to manage the crisis of childhood malnutrition, leaving India unable to reach its desired national potential. This was the shortcoming against which Finance Minister Arun Jaitley presented his government’s last full budget before the general elections in 2019. Although India’s stunting rate has reduced approximately by 10 percentage points in a decade or so–from 48% in 2005-06 to 38.4% in 2015-16, a estimate of nearly 48 million Indian children were still stunted. At such times of downward moving economic growth and jobs, these children could face a great disadvantage over those children in other emerging and growing nations with lower malnutrition and better healthcare facilities. In further addition to it, Inadequate public healthcare and healthcare expenses drag an addition of 39 million people further back into poverty in India every year, this 2011 Lancet paper said.

“Until the federal government in India takes health as seriously as many other nations do, India will not fulfil either its national or global potential,” said a November 2017 editorial published in the Lancet, a medical journal.

India spends merely 1.4% of GDP on health, less than even Nepal, Sri Lanka.
The Central Government’s allocation for health grew upto 24% to Rs 47,353 crore in 2017-18–from Rs 38,343 crore in 2016-17. This is 1.15% of India’s gross domestic product (GDP). Including the expenditure by states, India spends 1.4% of its GDP on health.
Nepal spends 2.3% of its GDP on health while Sri Lanka spends 2%, data show.

The National Health Policy (NHP) predicted an increase in health expenditure to 2.5% of India’s GDP by 2025. Without considerable increase in its healthcare budget, India’s health targets–reducing its infant mortality rate from 41 deaths per 1,000 live births in 2015-16 to 28 by 2019 and maternal mortality ratio from 167 deaths per 100,000 births in 2013-14 to 100 by 2018-2020, and eliminating tuberculosis by 2025–seem difficult to achieve.

Close to 70% of country are not covered by any health insurance–Indians are considered the sixth biggest out-of-pocket health spenders in the low-middle income group of 50 nations, as India Spend reported in May 2017. Nearly 52.5 million Indians were drowning to poverty due to rising health costs in 2011-2018. India’s 48 mn stunted will result them in growing up being less healthy and less productive. India has the highest population of children stunted (low height for age) due to malnutrition, at 48.2 million. “Stunting is a proxy for overall cognitive and physical underdevelopment,” according to a September 2017 report published by the Bill and Melinda Gates Foundation. “Stunted children will be less healthy and productive for the rest of their lives, and countries with high rates of stunting will be less prosperous.”

Source: Global Nutrition Report 2015

“Adults who were stunted at age two completed nearly one year less school than non-stunted individuals”, according to this study conducted by University of Atlanta in 2010. Similarly, a study of Guatemalan adults found that those stunted as children had less schooling, lower test performances, lower household per capita expenditure and a greater likelihood of being poor. For women, stunting in early life was associated with a lower age at first birth and more pregnancies and children, according to this 2008 World Bank study.
A 1% loss in adult height due to childhood stunting is associated with a 1.4% loss in economic productivity, according to World Bank estimates. Stunted children earn 20% less as adults compared to non-stunted individuals. “It is my suggestion to the government of India to work with us on stunting,” Jim Yong Kim, president of World Bank, said on his visit to New Delhi in June 2016. “This is the bottom line: if you walk into the future economy with 40% of your workforce having been stunted as children, you are simply not going to be able to compete.”

In 2017, at least 316 infants died in India’s district hospitals

Unfortunately Infant deaths in an Indian government district hospitals was viral on every news channel headlines in 2017. Nearly 16 infants died in major four states last year. India’s continuous inefficient failing healthcare system asks various questions against children’s survival rate. Government and state run groups and primary health care centres are non functional, while tertiary and posh health care institutes, both private and government based are overly burdened and highly mismanaged.

Government primary healthcare failing, tertiary health care centres being overburdened
In 2018, health care sub-centres founded to be 20% down on human resources, while primary and community medical care centres recorded 22% and 30% short, According to Rural Health Statistics (RHS). Maximum of existing rural health care facilities in the country do not have a basic infrastructure. Atleast 29% of the existing sub-centres were without any regular water supply, 26% lacked regular electricity supply and 11% did not have efficient roads which could lead them to the place of treatment, according to the 2016 RHS data.Primary health centres (PHCs) are supposed to be the first point of contact between the village and a medical officer. Each PHC is manned by a medical officer and 14 paramedical staff, and is supposed to be equipped with an operation theatre, six beds, essential laboratory facilities and a pharmacy.

