Shouldn’t health insurers pay all your medical expenses?


Looking at the pace of changes all around, it is safe to quote that it just takes one revolution to start an evolution. At a time when consumers are being empowered with transparent information and freedom of choice, organisations across sectors are looking for ways to become increasingly consumer-centric to offer ease, comfort and uncomplicated services.


The telecom space has witnessed major revolution with customers being empowered with free voice calls, affordable data connectivity and reasonably priced 4G handsets. The cab aggregators have change the system commuters’ travel around their choked cities, while providing ‘dignity of labor’ to entrepreneur drivers. The evolution of online shopping has made customer experience far more convenient, as there’s no need for shoppers to walk around myriads of stores – the goods and services are just a click away. We are in the midst of an unprecedented revolution in healthcare industry with improved access and availability of advanced treatments that are sophisticated but expensive. An enabler of quality healthcare, the health insurance industry is also undergoing an enormous transformation. However, there’s a stark requirement for introduction of a whole new category of products to enhance customers’ experience and meet growing expectations that include protection and savings.


Traditionally, health insurance policies used to pay for only inpatient hospitalization. However post liberalization the health insurance industry has witnessed significant transformation and growth. Today it is one of the fastest growing sectors in Indian insurance. The arrival of private insurers in India saw the introduction of many innovations like life-long coverage, no claim based loading, no co-pays and sublimits, restoration of sum insured, wellness based incentives, single disease covers etc. Still ironically the penetration level stands significantly below global averages. Hence, it’s imperative to address the health needs of the population with innovative customized health insurance products and solutions.


Need to cover the obvious & unusual healthcare expenses

In India, over 60% of healthcare expenses incurred is out of pocket pushing over 7 Crore families every year below poverty line. India ranks 183 out of 189 countries on account of out of pocket expenses, therefore insurance is very critical in filling the gap which will actually pull down the out of pocket expenditure. Over 70% of Out of pocket household expense is towards purchase of medicines.

Indian consumers’ hesitation to buy health cover perhaps stems from the fact that most of the healthcare expense goes towards outpatient care, medicines and other medical devices, while most health insurance policies cover only hospitalization costs. The healthcare spent on outpatient treatment is high as the technological advancements in healthcare lead to much lesser requirement of hospitalisation for treatment. To add to that, our sedentary lifestyles are making us more prone to the diseases and doctor consultations. With this at the backdrop there is a huge need in the market for products that cover outpatient expenses like diagnostic tests, vaccinations, pharmacy, dental expenses, spectacles, and consultation charges with medical practitioner.

Increased Healthcare Needs & Healthcare Inflation – a double whammy for senior citizens

In one’s golden years usually their healthcare needs increase. Given the medical inflation and no source of income, it becomes challenging for them to afford quality healthcare. Although lifelong coverage has become a norm and the industry also offers special plans for senior citizens that generally offer various features like cashless hospitalization, critical illness coverage, specific coverage for diseases like cancer, stroke and so on, but all these coverage come with high premiums. It is important for the insurers to contemplate about reducing the premium load for senior citizens. This can possibly be achieved through wealth accumulation schemes that can be utilized for future health spends, while they grow old gracefully. Hence, we believe that this segment is a vital customer base and there is an increasing need to work on the products that appeal them.

Addressing Return On Investment Mindset

While the health insurance space is ready to take the next big leap and innovate to introduce new disruptive products in the Indian market, one of the critical objectives still remain to map health insurance with its return on investment. In India, health insurance is still considered an expense as one believes that to claim the amount, one needs to fall sick. On the other hand, life insurance offers options such as ULIPs, which provides risk cover for the policy holder along with investments, thereby making it easier for the consumer to map its return on investments. With the ever-evolving consumer needs and return on investment being a critical challenge, it’s now imperative that the health insurance sector also attempts to offer similar delights to customers while offering health insurance coverage.


Indian customers are probably most demanding and judicious as they always look for great value for money, high quality and great service. It has been imbibed in their minds to plan for future – be it travel or studies or daughter’s wedding or their finances. Hence Industry must contemplate and introduce innovative products that addresses the core needs of the customers to take care of their present as well as future healthcare financing needs.

Antony Jacob,CEO,Apollo Munich