A

Summer Project Report

On
“A Study Of Health Insurance Sector
In India”
MOTILAL OSWAL FINANCIAL SERVICE LTD.
In the partial fulfillment of the Degree of

Master of Management Studies (Finance)

under the University of Mumbai

By
Aniket A. Bhatkar
Class: MMS-A & Roll No: 10

Specialization: Finance
Batch: 2020-22 (Year)

Under the Guidance of

Prof. Vaibhav Patil

ATHARVA INSTITUTE OF MANAGEMENT STUDIES

Malad - Marve Road, Charkop Naka,
Malad (West), Mumbai 400 095.
 ACKNOWLEDGEMENT

At the outset of this project, I would like to express my profound thanks to a few
people without whose help, completion of this project would not have been
possible.

First and foremost, I would also like to thank PROF. VAIBHAV PATIL for being an
excellent mentor and helping me whenever I approached him.

I would like to express sincere thanks to “MOTILAL OSWAL FINANCIAL SERVICE

LTD.” for giving me this opportunity to work with them.

I would like to thank FACULTY MEMBERS of ATHARVA INSTITUTE OF

MANAGEMENT STUDIES who provided me with valuable insights into the
completion of this project.

I am very grateful to Dr. R. G. Ratnawat, Director of Atharva Institute of

Management Studies, for giving me the opportunity to do this project in
“MOTILAL OSWAL FINANCIAL SERVICE LTD.”

Last but not the least I would like to express my deepest gratitude to my
PARENTS for the making of this project. Without their support and guidance, the
completion of the project would not have been possible.

Aniket Anil Bhatkar

 DECLARATION

I, the undersigned, hereby declare that the Project Report entitled “A

Study Of Health Insurance Sector In India” written and submitted by me to

the University of Mumbai, in partial fulfillment of the requirement for the

award of degree of Master of Business Administration under the guidance of

Prof. Vaibhav Patil is my original work and the conclusions drawn therein are

based on the material collected by myself.

Place: Malad (West), Mumbai

Date:

Aniket Anil Bhatkar

Student Name & Signature
 CERTIFICATE

This is to certify that the project entitled “A Study Of Health Insurance

Sector In India” is the bonafide work carried out by ANIKET ANIL

BHATKAR student of MMS., Atharva Institute of Management Studies,

during the year 2020-2022 in the partial fulfilment of the requirements for the

Degree of Master of Management Studies and the project has not formed the

basis for the award of any other degree, associate ship, fellowship or any other

similar titles.

Place: Malad (West), Mumbai

Date:

Signature of Guide Signature of Director

CERTIFICATE FROM COMPANY
 INDEX

Sr. Content Page

No No.
1 Executive Summary 1
2 Introduction 2
3 Objective of Study 3
4 Literature Review 4
5 Research Methodology 5
6 History 6
7 Health insurance Sector in India
Introduction 8-9
Types Of Health Insurance 10
Key players in India 11
Market Leader Of Health Insurance Sector In India. 12
Need For Health Insurance in India 13-14
Various Health Insurance Products of India 15-16
Government initiatives 17-22
Entry of banks into health insurance. 23

8 Impact of covid 19 on health insurance sector. 24-26

9 Future of Health Insurance After COVID-19 27-28
10 Growth of the health insurance sector 29
11 Issue and challenges 30-33
12 Tax benefits 34-35
13 Recommendation 36
14 Conclusion 37
15 Bibliography 38
 EXECUTIVE SUMMARY

This project examines how the insurance industry has evolved over time. The primary goal of
this project is to investigate the significance of the health insurance sector in India. Over the
last few decades, India's insurance industry has grown. India has one of the highest private
healthcare expenditures in the world. In the fiscal year 2018, health insurance in India cost
370 billion Indian rupees. It was expected to surpass 2 trillion rupees by the fiscal year 2030.

Health insurance is a mechanism that provides financial protection in the event of illness or
injury. India's achievements in terms of health improvement have been remarkable over the
last few decades, but the health insurance industry remains far behind that of many other
developing countries.