While 63% of primary health care centres lacked an operation theatre and 29% lacked a good labour room, the community medical centres were short of 81.5% specialists–surgeon, gynecologists and pediatricians.”1.5 lakh Health Sub Centres will be transformed into Health and Wellness Centres,” Jaitley said in his budget speech last year, he didn’t dwell on how the change in the name will improve health services or quality in the sub-centres.In 2014, 58% Indians in rural areas and 68% in urban areas said they use private facilities for inpatient care, according to the 71st round of the National Sample Survey on health, indicating the declining confidence in India’s public health system.In 2013, India launched the National Health Mission (NHM)–the country’s largest public health programme–to achieve universal access to healthcare by strengthening health systems, institutes and capabilities.

National Health Mission includes National Rural Health Mission and National Urban Health Mission that work for strengthening rural and urban health system, maternal and child health and communicable and noncommunicable diseases The allocation to NHM declined from 57% of the health budget in 2016-17 to 56% in 2017-18–despite an absolute increase from Rs 22,197 crore to Rs 26,690 crore. Only 68% of the funds demanded by states under NHM were approved by the Centre in 2015-16–the year for which latest actual expenditure estimates were available–according to a 2017 analysis by Accountability Initiative, an Delhi-based public policy research institute. This is excluding the northeast and union territories.Yet, the beneficiaries of Janani Suraksha Yojana–safe motherhood intervention–were low in many states with the high infant mortality rates.

For instance, in 2015-16, only 61% of mothers in Madhya Pradesh, 54% in Bihar and 66% in Assam had benefited from the JSY programme under NHM, according to Accountability Initiative. Assam, Bihar and Madhya Pradesh had the third, fourth and fifth highest infant mortalities in 2015-16.With inadequate and ill-equipped primary and secondary care, many Indians turn to the overburdened tertiary care centres, often as the last resort.

The budget for Pradhan Mantri Swasthya Suraksha Yojana–the Prime Minister’s Health Protection Scheme–increased 103% from Rs 1,953 crore in 2016-17 to Rs 3,975 crore in 2017-18.The scheme aims to reduce regional inequalities by increasing access to tertiary care facilities by upgrading district hospitals and setting up new All India Institutes of Medical Sciences. The 2017-18 budget also saw a 155% rise in the allocation for establishing new medical colleges–from Rs 1,293 crore in 2016-17 to Rs 3,300 crore.While this is in line with the 2015 recommendations of the standing committee on functioning of AIIMS, the committee also noted the tertiary care institutes are facing “mammoth patient load” because they are catering to primary and secondary health needs of patients because of poor primary care.

Between 2016-2018, every three in five deaths were from lifestyle diseases

Non-communicable diseases (NCDs)–such as cardiovascular diseases, hypertension, chronic obstructive pulmonary disorder–were responsible for 61.8% of deaths in India in 2016, up from 37.9% deaths in 1990, as IndiaSpend reported in November 2017. While the allocation for non-communicable diseases increased 72% from Rs 555 crore to Rs 955 crore, only 57% of funds demanded by states were approved by the Centre, according to Accountability initiative. “India has a NRHM national rural health mission hangover,” said Subhojit Dey, part of the Global Burden of Disease project, and co-chairman of the Cancer Interest Group at Delhi’s Public Health Foundation of India, an advocacy. “Maternal and child health and communicable diseases have been India’s priority until now,” he told IndiaSpend in September 2017.
Public health infrastructure should be reconfigured to tackle non-communicable diseases, Srinath Reddy, public health expert told IndiaSpend in an interview in January, 2018: “From the perspective of chronic disease management and risk reduction; from providing sporadic care for infectious diseases, continuous care has to be infused in the health system, especially at the primary and secondary level because tertiary care can be still about acute care.”
Mental health still largely ignored
Allocation to the National Programme for Mental Health has been stagnant for the past three years. At Rs 35 crore, the programme received 0.07% of India’s 2017-18 health budget.This is despite the fact that an estimated 10-20 million Indians (1-2% of the population) suffer from severe mental disorders such as schizophrenia and bipolar disorder, and nearly 50 million (5% of population)–almost equal to the population of South Africa–suffer from common mental disorders such as depression and anxiety, as IndiaSpend reported in September 2016.Despite 15 suicides every hour and 133,623 suicides in 2015, India is short of 66,200 psychiatrists and 269,750 psychiatrist nurses.
Budget 2018- A massive boost for health insurance industry

The insurance sector especially the health insurance sector has welcomed the 2018 budget as it showed signs of acting as a catalyst in increasing penetration of health insurance sector in India
Budget 2018 especially focused on health and safety for poor classes of Indian society. Extending the already existing government schemes like Pradhan Mantri Jeevan Bima Yojana (PMJJY) and Pradhan Mantri Suraksha Bima Yojana(PMSBY) is a great step to bring more people under the insurance coverage. “The announcement to provide poor people with micro insurance and pension schemes to Jan dhan yojana account is very positive,” New India assurance chairman G Shrinivasan said. In Budget our finance minister Arun Jaitley said that indian Government will be launching a flagship National Health protection scheme in order to include over 10 crore poor and highly vulnerable families of around 50 crore people with ai, to provide 5 lakh cover per family for secondary and tertiary hospitalisation. This meant that there would be a huge impact on the health insurance premiums for the government as this will involve spending Rs. 1.2 lakh crores as premiums.The finance minister also stated that the National Health protection scheme is a progressive move to include almost 40 % of population and move closer to go towards universal health insurance.

