Types of Health Insurance in India – The individual involved in health insurance is required to pay a fixed sum (a premium), every month or year to bind him to the insurer, and thus be eligible for the health cover. sometimes also called, medical insurance or simply Mediclaim, Health Insurance, is a kind of insurance that covers the cost of an individual’s medical and also surgical expenses.}}}
Health insurance in India usually pays for only inpatient hospitalization and for treatment at hospitals within India. Outpatient services were originally not payable under health policies in India. The first health policies in India were called Mediclaim Policies. In the Year 2000, the Government of India opened up the insurance sector and allowed private players into the insurance sector. The coming of private insurers in India brought the introduction of many creative products such as the now popular family floater plans, top-up plans, as well as critical illness plans, including hospital cash and top up policies.
The health insurance sector in India hovers around just 10% in density calculations. That means that about 90 percent of the Indian population is uninsured. One of the main reasons for the unimpressively low penetration and coverage of health insurance cover is the lack of competition among players in the sector. IRDA which is the government agency responsible for insurance policies in India can ameliorate this if they create health circles, similar to telecom circles to promote competition and innovation.
On paper, government health services should be available to all citizens under the tax-funded public health insurance cover system. In practice, paperwork and paper trails make accessing such services difficult, and so compel most households to seek private insurance cover, resulting in high payments from the client’s pocket.
Health insurance plans in that are offered in India today can be broadly classified into these few categories:
Types of Health Insurance in India
1. Hospitalization Policies
Hospitalization policies are indemnity plans that pay the cost of hospital stays and medical costs of the insured party subject to the sum agreed in the contract. The sum agreed and insured can be applied on a per policyholder basis in case of individual health insurance policies, or on a ‘floater basis’ in the case of family floater policies. In case of family floater policies, the sum paid and insured can be utilized by any of the members of the family who falls sick and is insured under the plan. These policies do not usually pay any cash benefit. In addition to hospitalization benefits, there may also be specific policies that may offer a number of additional benefits such as maternity and newborn insurance, daycare procedures for specific procedures (for example: surgeries), pre- and post-hospitalization insurance policies, domiciliary benefits where patients cannot be moved to a hospital and are therefore treated at home, daily cash for maintenance when sick, and also convalescence.
There is another type of hospitalization insurance policy which is called a top-up policy. Top-up policies usually have a high deductible which is usually set a level of existing cover. This policy is usually targeted at people who already have some amount of insurance from their employers. If the employer-provided insurance cover is not enough, people can then supplement their cover with a top-up policy to give them the aspects of insurance cover that they lack. However, this is usually subject to the deduction on every claim that is reported for every family member on the final amount that is payable.
2. Family Floater Health Insurance:
Family health insurance plans are usually designed to cover entire families in one health insurance plan. It works usually under the assumption that not all the members of a family will suffer from illness at one particular point in time. It covers hospital expenses which can be before and after a hospital stay. Most health insurance companies in India that offer family insurance have good networks of hospitals and clinics to attend to the insured party in the time of any emergency.
3. Pre-Existing Disease Cover Insurance Plans:
Pre-Existing Disease Cover is special in that It offers cover against the disease that the policyholder had before buying the health insurance policy. Pre-Existing Disease Insurance Cover Policy offers cover against pre-existing (usually serious and long term) disease for example diabetes, kidney failure, heart disease, and many more such illnesses. After a Waiting period usually of 2 to 4 years, it gives complete covers to the insured party.
4. Senior Citizen Health Insurance:
As the name suggests Senior Citizen Health Insurance Policies are a special kind of health insurance policies that are designed are for older people in the family. It provides insurance cover and protection from health issues that commonly come during old age. According to IRDA guidelines, each insurer is mandated to provide cover for up to the age of 65 years.
- 5. Maternity Health Insurance Policies:
Just as Senior Citizen plans to take care of Older people so does Maternity health insurance policies ensure cover for expectant mothers (Pregnant Women) during the processes of childbirth. This usually includes pre and post-delivery maternity treatment, and any additional expenses. It usually takes care of baby delivery (either normal or cesarean section). Like Other kinds of Health Insurance, The maternity insurance policy providers usually have a wide range of hospital networks, including clinics and the likes that take care of ambulance expense.