In today's scenario, as everyone wants to insure themselves, this sector has seen increased
penetration. The study also explains the authority's laws and regulations for the sector, as
well as how it protects customers' rights. This project examines which insurance companies
have successfully grabbed the market and now have a dominating position in both the life and
general insurance markets. This project outlines the opportunities that the sector can take
advantage of. The health insurance industry has its own set of concerns and obstacles that
must be addressed, and the best way to do so has been attempted to estimate with the help of
this project.

1
 INTRODUCTION

Insurance is a contract between two parties in which one undertakes to take on the risk of the
other in exchange for a monetary payment known as a premium and promises to compensate
the other in the event of an unexpected incident. The major benefit of insurance is that it
spreads the risk of a few individuals across a big group of people who are exposed to similar
risks.

A person's and family's lives are normally pleasant unless a health problem arises that is
unpredictable and cannot be predicted before it occurs. Health insurance is a type of general
insurance that pays for the costs of medication and surgery for the insured, who could be an
individual, a family, or a group. It is a contract in which an individual, a family, or a group
purchases health insurance coverage in advance for a price known as a premium. In other
terms, health insurance is a contract that allows an insured to postpone, defer, minimize, or
eliminate paying for medical expenses. The insurer will either give cashless treatment for
medical problems or refund medical expenses made in any of the policy's network hospitals
around the country.

Health insurance is a type of general insurance that accounts for around 29% of all premiums
paid by all other types of general insurance. However, there are multiple problems in this
industry, which is the driving force behind this research. This research will assist insurance
companies in better understanding their performance and the magnitude of losses that this
industry has incurred over time.

2
 OBJECTIVE OF THE STUDY

1. To study the overall healthcare insurance sector of India.

2. To recognize the changes that have occurred in the health insurance industry
throughout time.
3. To determine the sector's opportunities for growth and development in India.
4. To determine the challenges and issues that the Indian health insurance industry faces.
5. Study of the concept and structure of Indian health insurance.

3
 LITERATURE REVIEW

Gangolli et al. (2005) According to the study, the majority of India's population lives in
poverty. According to this, they spend 70 to 90 percent of their income on food and related
expenses. Social support for health and other fundamental necessities becomes crucial in this
situation. The study also found that avoiding the public health sector is a bigger problem than
simply implementing a government policy.

(Prinja ,et.al ,2012) The Indian healthcare system is notable for its massive public health
infrastructure. However, skilled personnel are in short supply, and as a result, this
infrastructure is underutilised. Due to the disastrous impact of healthcare expenditures, about
a quarter of all patients are driven below the poverty level.

(Madhukumar, et.al, 2012) Low income, uncertainty of income, unreliable sources, no

support from friends or relatives because they do not use them, not a valid investment, do not
feel the need to invest in health insurance, and they do not have adequate knowledge
regarding the additional benefits of the insurance policy were the major barriers to the
subscription of health insurance policies. As a result, it is evident that there is a knowledge
gap between policymakers and potential policy implementers.

(Priya and Srinivasan, 2015) Because of the changing environment and the changing
lifestyle of the current generation, the majority of Indians are vulnerable to serious illnesses.
Health insurance information should be disseminated like wildfire because it is critical. This
would make it easier for consumers to cover unplanned expenses that arise from unforeseen
circumstances. Work must be done to make the situation a win-win situation for both the firm
and the people by focusing on market penetration so that insurance schemes may assist the
company reach its full potential.

Ramani and Mavalankar (2005) Based on an analysis of the opportunities and challenges
for improving India's health system, the report highlighted the roles of various stakeholders in
improving the health sector, including the government's promotion of social healthcare
insurance and scaling up financial resources, protection of the poor against illness and
exploitation, and quality improvement through standards and accreditations. According to the
report, the business sector should build cross-subsidizing mechanisms to provide high-quality
evidence-based medical services at reasonable pricing.

4
 RESEARCH METHODOLOGY

Secondary Data:
The study is based on secondary data from the Insurance Regulatory Development
Authority's (IRDA) annual reports, as well as different journals, research articles, and
websites.