The proposal which was made to merge the three non-listed state-run and then get the merged entity listed would help in achieving economies of scale and meeting customer needs and help increasing low penetration of insurance which is just 3%. According to SBI general Managing director the proposal to merge 3 Psu general insurers and getting them listed will result in better efficiencies of operations, adopting of suitable risk-based pricing model and ensure sustainability in growth thus benefit customer too in longer period. The 3 entities are United India insurance, New India assurance and Oriental insurance. This move would also attract foreign investors and impact of merger and listing them would soon be reflected. India is also willing to spend about Rs 16,717 crores in initial 2 years on given free health insurance programme that will work to offer insurance cover for 10 crore poor and needy families. Prime Minister Narendra Modi’s National Health Protection Scheme aims to comfort the poor people from the increasing medical care costs as insurance penetration is very low at just 3.49% in India against 6.28 % globally. In India about 60-70% percent of the health care expenses are paid out of pocket by the people, according to World Bank data. That, according to government’s think-tank NITI Aayog, pushes nearly 70 million people into poverty each year in a country that spends 1.4 percent of its GDP on healthcare—the lowest among BRICS peers and also below the global average of 5.9 percent. About 43.8 crore people were covered under various health insurance schemes in the country as of March 2017, according to a report by global ratings agency Crisil. That included 33.5 crore under various government-sponsored schemes including the Rashtriya Swasthya Bima Yojana. With these new scheme, the coverage of Health insurance will be expected to increase to more than 65 crore people.

Taxation related benefits and reforms introduced in Budget 2018
Healthcare costs constitute a significant part of an individual’s domiciliary budgets entailing medical treatments of self and dependants, preventive check-ups, payment of health insurance premium, etc. Amidst the rising inflation, healthcare costs in India are also in upswing. Nonetheless, the Government of India provides certain ‘healthcare cost benefits’ to every individual taxpayer by way of income-tax deductions from an individual’s taxable income for a particular tax year.
This article primarily seeks to encapsulate the associated tax benefits available to an individual in relation to the healthcare costs under various scenarios as per the provisions of the Income-Tax Act, 1961 (ITA) along with amendments introduced by the Finance Act, 2018:
(A) Medical expenditure incurred by the employer for the employee:
As per the provisions of the ITA, the following facilities provided by the employer are treated as “tax-free” perquisites in the hands of employee:
# The value of any medical treatment provided to an employee or any member of the family in any hospital maintained by the employer;
# Medical reimbursement provided by an employer to an employee for medical treatment of self or family members in any hospital maintained by the Government or local authority or in a hospital approved by the Government for treatment of its employees;
# Medical reimbursement provided by an employer to an employee for medical treatment of self or any member of the family against certain diseases/ ailments as prescribed under the Income-tax Rules, 1962 (such as cancer, tuberculosis, etc.);
# Any portion of the insurance premium paid by the employer for insurance and health of the employee under a scheme approved by the Central Government (CG) or Insurance Regulatory and Development Authority (IRDA); and
# Any reimbursement by the employer of any insurance premium paid by the employee, for a health insurance for self or any member of the family under a scheme approved by the CG or IRDA.
(B) Health insurance premium and medical expenditure (Section 80D) paid by an individual:
Health insurance premiums paid by an individual covering self, spouse, parents and dependent children are allowed as a deduction from the total taxable income of such individual under Section 80D of the ITA. However, the said deduction is restricted to the following, during the tax year 2018/19

