Few Indians above the age of 55 enjoy the benefit of employer-provided health insurance after they have retired. Apart from the public-sector organisations, only a handful of private companies provide health insurance cover to their employees after retirement. The awareness of health insurance among self-employed individuals and families is at much lower levels.
Today, almost all employers terminate health insurance benefit as soon as an employee retires. The golden days when employees could extend the group health cover to parents and siblings are long gone. In a hopeful scenario today, an employee would be allowed to cover his spouse and children in the company health insurance plan. To add to the misery, sum assured amount also has drastically gone down; this is ironical given the rising cost of health care and inflation. So, the question that arises now is-
- How do we increase health insurance penetration in a country which holds the 2nd largest population of the world?
- Can every household have sufficient health insurance cover to avail good quality health care?
There is a pressing need to resolve this paramount issue, so much that even the Finance Minister Mr. Pranab Mukherjee has been urging the insurance industry to come up with feasible health insurance solution for the masses. IRDA, the insurance regulatory body of India, is constantly compelling insurers to increase the penetration of health insurance beyond the SEC A1 and A2. This is apparent in the last few guidelines of the regulator suggesting innovative solutions such as ‘Health plus Life combi products’ and ‘a single micro insurance policy’ which offers both ��” a life cover and a health insurance. But innovating products can only go so far. We need a solution which is far more effective and has a better reach.
If the Government of India can make its tax administration effective by putting in a system of Tax deducted at Source (TDS) then a mechanism to provide affordable health care should also be possible. Employee State Insurance Scheme (ESIC) has its own limitations and the quality of health care offered is not up to the mark. The aim is to provide everyone with a good health insurance policy which can be availed life long and used across all recognised hospitals in the country. One should probably go to the extent of making health insurance mandatory at various levels. Health insurance should be made a compulsory part of the compensation package of an employee be it small companies or large organisations. Employees should have the option to include parents and siblings along with spouse and children.
Many countries have been faced with this issue and they have adopted different approaches to address this. For instance, in Switzerland, health insurance is compulsory for all resident individuals. Here, Insurance companies are required to offer a basic insurance to everyone, regardless of age or medical condition and are not allowed to make a profit off this basic insurance. In 2008, the Chinese Government rolled out a reform plan which listed public health, rural areas, city community health services and basic medical insurance as four key areas for government investment. The first system of socialized medicine which is based on compulsory insurance with state subsidy was developed in USA. Socialized medicine is a system for providing medical and hospital care at a nominal cost by means of taxation and government regulation of health services. Israel has maintained a system of socialized health care since 1948 whereby the state is responsible for providing health services to all residents who pay a health insurance tax.
Now, whether we adopt a socialised medicine system or a health insurance tax mechanism or some hybrid approach is left for the policymakers to decide. But there is a serious need for government departments, insurance industry, health regulators and employers in India to ensure that the nation is provided with a strong, feasible and lasting healthcare financing framework.
(curtsey : money control)
Rupesh Yatesh Dalal
Head Research Department
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