5
 HISTORY

In the late 1940s and early 1950s, public sector workers (Central Government Health
Scheme) and formal sector workers (Employees' State Insurance Scheme) were enrolled in a
contributing but significantly subsidised health insurance programme. In 1999, the
government opened up the private sector (including health insurance) as a result of the
economy's liberalisation from the early 1990s. This development made it possible for people
with higher incomes to receive high-quality care from private tertiary care facilities.
However, in the last five years (since 2007), India has seen a slew of new efforts, both from
the national government and from a slew of state governments jumping on the health
insurance bandwagon. One of the motivations for launching such schemes is the Indian
government's commitment to increasing public spending on health care.

Following independence, primary health care became more important, and it has witnessed
significant improvements. In 1948, India's health insurance history began with the
Employee's State Insurance Scheme (ESIS). It was established as a social security umbrella
for organized-sector blue-collar workers. It offers health-care services through a network of
ESIS-approved clinics and hospitals. ESIS covers OPD and IPD expenses as well as cash
payments to compensate for lost wages and other medical contingencies. This plan is still in
place and is primarily funded by company and employee contributions. A program for central
government health schemes (CGHS) was also introduced in 1954. It was a health-
contributory scheme that provided comprehensive healthcare services, primarily to central
government employees and their families. The government of India and central government
employees contribute a nominal amount per month based on their pay scale, which is still
ongoing.

The health insurance market is growing prominence in India, leaving no stone uncovered.
Health insurance is currently one of India's fastest-growing industries. Private health
insurance businesses, IRDAI, and other stakeholders in this ecosystem are working hard
every day to develop the finest health insurance coverage for every citizen. When it comes to
health insurance, Indians have become the most active and involved clients. Following the
pandemic, buying cashless health insurance online has become the new normal. Rising
medical inflation, advances in medical sciences, pandemics, and urgent ailments are all

6
contributing to this increased focus and awareness. The availability of health insurance for
seniors, pregnant women, and children has increased the popularity of medical insurance.

As a result, the Indian health insurance sector has provided lucrative growth prospects for
both corporations and users.

General Insurance Corporation (GIC) issued India's first Mediclaim policy in 1986 to
standardise the terms and conditions of health insurance. It was a voluntary health insurance
plan that covered inpatient costs but excluded pre-existing diseases, pregnancy, childbirth,
HIV/AIDS, and other conditions. The expenses were reimbursed directly through third-party
administrators' mechanism based on the indemnity agreement. However, after the
Government of India established a new economic policy and liberalisation process in 1991,
the insurance business was privatised. The Indian parliament enacted the Insurance
Regulatory and Development Authority (IRDA) bill. It marks a turning point in the evolution
of health insurance.

7
 HELATH INSURANCE SECTOR IN INDIA

In India, the health insurance industry was established in 1986. Since then, it has grown
exponentially as a result of a variety of factors, including economic liberalisation and general
public awareness. According to World Bank statistics, more than a quarter of India's
population has access to some form of insurance. This insurance could be provided by the
government or by a private stand-alone health insurer.

India's insurance industry is comprised of 57 insurance companies. 24 are life insurers, while
the remaining 34 are non-life insurers. Life Insurance Corporation (LIC) is the sole public-
sector life insurer. In the non-life insurance segment, there are six public sector insurers. In
addition, there is only one national re-insurer, the General Insurance Corporation of India
(GIC Re). Agents (individual and corporate), brokers, surveyors, and third-party
administrators who handle health insurance claims are among the other stakeholders in the
Indian insurance market.

Private out-of-pocket payments are the primary source of health-care financing in India. In
fact, India has one of the highest per capita private healthcare expenditures in the world. This
private financing system creates financial barriers to care and can have disastrous
consequences for families in need of hospital care. Health insurance has long been regarded
as an important tool for addressing health-care financing issues. It is especially important in a
country like India, where per capita income is extremely low and a large population lives
below the poverty line.