SI.No. Particulars Taxpayer and parents are not senior citizen Only Parents are senior citizens Taxpayer and Parents (all are senior citizens)
1. Health insurance premium paid to any scheme approved by CG or IRDA by the taxpayer (INR 5,000* for preventive health check-up in included) • Deduction of INR 25,000 allowed for taxpayer; and / or
• Deduction of INR 25,000 allowed for one or both parents, in aggregate • Deduction of INR 25,000 allowed for taxpayer; and/ or
• Deduction of INR 50,000 allowed for one or both parents, in aggregate • Deduction of INR 50,000 allowed for taxpayer; and /or
• Deduction of INR 50,000 allowed for one or both parents, in aggregate
2. Medical expenditure/ costs incurred for senior citizens (no health insurance is in effect for such person) • Not applicable/ no deduction available • Deduction of INR 50,000 allowed for parents, in aggregate • Same as above
(C) Expenditure incurred on medical treatment of disabled dependent (Section 80DD read with Rule 11A):
Where an individual is a tax resident of India for tax year 2018/19, incurs expenditure on medical treatment (including nursing), training and rehabilitation of a disabled dependant (or) paid any amount under an approved insurance scheme for the maintenance of a disabled dependant (subject to conditions prescribed), then such individual is allowed to claim a fixed deduction of Rs 75,000 from his total taxable income under Section 80DD of the ITA. However, in case the dependent is a person with severe disability (i.e. such person has 80 per cent or more of one or more disabilities as prescribed), then the amount of fixed deduction would be Rs 125,000. In case of an individual, a dependant could be spouse, children, parents, brothers or sisters.
The individual claiming deduction under this Section shall obtain a copy of the certificate issued by the medical authority in the prescribed form (Form 10-IA) and manner, in respect of the tax year for which the deduction is claimed.
The term ‘disability’ shall have the meaning assigned to it in Section 2(I) of the Persons with Disabilities (Equal Opportunities, Protection of Rights and Full Participation) Act, 1995 and includes ‘autism’, ‘cerebral palsy’ and ‘multiple disability’ referred to in Section 2(a), (c) and (h) of the National Trust for Welfare of Persons with Autism, Cerebral Palsy, Mental Retardation and Multiple Disabilities Act, 1999.
(D) Expenditure incurred on treatment of certain specified illness (Section 80DDB read with Rule 11DD):
Medical expenditure incurred by an individual, being a tax resident of India, on medical treatment of certain specified diseases or ailments (as prescribed under Rule 11DD of the Income-tax Rules, 1962) of self or dependents are eligible to claim deduction up to Rs 40,000 for tax year 2018/19. However, in case the dependent is of the age of 60 years or more (senior citizen) then, the amount of deduction is available up to Rs 100,000. Dependants include spouse, children, parents or brothers or sisters, who are wholly or mainly dependant on such individual for support and maintenance.
It is pertinent to note that deduction under this Section is available after reducing the amount received from the insurer or any amount reimbursed by the employer. Further, in order to claim this deduction, the individual shall obtain a prescription for such medical treatment from a neurologist, an oncologist, a urologist, a haematologist, an immunologist or such other specialist, as may be prescribed.

(E) Deduction for persons with disability (Section 80U read with Rule 11A):
Where an individual being a tax resident of India is certified by the medical authority to be a person with disability (as referred above under Section 80DD of the ITA), then such individual would be allowed a fixed deduction of Rs 75,000 from his total taxable income. However, in case the individual is a person with severe disability, then the amount of aforesaid deduction would increase to Rs 125,000. Any individual claiming a deduction under this Section shall obtain a copy of the certificate issued by the medical authority in the form and manner, prescribed by the Income-tax authorities, in respect of the tax year for which the deduction is claimed. It is pertinent to note that Section 80DD of the ITA is available to an individual for maintenance of disabled dependant. However, deduction under Section 80U of the ITA is available only to an individual who is disabled.
Conclusion:
It is pertinent to note that the primary benefits pertaining to healthcare costs are now restricted to specified illnesses/ disabilities and the Finance Act 2018 has done away with the income-tax benefit available to a taxpayer pertaining to medical reimbursements (up to Rs 15,000 pa). In the ensuing tax year 2018/19, one may avail optimum benefits from the aforementioned deductions to attain maximum tax efficiency. Further, the Government of India has proposed introduction of heath care schemes, such as the ‘National Health Protection Scheme’ through the Budget 2018 to provide coverage to poor and vulnerable families for secondary and tertiary care hospitalization (this is claimed to be the world’s largest government funded health care programme).(The author National Leader Tax – Grant Thornton India LLP. With inputs from CA Sudeep Das)
Importance of ICR in selecting a health insurance
What is Incurred Claims Ratio (ICR)?
Incurred Claims Ratio is nothing but the total value of all claims paid by the health insurance company divided by the total amount of premium they collected in the same period. Incurred Claims Ratio indicates the company’s ability to pay the claims.
As an example a 60% incurred claims ratio means that for every Rs 1000 of premium earned in a given accounting period, Rs 600 is paid back in the form of benefits (claims). Incurred Claim ratio is the ratio of the claims settled to the premium received.
So, how to analyze the ICR data? Whether a Non-life Insurance company which has say ICR of 110% is better than a company which has incurred claims ratio of say 85%?? Let us now understand this point.
If ICR is greater than 100%, it means that the company has given more money away as claims than what it has collected as premium. This is not good for the company.
If ICR is less than 100% say in the range of 60% to 90%, it means that the health insurance company has given lesser amount as claims than what it has collected. It means that they are making profits.
If ICR is very low say less than 40%, it means that either the company is charging higher premium rates than its peers and making huge profits (or) it has a good pool of low-risk (may be youngsters) profile individuals as clients (or even both).
Hence it is better to be with an insurance company which has neither high nor low incurred claim ratio. I believe that the ideal ratio (percentage) range can be anywhere between 60% to 90%.
The main difference between Incurred Claims Ratio and Claim Settlement ratio is – Incurred Claim ratio is the ratio of the claims settled to the premium received. Claim Settlement Ratio (CSR) is the ratio of claims approved to total claims made (received). The higher the CSR the better. Same is not the case with ICR.
Latest Health Insurance Incurred Claims Ratio 2016-17

