68% Of Indians Have Inadequate Health Insurance Coverage As Expenses Soar: Survey

Around two-thirds, or 68 per cent, of Indians surveyed have less than Rs 10 lakh in health insurance coverage, and 27 per cent have less than Rs 5 lakh, a survey by insurance company ACKO in six Indian metro cities showed.

“The ACKO Health Insurance Index” report also found that while the awareness about health insurance has increased after COVID-19, medical costs are at an all-time high, and the health coverage of most Indians is insufficient vis-a-vis the medical expenses.

The survey covered over 1,000 people in the age group of 28 to 55.

Although 60% say they understand the policy terms and conditions, their awareness is primarily limited to cash treatment, accident cover, and 100 per cent bill payment.

Sixty-one per cent of the respondents do not think of buying health insurance with more than Rs 10 lakh coverage, and 65 per cent believe that Rs 10 lakh health coverage is sufficient for them. At the same time, 64 per cent said they have not increased the coverage and kept it the same as the previous year.

On the parameter of full bill payment, 46 per cent of policyholders said that their health policy covers the entire ‘hospitalisation along with consumables’, whereas 59 per cent of potential buyers are looking for policies with 100 per cent bill payment.

Further, 27 per cent are unaware of the waiting period and said that “there are no waiting periods in the health insurance policies”, and 31 per cent feel that they are covered from day 1.

The family floater policies are the top favorite among the existing and potential policyholders, with 71 per cent and 72 per cent, respectively. It is because these plans offer them the option to include their parents, spouses, and children in the same policy.

However, the slow claim settlement process, partial bill payment, and inadequate network hospitals are a few deterrents working against the health insurance companies. Forty-three per cent of those surveyed find the claim settlement process cumbersome.

Forty-seven per cent of policyholders and 56 per cent of potential buyers find the lack of a 100 per cent bill payment facility put them off. Also, inadequate network hospitals make 41 per cent of policyholders and 44 per cent of potential buyers uninterested in health policies.

What Do Policyholders Think?

Around half of the respondents (48 per cent) think that health insurance is necessary because it provides timely access, 46 per cent stated that it is vital because of the impact the pandemic has had on people's health, and 43 per cent said it is required to meet the high medical cost.

What Do Potential Buyers Think?

Of the potential buyers, 48 per cent think it is needed even if one has no medical condition. Similarly, 44 per cent believe medical care and 41 per cent consider inflated costs as reasons to buy a health insurance policy.

Rupinderjit Singh, vice president of retail health at ACKO, said, "Understanding the customer's mindset regarding their health insurance needs is crucial. Knowing how they evaluate their options and what gaps they want their insurers to fill is important. The ACKO Health Insurance Index has identified these gaps in health insurance."

Buying Pattern Of The Customers

Around 30 per cent of the policyholders and potential buyers prefer using the direct mode to buy a policy, reflecting their increased awareness. Still, 52 per cent of the people surveyed have purchased policies from third parties, says the report. The potential buyers feel more confident about buying policies digitally as 36 per cent said they want to buy from the aggregators while 33 per cent preferred going to a third party.