Zerodha co-founder Nithin Kamath in a post on X stressed on the urgent need for comprehensive health insurance, warning that most Indians were just “one hospitalization away from bankruptcy”.
Kamath in the post suggested Indians should carefully choose insurers with a track record of at least five to ten years, with a desirable claim settlement ratio in the range of 80-90% to avoid a financial limbo.
He also recommended selecting insurers with 5,000-8,000 network hospitals and an incurred claim ratio of 55-75%, emphasizing that a financially stable insurer is crucial for long-term security.
A recent report by Plum, an insurtech company, titled “Health Report of Corporate India 2023,” sheds light on the troubling state of healthcare costs in India. The report reveals that India has one of the highest medical inflation rates in Asia, reaching 14%, which has led to a significant financial strain on employees.
A staggering 71% of workers cover their healthcare costs out of pocket, while only 15% receive any health insurance support from their employers. This lack of employer-provided insurance is particularly concerning as India’s workforce is expected to grow from 522 million in 2022 to 569 million by 2030.
The burden of healthcare expenses is disproportionately heavy on over 90 million individuals, with costs exceeding 10% of their total expenditure. Despite the anticipated growth in the workforce, employer-sponsored healthcare remains limited, especially among younger employees aged 20-30, who are half as likely to have employer-sponsored insurance as those aged 51 and above. Additionally, 42% of employees across all age groups have expressed a desire for “flex benefits,” which would allow them to customize their healthcare plans to better suit their needs.
Further complicating the issue, only 12% of companies provide telehealth support, and less than 1% offer outpatient coverage. This lack of comprehensive support is particularly troubling for the 85% of employees with chronic illnesses who feel unsupported by their employers. Saurabh Arora, Co-founder and CTO of Plum, notes, “An average person spends 90,000 hours working. That’s almost a third of their life. Employee health should be a top priority for organizations, not only from a humanitarian perspective but also as a strategic investment in their workforce. Hence, just health insurance is not enough.”
A survey by Local Circles, involving 39,000 participants across 302 districts, reveals the challenges policyholders face in getting health insurance claims processed. Many reported that their claims were either rejected or approved only partially, with 43% of those who filed claims in the last three years struggling with the process. Common issues include a lack of full disclosure about policy exclusions, ambiguity due to technical jargon, and claims rejected due to pre-existing conditions.
Medical experts have praised the government’s Ayushman Bharat scheme for providing affordable healthcare to the underprivileged. However, Dr. Narendra Vankar, CEO and Founder of Quantum Corphealth, argues that it is time for taxpayers to receive similar benefits, as many still rely on private insurance.
The survey also highlights the frustration of policyholders with the delays in processing claims, often resulting in prolonged hospital stays and additional costs.