• The overall Incurred Claims Ratio of public sector insurer for Health insurance vertical is 120% in 2016-17. This clearly a not a good sign. May be, this is one of the reasons why PSU insurers have increased their premium rates significantly in the last couple of years.
• The overall Incurred Claims Ratio of private sector insurer for is 74% in 2016-17, which is almost same a in 2015-16.
• Whereas, the stand-alone health insurers have a low ICR of around 56%.
Let’s now look at insurer-wise latest health insurance incurred claims ratio 2016-17 details;

Below are the details of Stand-alone Health Insurers’ incurred claims ratio during 2016-17;
• The incurred claims ratio of all four public sector General Insurance companies was more than 100% in 2016-17 as well.
• The incurred claims ratio of the Private Sector non-life insurance companies (health insurance vertical) was 74% during 2016-17 which is same as that of he previous year figure.
• The incurred claims ratio of the stand-alone Health Insurance companies was 56% during 2016-17 which is lesser than the previous year ratio of 58%.
• You can notice that all of the Public sector non-life insurance companies like National Insurance, New India, Oriental & United have Incurred Claim Ratios of more than 100%.
• As far as Private General Insurance companies are concerned, the ones which have reasonable and are close to total average ICR (avg ICR of all Pvt companies is 74.59%) have been highlighted in GREEN. You may prefer buying health insurance policies from these companies.
• All the stand-alone ones or the specialized health insurance companies (except Aditya Birla) like Apollo Munich, Max Bupa, Religare & Star Health have good Incurred Claims Ratio which is around 60%. So, these can be preferred to other ones when buying a mediclaim or family floater health insurance plans.
Top 10 Best Health Insurance Companies based on Incurred Claims Ratio 2016-17
I have analyzed and short-listed the best non-life & stand-alone health insurance companies based on the latest Incurred Claims ratio data.
Actually, Claim Settlement Ratio can be a better indicator than ICR for shortlisting best health insurance companies. But IRDA does not publish CSR details for Health Insurance in its annual report. The CSR details are available in respective company websites.

What should you look at while picking the best health insurance company in the market?
Claim Settlement Ratio: The most important reason to buy a health insurance plan is to be assured that all, or most of the medical expenses incurred in case of a medical eventuality get paid by the plan. But what if the insurance company rejects our claim? An insurance company’s claim settlement ratio, or CSR, reflects the proportion of claims settled by it against the total claims raised. A higher ratio means that higher claims have been fulfilled by the company. This also increases the probability of your claims getting fulfilled, when the need arises.
After understanding CSR, you may want to know what a good ratio is. Generally, a health insurance claim settlement ratio exceeding 80% is considered good. However, it is vital that you do not use this ratio as the only factor to choose your insurer. It is recommended that you read online reviews and ask your friends and relatives about their experiences before you make the choice.
Importance of CSR –
You avail a health policy to ensure that you would not have to worry about money in case of a medical condition. The claim settlement ratio for health insurance companies offers a glimpse into the probability of a positive outcome in case you need to file a claim.
The CSR is beneficial to understand the willingness of the insurer to provide the funds when the need arises.
It helps in determining the reliability of the insurance company and the efficiency of settling claims.
Solvency Ratio: This is basically the proportion of assets to the proportion of liabilities. A higher ratio indicates that the insurance company has a higher proportion of asset holdings. This is great news for the customers, because in case of bulk claims, the company will have enough resources to pay off the claims of the customers.
Claim Settlement Procedures: At the time of getting a claim settled, it is very important that the insurance provider has simple procedures and options. The less are the claim formalities, the more time and effort is saved.
Turnaround Time for Claim Settlement: Settling medical claims can become a bit of a hassle if the insurance company takes a long time to pay off the bills. In such a scenario, the burden of meeting the hospital expenses can fall on your head. Needless to say, it can be a massive financial burden. So, it’s best to choose insurers that have a faster claim settlement process, which might also include in-house claim settlement.
Network Hospitals: Every health insurance company has a list of tied-up hospitals called Preferred Provider Network or PPN, where the facility of cashless claim settlement is possible. It becomes imperative to check the list of network hospitals to locate ones you prefer in your vicinity. Ideally, a good insurer should have an exhaustive list of hospitals in their network.
Business Volume: Business volume means the total number of policies sold by an insurance company and the premium collected. A company with a higher business volume is the one who is trusted by individuals and has a larger market share. This can also be a parameter while judging a health insurer because higher volumes mean greater trustworthiness.
Variety of Plans: It is only human to want more. That’s why we are not satisfied with our purchase unless we have gauged all possible options. Even in case of health insurance, companies often have a considerable range of plans catering to specific needs.
Insurance Intermediaries: Agents and brokers are the intermediaries who bring the insurance plans to us. While an agent represents only one company, a broker has the privilege of dealing with multiple insurers. As such, whenever you are confused about the company to get insured with, ask your broker for a bias-free and informed advice. Remember, your broker should be licensed as per the IRDA norms. At the end of the day, we want our hard-earned money to be invested in the best possible avenue. In case of health insurance, where having our claims met is an important criterion, we don’t want our money in the wrong hands, i.e. the wrong insurance company. With the above parameters, now you can easily pick the best from the rest in the market, and buy a health plan that suits your requirement.