Health insurance is a financial mechanism that protects people from catastrophic financial
burdens caused by unexpected illness or injury. A well-functioning insurance system ensures
that resources are pooled to cover risks. Today's demand for health insurance in India is being
driven by the growing affluence of the Indian middle class, as well as lifestyle-related
diseases and rising healthcare costs. The establishment of new hospital chains with a focus on
holistic well-being is exacerbating this demand, particularly in urban areas.

8
In fiscal year 2018, the Indian health insurance sector had a market value of approximately
370 billion Indian rupees. This was expected to exceed two trillion rupees by the fiscal year
2030.

Non-life insurers (general insurers, standalone health insurers, and specialised insurers)
increased gross direct premiums by 5.19 percent in FY21. The private sector's market share
in general and health insurance has increased from 47.97 percent in FY19 to 48.03 percent in
FY20.

In India, the health insurance industry is the fastest growing segment of the non-life insurance
sector. In FY 17, the market experienced robust double-digit growth of 24 percent, with a
market share of 24 percent in the entire non-life insurance sector. For the past ten years, it has
been the fastest growing market segment, with a CAGR of 23%. This phenomenal growth
can be attributed to the economy's liberalisation and the general public's growing awareness
of healthcare issues.

9
TYPES OF HEALTH INSURANCE

10
 KEY PLAYERS IN INDIA

• General Insurance Corporation of India.

• Life Insurance Corporation of India.
• India - Insurance Regulatory and Development Authority (IRDA)
• Insurance Institute of India.
• United India Insurance Company Ltd.

STANDALONE HEALTH INSURANCE COMPANIES IN INDIA

• Max Bupa Health Insurance.

• Care Health Insurance.
• Star Health and Allied Insurance.
• Manipal Cigna Health Insurance.
• Aditya Birla Health Insurance.

11
 MARKET LEADER OF HEALTH INSURANCE SECTOR IN INDIA.

In terms of providing quality healthcare through its various health insurance products, Star
Health is the market leader in India, with a market share of approximately 0.46 percent held
by Max Bupa.

12
 NEED FOR HEALTH INSURANCE IN INDIA

Many ailments are treatable in India thanks to advances in medical science, but the cost of
treatment is what pinches your pocket. As a result, it is critical in India for people to
purchase a health insurance plan to secure their medical needs.

• Lifestyles have evolved. Indians today are under a great deal of stress. Working long
hours, getting little exercise, ignoring a healthy balanced diet, and relying on junk
food as a result have weakened our immune systems and put us at risk of contracting
illnesses.
• Rare noncommunicable diseases are becoming more common. Obesity, high blood
pressure, strokes, and heart attacks, which were previously thought to be uncommon,
are now affecting an increasing number of urban Indians.
• Medical care is incredibly overpriced. Cure for deadly diseases has been achieved
thanks to medical discoveries. These remedies, on the other hand, are only offered to
a chosen few. Because of the high running and treatment costs, this is the case.
• The financial strain is increased by indirect costs. Indirect costs like as travel,
boarding and housing, and even a temporary loss of income contribute for up to 35%
of the total cost of treatment. When it comes to medical bills, these details are
sometimes disregarded.
• Financial planning that is not complete. The majority of us have insurance for our
home, car, children's education, and even our retirement years. However, we have not,
ironically, taken out health insurance. We overlook the fact that sicknesses can come
without notice, having a negative effect on our finances and depleting our savings if
we don't have decent health insurance or medical insurance.

According to the February 2003 issue of Money Digest. One out of every three people
will acquire a life-threatening cancer. Before they retire, one out of every four people will
get heart disease. One in every twenty people has a probability of getting a stroke before
they reach the age of seventy. According to a World Bank report, 85 percent of India's
working population does not have access to Rs. 5,00,000 in cash. 14 percent have Rs.
5,00,000 right away, but will run into financial difficulties later. Only 1% of the
population can afford to spend Rs. 5,00,000 on the spot. In the event of a catastrophic

13
sickness, 99 percent of Indians will be financially strained. As a result, health insurance is
required.

