“India has one of the biggest health protection gaps amongst the countries in Asia.
The gap is projected to increase by 12.3 percent annually to USD 214 billion by 2020,” according to a report by Swiss Re, a leading wholesale provider of reinsurance and insurance products.Health protection gap is defined as the difference between the level of healthcare costs which would be required to meet consumer needs, versus the amount that would be available to cover those costs, if society’s total healthcare expenditure remained a constant percentage of GDP.
The country is likely to face a shortfall in healthcare financing of close to USD 43 billion in 2020, which will require additional fiscal spending or higher out-of-pocket funding by individuals, it said.
Only 288 million (22.2 percent) of India’s population are covered by health insurance, of which 214 million are insured by government schemes, 48 million are covered by group insurance, while 25 million use individual or family floater plans, it added.
The government and society will have to spend more in the future to make up for the growing demand for healthcare services due to higher income growth and a large population, it opined.
In addition, out-of-pocket expenses account for nearly 60 per cent of the total healthcare expenditure in India, with a very minor contribution from private insurance plans and a catastrophic event will wipe out one’s entire savings, it said.
With the emerging middle class estimated to grow almost 10-fold from 50 million people at present to 475 million by 2030, the demand for quality healthcare and speed to access services will be greater.
Expanding insurance market like India requires a sustainable and dependable healthcare and insurance infrastructure, it said.
Increased consumer awareness along with easier access to healthcare are essential to drive penetration and double health insurance coverage in India by 2020.
One of the possible models to insure the entire population of the country could be that the government gives a base cover to the bottom of the social pyramid, while private insurance companies cover the levels above, it added.