Health insurance and risk management
It is widely believed thing that a health insurance is all about paying costs of hospitalisation. Also, that you buy an health cover because you are scared of any medical emergencies which may arise.
Yes, that is one genuine perspective to have. However, you can also flip the fact around if you were to consider the only real benefit that pure a health insurance offers
It gives the insured or his family a much needed financial security to get on with life even when emergency strikes in the form of an unforeseen medical expenditure which could have drained all their resources. It gives you a chance to continue with your routine without much effect on your financial stability. And again, when one buys life insurance, is it because one is fearful of death or is it to make you fearless of the ultimate uncertainty in life? Perhaps, a hedge against a predictably uncertain life!
Though no one guarantee a good medical condition in the long run ,in case of the bad medical condition of insured one, financial support in the form of health insurance can help the family recover from any form of setback which they may face .It works at providing hedge to you or your family in the case of medical emergency that can otherwise lead to not just sacrificing on your daily lifestyle but maybe even having to give up on your basic daily necessities.

1. Health insurance provides you with an efficient financial cover
A health insurance is a pure risk-cover policy and is one of most cost-effective financial instrument available to hedge against the risk of unforeseen medical emergencies. Such a policy offers a lump sum cover in case of medical mishap to the insured within the tenure of your health insurance policy and also helps you pay your pre as well as post hospitalisation expenses.
It helps in protecting you from financial liabilities like bank loans, childrens’ education and loss of your hard earned income.
2. Providing Large cover at low premiums
A large cover at low premiums is surely on our mind whenever we think of buying a health insurance. A health insurance provides you with that feature.
For example, a 30-year-old non-smoking male can opt for a cover of Rs 10 lakhs by just paying a reasonable premium of a little over Rs 5000-6000 annually, which comes around just Rs 16 as an expense per day.Amount of health cover required by one would naturally depend on his family’s lifestyle, his/her current liabilities and present/ future expenses which has to beared by that person

3.Helps Manage your liabilities
It is not rare to take on few liabilities while we are working.Most people choose to opt for a home, car, and even education loans that are usually paid over a period of time.At the time when anyone in the house falls sick or facies some illness it creates not only panic but one also feels burden of these ever rising medical costs liabilities and how to manage it . This usually becomes a huge task in hand in case of distress. A good health insurance policy with adequate cover helps the family members of insured to manage these liabilities smoothly. The cover received from the health insurance company can be easily used to pay off debts due to hospital bills in case of reimbursement or directly settlement of bill in case of cashless facility availed.