14
 VARIOUS HEALTH INSURANCE PRODUCTS OF INDIA

Health insurance plans and policies are currently offered by a variety of companies and
can be broadly categorised as follows:

➢ Hospitalisation :
Hospitalization plans are indemnity plans that cover the costs of hospitalisation as
well as other medical expenses incurred by the covered individual during the
hospitalisation. These strategies could be adopted on an individual or family level. In
the case of an individual basis, just that particular individual's hospitalisation bills will
be covered under that coverage. If the entire family is covered, then any of the
members can take advantage of this benefit. In most cases, hospitalisation insurance is
non-cash.

➢ Family Floater Health Insurance :

A single plan covers the entire family under a Family Floater Health Insurance plan. It
is based on the assumption that not every member of a family would become unwell
at the same time. This form of insurance would be provided by health insurers who
have a good network of hospitals to provide optimal services in an emergency.

➢ Pre-Existing Disease Cover Plans :

This plan protects the policyholder against diseases that have already been identified
in the patient before the policy is taken out. Diabetes, heart disease, liver disease, and
other disorders are examples of these diseases. Chronic diseases are the nature of
these illnesses.

➢ Senior Citizen Health Insurance :

Health insurers should provide policies that cover individuals' health benefits until
they reach the age of 65, according to IRDA recommendations. Individuals over the
age of 65 can purchase this plan, which covers all diseases associated with ageing.

15
➢ Maternity Health Insurance :
These plans cover you for the whole maternity term as well as any additional
expenses. It covers both prenatal and postnatal care, as well as any fees paid during
the baby's delivery, whether natural or not.

➢ Hospital Daily Cash Benefit Plans :

This is a well-defined policy that pays a set amount of money to the patient on a daily
basis during his or her stay in the hospital.

➢ Critical Illness Plans :

This is a well-defined policy that pays a set amount of money to the patient on a daily
basis during his or her stay in the hospital.

➢ Pro-active Plans :
These are tailored programs and regimens that take into account all elements of
health, including medical, behavioural, and lifestyle factors. These services assist a
person in better managing and understanding their health.

➢ Disease Specific Special Plans :

These plans assist individuals in managing unforeseen medical expenses emerging
from epidemics such as dengue fever, and in managing and treating them at a low
cost. These programs give help based on medical needs, behavioural needs, and
lifestyle issues related to epidemics that are discovered suddenly.

16
 GOVERNMENT INITIATIVES

Governments all across the world strive to offer high-quality healthcare to their residents.
Raising public awareness about health issues, creating a robust infrastructure, and
encouraging health insurance are just a few of the government's positive actions for the
people's welfare.
A Government Health Insurance Scheme (GHIS) is a state or federal government-run
program offers health insurance to its citizens. Its purpose is to improve the healthcare
quotient in the region by offering low-cost insurance policies with a big sum insured. These
plans are frequently accessible on a year-to-year basis.
The following is a list of India's 16 government-sponsored health insurance schemes:

1. Ayushman Bharat :
This initiative was created as a result of recommendations made by the National Health
Policy. With Universal Health Coverage in mind, the Ayushman Bharat Yojana was
launched (UHC). Ayushman Bharat aims to improve India's health care system, which is
largely fragmented. It's about taking a holistic approach to the health industry and
ensuring that the people of India receive consistent care.
Health and Wellness Centers (HWC) and Pradhan Mantri Jan Arogya Yojana are two
components of Ayushman Bharat (PM-JAY). 150000 HWCs have been constructed to
give better healthcare to the general public. HWCs are reincarnations of earlier projects
like Sub Centers and Primary Health Centers. At a premium of Rs. 30, it provides a health
insurance cover of Rs. 5 lakhs per family per year.