These services are under the supervision of the Maternity Benefit Act. The Maternity Benefit Act is a special law that applies to women who do not work in any of the establishments covered by the ESI, but who have employment in factories, mines, circuses, including plantations, shops or other such establishments that have in their employ at least 10 persons. Also covered in this plan are women working in an establishment covered by the ESI, but whose salary somehow exceeds the ceiling of subjection.
Since 2010, the Indira Gandhi Matritva Sahyog Yojana (IGMSY) initiative, which is run by the Ministry of Women and Child Development, has been set up in some districts in India (52 districts as at 2017). This program is designed for pregnant women who are aged 19 or over, during their first 2 completed pregnancy terms (called ‘viable child’). The sponsorship consists of a total amount of 6000 INR which is paid in 3 installments, and is subject to having performed and completed the necessary medical examinations for the mother and the child:
- First Installment is paid at the end of the 2nd trimester of pregnancy
- The Second Installment is paid at birth
- The third installment is paid at 6 months of the child
6. Hospital daily cash benefit plans:
Daily cash benefits is a defined benefit Health Insurance policy that pays a pre-agreed sum of money for every day of hospitalization that the insured party endures. This is a kind of insurance policy that aims to provide cash for the treatment of the insured party, thus allowing him to seek medical attention at a hospital of his own choosing. The payments are usually for a defined number of days in the policy year and may also be subject to a deductible of a few days within the year.
7. Critical illness plans:
Critical Illness Plans are a special kind of Insurance Policy because they are benefit based policies which pay a kind of (fixed) benefit amount on diagnosis and treatment of covered and insured critical illness and also medical procedures. These illnesses are generally specific and also high severity and also low frequency in nature that usually cost high when they are compared to day to day medical / treatment insurance needs. which includes heart attack, cancer, stroke, etc. Now some insurers have designed options of staggered payment of claims which work in combination to an upfront lumpsum payment solution.
8. Proactive Insurance plans:
Some insurance companies offer Proactive living insurance policies. These are insurance policies that are designed keeping in mind the peculiar Indian market and which provide medical assistance that is based on medical, behavioural and lifestyle factors and then associated with chronic conditions that policy holders may have. These services are designed to help policy holders understand and manage their health better.
9. Disease-specific special plans:
Some insurance companies offer specially designed plans for specific diseases like Dengue Care. These are policies designed with keeping in mind the growing occurrence of viral diseases like Dengue Fever, Malaria, and so on in India which has become a cause of concern and so the insurance policies provide assistance based on medical needs, as well as behavioural and lifestyle factors that are associated with such conditions. These plans aim to help policy holders meet the expenses if they are faced with the disease.
The Nine Types of Health Insurance listed above are the major kinds of commercial insurance that exist in India at the moment. The main publicly funded health insurance schemes are listed before:
Plans funded by the Indian Central Government
- 1. ESI scheme: This insurance scheme covers organized private sector workers(big company workers), which is about 55 million people.
- 2. Central Government Insurance Scheme: This insurance scheme covers central government agents and retirees (Government Workers Insurance Scheme), i.e. about 3 million people.
- 3. RSBY: this insurance scheme covers families below the poverty line (poor people insurance) of about 40 million families.
Federally funded Insurance Program
- Andhra Pradesh: This scheme provides insurance cover for families below the poverty line or with annual income which falls below INR 75,000. It represents 70 million beneficiaries.
- Tamil Nadu: This insurance scheme finances health insurance cover for families below the poverty line or with annual income below INR 72,000 a year, that represents about 40 million beneficiaries.
- Karnataka: this is a very popular insurance scheme which covers members of rural cooperatives, there are more than 3 million people in this category.
That’s it about Types of Health Insurance in India. Please note that the information provided here is not enough for you to make a financial decision, just for educational purposes, you are strongly advised to seek the service of a professional in insurance before making any monetary decision.
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