4. Protects your savings
A health insurance would help you manage your portfolio and protect with unwanted contingencies. Any medical emergency would prove to be an extra expense for you or your family. Having an adequate health insurance would help you by keeping your savings intact and not disturbing your portfolio. As the medical expenses will be taken care by the policy ,you will not require to withdraw money which you invested in banks, shares , bonds etc thus having no effect on your savings and continuing your financial stability. Thankfully, there are term plans that offer monthly income benefits along with a lump sum payout. There are policies that offer monthly income which increases by 10 per cent every year (for a period of 10 years) in addition to the lump sum payout.
Hence, it’s important to figure out a adequate cover for you and your family and protecting you and your family from financial stress and loss of regular savings and creating imbalances in your financial plans and their returns
5. Addition of cost effective riders

These Riders help in customisation of a health policy. The policy offers extra benefits that strengthen a health insurance plan.Critical illness, top up plan, accidental plan are few popular riders that can be used to enhance your plan.
Each rider offered to you has its own special benefit. However, just as purchasing a normal health insurance policy requires in-depth analysis, adding a rider to a policy requires comprehensive study and research regarding policy and its importance. The options are varied, and policyholders must make a smart move by understanding the benefits of each of the rider. A rider can be attached or dropped during the policy, subject to conditions.

6. Useful Option to increase your cover at important milestones of life
An important unquestionable tea of financial literacy is to constantly review one’s life cover requirement regularly. There are variety of health insurance policies available in the market, which offers you flexibility to increase the sum assured whenever in future as per your wish, at important milestones in life like persons marriage, childbirth, etc. without even getting into a fresh medical check-up.
7. Money tips
In insurance especially, you are guaranteeing your wish/option to increase your cover ahead, irrespective of health condition you may face in future. After opting for such an option, you need to update the health insurance company about the milestone events supporting it with the required proofs. A careful need analysis at the time of life stage change, helps in determining the coverage required at each stage of life.

8. Protection and security is foremost
It is universally known that for Indians especially, family comes first for them, particularly when it comes to financial savings and protection of their loved one’s
Take a second in your life ; try to imagine your and that family member’s life seeing them sick or hospitalised and you might get your answer.Get rid of this fear and stress and become fearless by approaching an health insurance company and buying an adequate policy of your choice. The range and options of term plans available have never been as good as they are today!

Data analysis

Ho: There is no statistically significant relationship between Increase in health insurance users, Medical inflation, Increase in disposable income and rise in claim amount settled
Ha: There is a statistically significant relationship between Increase in health insurance users, Medical inflation, Increase in disposable income and rise in claim amount settled
INCREASE IN NO OF HEALTH INSURANCE USERS (IN THOUSANDS) INCREASE IN MEDICAL INFLATION RATE RISE IN PERSONAL DISPOSABLE INCOME IN INDIA (INR MILLIONS) RISE IN AMOUNT OF CLAIM SETTLED BY HEALTH INSURANCE COMPANY (IN CRORES)
216231 12% 110000000 1016.0331
288032 14% 130000000 1336.6217
358962 15% 140000000 1769.75
437455 17% 155000000 2392.05
516706 20% 171000000 3229.2

Correlation results
INCREASE IN NO OF HEALTH INSURANCE USERS (IN THOUSANDS) 1
INCREASE IN MEDICAL INFLATION RATE 0.98860819 1
RISE IN PERSONAL DISPOSABLE INCOME IN INDIA (INR MILLIONS) 0.995634131 0.988425497 1
RISE IN AMOUNT OF CLAIM SETTLED BY HEALTH INSURANCE COMPANY (IN CRORES) 0.986935536 0.994273259 0.976841654 1

Findings & Interpretations

A correlation coefficient of +1 indicates a perfect positive correlation. As variable X increases, variable Y increases. As variable X decreases, variable Y decreases.
A correlation coefficient of -1 indicates a perfect negative correlation. As variable X increases, variable Z decreases. As variable X decreases, variable Z increases
Thus by seeing the table as above you can very well understand that every variable is positively correlated to each other. Increase in No of health insurance users show a strong correlation of 98% with Increase in medical inflation rate that means as medical inflation rises, so does the number of health insurance users
Similarly Rise in personal disposable income as well as Increase in amount of claims settled have shown a strong relationship of 99.5 & 98.69 % respectively, with Increase in no of health insurance users. Thus proving that all 3 factors have positive correlation with each other showing that Increase in Medical inflation, Disposable income & Claim amount settled have encouraged citizens to buy a medical insurance for themselves.
Even the 3 factors mentioned above are strongly related to each other ,so increase in one factor would lead to rise in other factors too. You can verify these conclusions by looking at the graph.