2. Awaz Health Insurance Scheme:

The Kerala government created this healthcare program for migrant workers. It also
covers workers who pass away as a result of an accident. The scheme was launched in
2017 with the goal of assisting 5 lakh inter-state migrant labourers working in Kerala.
Awaz Health Insurance offers health insurance coverage of Rs.15000 and death insurance
coverage of Rs.2 lakh. This coverage is available to workers between the ages of 18 and
60. They will be provided an Awaz Health Insurance card after submitting and processing
enrolling details such as biometric information and other work-related documents.

17
3. Aam Aadmi Bima Yojana :

The Aam Aadmi Bima Yojana (AABY) is for those who labour in a variety of trades,
including carpentry, fishing, and handloom weaving. There are a total of 48 different
professions to choose from. Prior to 2013, AABY and Janashree Bima Yojana were two
comparable initiatives. (JBY). In 2013, JBY and AABY merged. A Rs.30,000 insurance
coverage has a Rs.200 annual premium. You must be a family head or an earning member
of your family (living on or near the poverty line) and work in one of the 48 vocations
listed to be eligible for this policy.

4. Bhamashah Swasthya Bima Yojana :

The Rajasthan government promotes insurance initiatives for its inhabitants through the
Bahmashah Swasthya Bima Yojana. For Rajasthan's rural population, this is a cashless
claims scheme. To engage in this Policy, you must be at least 18 years old. Participants in
the National Food Security Act (NFSA) and the Rashtriya Swasthya Bima Yojana are
also eligible for this insurance coverage (RSBY). This plan covers hospitalisation costs
for both general and catastrophic illnesses, according to the terms and conditions. Both
in-patient and out-patient treatment are covered.

5. Central Government Health Scheme (CGHS)

As the name says, this policy is initiated by India's central government. The federal
government's employees are covered under this policy. Judges of the Supreme Court,
Railway Board officials, and others are just a few examples. This policy, which covers
around 35 lakh employees and retirees, has been in place for over six decades. This plan's
terms and conditions cover both inpatient and outpatient care. The Central Government
Health Insurance Scheme covers both allopathy and homoeopathy. It's available in 71
cities right now, with ambitions to extend to more.

6. Chief Minister’s Comprehensive Insurance Scheme

The state government is in charge of this initiative. It is being promoted by the Tamil
Nadu government in conjunction with United India Insurance Company Ltd. The Chief
Minister's Comprehensive Insurance Scheme is a floater plan that offers high-quality
health care to families. You can claim up to Rs. 5 lakh in hospitalisation expenses with
this plan. A number of government and commercial hospitals are included in this scheme.
Residents of Tamil Nadu who earn less than Rs. 75000 per year are eligible for this

18
 scheme. More than a thousand operations are covered by the Chief Minister's
Comprehensive Insurance Scheme.

7. Employees’ State Insurance Scheme:

Following India's independence, many people went to work in factories. As a result of the
working conditions, there were also injuries and deaths. This is when the concept of
insurance became useful. Employees' State Insurance Scheme (ESIS) was founded in
1952 to cover insured workers/employees financially in the event of illness, incapacity, or
death. Only Kanpur and Delhi were examined at first, but the scheme's scope extended
over time. This policy was upgraded in the year 2015. More than 7 lakh factories are
presently part of this campaign.

8. Karunya Health Scheme:

Kerala's government initiated this project in 2012. The Karunya Health Scheme intends to
provide health insurance to people suffering from a variety of chronic illnesses. It's a
critical illness plan for the poor that covers catastrophic illnesses like cancer, kidney
disease, and heart difficulties, among others.
This insurance is accessible to persons who are impoverished or on the verge of becoming
poor. An Aadhaar Card and a valid Income Certificate are required for this plan. There
were rumours that this programe was being phased out, but they were just that: rumours.
The scheme continues to operate.

9. Mahatma Jyotiba Phule Jan Arogya Yojana:

This plan was implemented by the Maharashtra government in order to better the lives of
the state's underprivileged. The Mahatma Jyotiba Phule Jan Arogya Yojana was renamed
Mahatma Jyotiba Phule Jan Arogya Yojana in 2017. This scheme is open to farmers from
specified districts, as well as people living on or near the poverty level in all districts. It's
a family plan with a benefit of Rs. 150000. Unless otherwise specified, the diseases
mentioned as plan inclusions will be covered right away, with no waiting period.

