By Abhishek Poddar
India’s current population of 1.38 billion is about 17.7 percent of the world’s population. Still, the total cost of health care per person is only $ 63.75. It’s almost a challenge, a mismatch in access, quality and affordability. India is probably the only country in the world with vast medical facilities. These facilities are often inaccessible and out of reach when needed or in an emergency. The health care situation in a country like us is dire, to say the least. That said, healthcare inflation is currently 14 percent. India also has the highest out-of-pocket health care costs of any G20 country, driving nearly 60 million people into poverty each year (National Health Authority, 2020).
The scenario is no different in the insurance sector. According to the Indian Brand Equity Foundation (IBEF), the growing middle class and the increased burden of old and new illnesses are driving demand for health insurance. With the growing demand for affordable and quality health care, the spread of health insurance is ready to grow in the coming years. Therefore, the next step for insurers is to bridge the gap between access to health care and the penetration of insurance.
Imagine the above as a problem statement. Next, let’s find out the possible solutions.
Globally, in many developed economies, insurance is provided by states such as Australia, Canada, Norway and the United Kingdom. Due to the high population density in India, the government alone cannot bear the burden of medical expenses. This risk needs to be diversified. Therefore, as in many counties, individuals buy their own insurance or employers provide appropriate medical insurance known as group health insurance.
According to Niti Aayog’s report on Middle Middle, 40 million people (about 30%) of India’s population lack financial protection and are called Middle Middle. They face two important challenges. One is the lack of access to quality medical care, and the other is the inability to purchase products designed for the top of the pyramid. Therefore, it results in employers covering their employees.
Let’s do GHI math.
Companies spend an average of Rs 3,500 per lifetime. Based on the policy, this can only include employees, employees + spouses, employees + spouses + children, and employees + spouses + children + parents. Compare it with the average annual premium of Rs 3,000-5,000. What this doesn’t tell you is that the premiums paid to GHI have no waiting period, can include parents and spouse (and children), and can cover existing illnesses (buy in bulk). To be done).
In India, GHI is eligible for 100% tax deduction. This means that when a company pays for an employee’s medical expenses, it will benefit from a full tax credit under the various sections of the Income Tax Act. The entire insurance premium will be recorded as a project cost.
Today’s businesses are willing to pay for the health of their employees. The companies in our portfolio are insured for Rs 50 racks per family, and the average insurance amount for our portfolio is approximately Rs 5 racks per family. We are choosing parental compensation and an increasing number of companies are including their spouses and children in Group Medical Compensation (GMC). About 80% of these are first-time insurance buyers. GHI coverage is also increasing in Tier II and III cities (because more companies target employees’ parents and spouses).
Here are five reasons why GHI is a must.
No waiting period: Employees take out the employer’s group health insurance from the day they join the company. This is in contrast to personal insurance, which has a minimum waiting period of 30-90 days.
Scope of existing illness: Existing illnesses may not be covered if employees purchase their own insurance. Even if an employee purchases a large amount of insurance, he / she will only be covered for the existing illness if he / she has 3 to 5 years of coverage with the same insurance. On the other hand, GHI’s policy covers existing illnesses from day one.
More than just health insurance: GHI is not limited to health insurance and medical examinations. This is a comprehensive health policy and the first port of call in emergency health care. From now on, insurance partners will be responsible for providing end-to-end care to their members, from prevention to primary and tertiary care. After the pandemic, businesses recognize the importance of a comprehensive healthcare package that includes both preventative and therapeutic treatments. According to industry reports, 70% of GenZ require employer support for mental health and health safety. On their side, companies are prepared to attract and retain the right talent and offer a variety of health benefits.
Companies want to take care of their employees. Previously, group health insurance was synonymous with large companies that could afford it. Today, even startups with only two employees can get comprehensive health insurance. The pandemic has changed the perception of insurance that it is no longer a product of luxury, but a basic necessity. According to LinkedIn Global Talent Trends 2022, 63% of employees prioritize work-life balance when applying for a job, then 60% prioritize compensation and benefits, and 40% colleague. And prioritize the culture of the workplace.
Diversity and comprehensiveness: A previously unprecedented special cover based on GHI policy is now being accepted and offered by interested companies. These include:
●● LGBTQ cover: According to recent reports, LGBTQ people make up almost 15 percent of India’s population. In recent years, there has been a major shift to LGBTQ health insurance for community members and cohabiting partners. There is no special premium for this, but it helps a lot to earn the trust of employees.
●● Maternity and Baby Day 1 Cover: Although giving birth to a baby is an exciting and life-changing experience for a woman, her journey from prenatal to postnatal is often full of financial difficulties. According to a recent survey of maternity insurance, the maternity benefits offered by businesses are inadequate given the exorbitant costs of pregnancy and medical care for newborns (regular or caesarean section). Therefore, births above Rs 1 Lakh and 1st day cover of babies under the GHI policy are slowly being picked up among businesses.
●● Mental health cover: During the pandemic, mental health care, which was not covered by traditional employee benefits, became a major concern for the workforce. The GHI policy provides a mental health cover that protects employees from stress, burnout and anxiety.
●● IVF treatment cover: Healthcare professionals are observing an increase in cases of infertility. According to the Assisted Reproductive Technology Association of India, one in six couples suffers from infertility and 27.5 million infertile couples are attempting conception. This has probably led to an increase in demand for IVF treatments that can help couples start their own family. Since IVF treatment is a costly procedure, companies are advised to purchase this cover for their employees.
In addition to the above, some companies choose comprehensive coverage such as OPD, GPA (Group Personal Accident), hospicash for gigs and freelance workers, LASIK surgery, and free dental care.
GHI is a great safety net for millions of people to reduce the risk of debt and poverty. It’s affordable, inclusive, and a legitimate way for government and retail policies to cover a large population with natural limits. In summary, we need to ensure two things. One is better medical access and the other is deeper penetration of coverage. For me, group health insurance is the answer not only for employees, but also for missing middlemen in India.
By Abhishek Poddar, Co-Founder and CEO of Plum
(Disclaimer: The expressed views are for the author only and ETHealthworld does not necessarily subscribe to them. ETHealthworld.com may incur any damage directly or indirectly to an individual / organization. I’m not responsible)
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