Interpreting the correlation value- The value of r is always between +1 and –1. To interpret its value, see which of the following values your correlation r is closest to:
• Exactly –1. A perfect downhill (negative) linear relationship
• –0.70. A strong downhill (negative) linear relationship
• –0.50. A moderate downhill (negative) relationship
• –0.30. A weak downhill (negative) linear relationship
• 0. No linear relationship
• +0.30. A weak uphill (positive) linear relationship
• +0.50. A moderate uphill (positive) relationship
• +0.70. A strong uphill (positive) linear relationship
• Exactly +1. A perfect uphill (positive) linear relationship

Future scope of Health Insurance sector in India
Observing the recent trend existing in the country the Indian health insurance industry is booming and turning to be one of the the most favoured investment hubs for many foreign players. India markets have opened for private players and increase in FDI limit has promoted coming together of National & International players in trying to increase the operations in our India and earning higher profits by providing quality services and understanding Indian customers better
India is considered to be one the most emerging economy especially in respect to the insurance industry , growing interests and awareness towards Health Insurance among the Indians, new products designs and easy access and improves distribution channels contribute on increasing the growth of Insurance sector also the government has helped by liberalising various policies for all private players and foreign investors , it will help in creating more employment opportunities improve customer service and also give competitive rates of premium to the customers
With the rising medical prices and nature of government hospitals the the Indians are forced to go to Private posh hospitals to receive a quality service& medical treatment. But premium services comes at a premium price which cannot affordable for all sections of society. Thus one does need a Health Insurance to cover their health expenses and also give their loved ones a quality treatment
Thus the future of health insurance is looking good, seeing the increasing awareness among people as well as better understanding the benefits of a health insurance policy there’s complete chance of boom in health insurance penetration. Even measures of government like raising tax deductions and launching National Health Insurance Schemes like Rashtiya Swasthiya Bima Yojana (RSBY), Employment State Insurance Scheme (ESIS), Central Government Health Scheme (CGHS), Aam Aadmi Bima Yojana (AABY), Janashree Bima Yojana (JBY), Universal Health Insurance Scheme (UHIS) are helping the Indians to buy a health insurance.
The growth of health insurance sector will also help in booming job opportunities in the country like marketing ,sales, distribution ,actuary ,underwriting, operation etc .Thus creating an good future for health insurance market as well as professionals working in that industry.

Recommendations

• Improving public awareness – Awareness could be raised by taking helps from banks, capital markets ; other financial institutions as Insurance is a an integral part of growth and development of the country. Enlightening people about the benefits of health insurance in monetary terms, because making people understand about the policies in financial terms would be a much better option. This will highlight the financial benefits of actually opting for a health insurance. Making people understand about the rising costs of medical expenses, if something miserable were to happen in a family. Also educating people about the cover they would be of great help
• Innovation in products – Inspite of new entrants in health insurance market the products offered by every company is some what similar, thus there is a need to create policies which may vary as per the target audience and bring innovation. Better and newly designed products would cater needs of customers better leading to better health insurance penetration.
• Improving Customers mindset – In India Insurance is seen more as an expense then an investment or an security for themselves and their family. So giving proper knowledge and importance about the health insurance would surely improve customers mindset and after knowing the benefits of policy it would encourage them to buy a health insurance policy
• Increasing transparency – Health insurance companies often don’t inform about the illness which would not be covered in policy and give fake promises in order to sell their health insurance policy. Giving adequate training to sales persons and enabling to be completely honest with the clients and make them understand the policy instead of just focusing on selling for need of commission
• Eliminating Gst on Premium amount – Even though exemptions on premiums are increased, premiums on gst still hike price of premium to be paid making it expensive for customers.Many Indians tend to look more at the premium amount of policy rather than the benefits it offers.Thus this mental glitch can be taken care of by reducing premium prices through removal of gst on premium

Conclusion
Health of the nation and socio – economic development of the nation always go side by side . It is not a secret to anyone that India is developing smoothly as far as its economic development is concerned. But unlike our economic development we are still far away from our goal we set in respect of the health sector. Current health system in our nation is at a poor stage. Therefore, this proves to be extremely urgent for the government to launch more firm health insurance schemes to insure the huge population of our country
With increase in lifestyle diseases and poor habits of today’s youth, not having a health policy would surely lead to dangerous situation in the coming future. Yes the health insurance users have grown over the past few years but its still a low number when you compare it with our total population.

Thus rise in health insurance penetration becomes extremely important to ensure socio economic development in the country. The role of health insurance brands is to be proactive in spreading the right education ; knowledge about insurance by helping the common masses understand the basic nuances and benefits of purchasing a medical insurance. Helping the citizens decode difficult clauses and the transparency in actions is what would help bridging the gap in awareness. Uncomplicating concept of insurance for the layman is the need of the hour. Instead of just concentrating on sales, companies need to adapt a mindset of bringing out a change in the society. Improved marketing campaigns, raising awareness levels, government health insurance schemes for all classes of society, tax deductions etc can prove to be vital in improving penetration of health insurance sector in the country and showing a promising future for not only health insurance sector but also for development of whole country too.

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Latest Health Insurance Incurred Claims Ratio 2016-17 | IRDA Annual Report


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