Over the last 50 years, India has achieved a lot in terms of health insurance; yet only 17% population is covered. Before independence, there was high morbidity, high mortality, and high prevalence of infectious diseases. Since independence, emphasis has been put on primary health care only; and we made considerable progress in improving the health status of the country.
As the socioeconomic condition is increasing, the lifestyle is becoming sedentary which is causing growth in noncommunicable diseases (NCDs). Treatment of NCDs is expensive, therefore it is creating demands of health insurance.
Health insurance is now emerging as a tool to manage financial needs of people to seek health services. Rising financial literacy, favorable demography, initiatives like Pradhan Mantri Jan Dhan Yojana, Rashtriya Swasthya Bima Yojana, Pradhan Mantri Suraksha Bima Yojana, etc. the schemes which are expected to help in penetration in lower and lower middle income groups which does not possess insurance cover. Increase in savings due to rise in per capita income is also a factor due to which purchasing power of consumer will allow to buy health insurance.
Sub-committee at IRDA for standalone health insurance companies recommended lowering of capital requirement from INR 100 Cr to INR 50 Cr. Lots of low budget companies will enter now, few are already enter after this announcement.
FDI limit in health insurance is increased from 26% to 49% which will attract foreign companies. Due to which already many companies are entering into Indian health insurance sector to explore its untapped potential and many are planning to enter soon.
Recently Finance Minister increased Health Budget 2017 from 39,879 (1.97% of total budget) to INR 48,878 (2.27% of total budget) with comments of positive steps to be taken in future to boost health insurance sector with target of 2.5% of total budget by 2020. This will again important for the growth of the sector.
Overall all factors in India including growing GDP, socioeconomic level, financial awareness, government policies, huge working population, increased interest in healthy lifestyle, etc are all favoring the remarkable growth of Indian Health Insurance sector.