Globally, countries are progressing towards universal health coverage as laid down under UN Sustainable Development Goals. However, health insurance in India is highly underpenetrated at just 35% of the population, of which the majority is covered under government-sponsored health insurance schemes. The high out-of-pocket healthcare expenditure is taking a heavy toll and pushing 4% of the population below the poverty line every year. Further, the havoc created by the Covid-19 pandemic has brought to the forefront the need for universal health insurance coverage. As a nation, today
we have the opportunity to build on and scale our efforts to transform health insurance in India.
In this context, BCG in association with CII has released the attached report titled “Health Insurance Vision 2025 Insuring Lives of Billion Indians” presenting a clear need for driving universal health insurance coverage and setting a bold vision of insuring the health of 1 billion Indians by 2025. In the effort to holistically advance towards the vision, the report identifies the pain points, needs, and aspirations of different population segments and lays out a multi-stakeholder action plan to accelerate health insurance penetration in the country.
Pranay Mehrotra, managing director and senior partner, BCG – “We have proposed large scale interventions to drive awareness, serve unmet needs of different segments, improve affordability and strengthen distribution muscle in the last mile while building underlying enablers of technology, governance and healthcare infrastructure. To meet the bold vision of providing health insurance cover to 1 billion Indians by 2025, concerted efforts by key stakeholders to drive these interventions is crucial”.
Pallavi Malani, managing director and partner, BCG – “Survey done as part of this study helped identify the issues across different segments driving low health insurance penetration today. We see awareness as the major impediment with 65% population in low-income segments and 40%+ in T3+ cities unaware of health insurance. Even within those who are aware, 30% don’t understand basic hygiene terms like ‘claims’, ‘sum insured’. Also, varied concerns in current health insurance offerings have been highlighted across different segments. Based on these findings, a holistic approach has been drafted to drive health insurance penetration to the vision of covering 1 billion lives”.
BCG and CII research report key highlights –
- Health insurance coverage is critical to driving healthcare affordability and in turn, better care access and outcomes. 63% of the healthcare expenses are currently borne out of the pocket, pushing almost 4% of the population below the poverty line every year. The current health insurance penetration level of only 35% highlights the need to take urgent action. Hence, a bold vision of covering 1 billion Indians is set for 2025 with comprehensive health insurance cover.
- The report delves into detailed consumer research that brought forward 3 issues in driving health insurance penetration – low awareness, gaps in product value proposition and limited last-mile distribution channels. Further, a deeper study of the results uncovered the need for a segmented approach to identify challenges, gaps, and imperatives across different population segments.
- The report proposes large scale interventions to drive ‘awareness’ via industry-wide efforts, curate product offerings to the needs of segments to create ‘assurance’, making insurance ‘affordable’ through cost, pricing measures and strengthen distribution to the last mile to improve insurance ‘access’. In addition, actions are needed to build underlying enablers of technology, governance, and healthcare infrastructure to support the delivery of healthcare and availing of health insurance.
- Finally, the report charts out a detailed call to action that requires all key stakeholders to come together and work for hand in hand. It presents actions to drive awareness, simplify insurance for better understanding, eliminate operational inefficiencies, foster innovation in product and delivery models while strengthening healthcare infrastructure and governance mechanisms for improved quality of care.