10. Mukhyamantri Amrutum Yojana:

The Gujarat government introduced the Mukhyamantri Amrutum Yojana in 2012 for the
benefit of the state's underprivileged population. This insurance is provided to lower-
middle-class households as well as those who are poor. This policy gives a yearly cover
19
 of Rs. 3 lakhs for a family floater. Treatment can be found in a variety of venues,
including public hospitals, private hospitals, trust-based hospitals, and Grant-in-Aid
institutions, among others.

11. Pradhan Mantri Suraksha Bima Yojana :

The purpose of this scheme is to give accident insurance to Indian nationals. Only 20% of
Indian individuals were insured by insurance in 2016, according to a study. On the other
hand, the Pradhan Mantri Suraksha Bima Yojana seeks to improve this statistic. Anyone
with a bank account between the ages of 18 and 70 is eligible to apply. This policy
provides annual coverage of Rs. 1 lakh for partial disability and Rs. 2 lakhs for total
disability/death at a premium of Rs. 12. The premium is debited from the insured's bank
account automatically.

12. Dr YSR Aarogyasri Health Care Trust Andhra Pradesh State Government:
In conjunction with the Dr YSR Aarogyasri Trust, which works in the field of health care,
the Andhra Pradesh government has developed four helpful welfare initiatives. These
plans cover a wide range of people and offer support when they are in need.

The four schemes are as follows:

1) Dr YSR Aarogyasri – This scheme is dedicated to the welfare of the poor.
2) Aarogya Raksha – This scheme is designed to benefit people Above Poverty Line
(APL).
3) Working Journalist Health Scheme – This scheme is for journalists and it offers
cashless treatment in case of listed procedures.
4) Employee Health Scheme – This scheme is for the benefit of state government
employees.

13. Telangana State Government – Employees and Journalists Health Scheme:

This health plan is available to Telangana government officials and journalists. It is
beneficial to both employed people and those who have retired and are pensioners. The
scheme's highlight is the cashless treatment. If the prerequisites and restrictions are met,
beneficiaries can go to partner hospitals and get cashless treatment for specific therapies.
This is advantageous to the recipients since they will not have to hustle to obtain funds for
medical expenses in the event of an emergency.
20
14. Rashtriya Swasthya Bima Yojana:
This scheme is for people who work in the unorganised sector. Frequently, they are not
covered by any insurance policy. If they become ill in this situation – which happens
frequently – their savings will be exhausted. As a result, they can never be certain that
they have sufficient funds in the bank. Having health insurance can help in this situation.
The Rashtriya Swasthya Bima Yojana was launched by the Indian government's Ministry
of Labour and Employment. This program covers people who work in the unorganised
sector and are poor. The policy also covers their family (maximum of five members).

15. Universal Health Insurance Scheme:

Many developed and developing countries throughout the world have health-care plans in
place for their poor citizens. All of this and more is what India's Universal Health
Insurance Scheme aims to achieve. This program is open to the poorest of the poor aged 5
to 70. The Universal Health Insurance Scheme provides individual and group health
insurance. Accidents, hospitalisation, and incapacity are all covered. The premium is
determined by the size of the family. Those who are destitute must present proper
documentation in order to be covered.

16. Yeshasvini Health Insurance Scheme:

The Yeshasvini Health Insurance Scheme is promoted by the Karnataka State
Government. It is designed for farmers and peasants who are members of a cooperative.
Over 800 operations are covered by this insurance policy (orthopaedic, neurology,
angioplasty, and so on). Cooperative societies support peasants and farmers in enrolling
in the Yeshasvini Health Insurance Scheme. Beneficiaries get access to health care
through network hospitals. The scheme's advantages are extended to the main
beneficiary's family members as well.

21
• Top Government Health Insurance Plan Features and Benefits:

1. Low-cost policies are available.

2. Encourages those living in poverty to get insurance.
3. Ensures that the impoverished have some form of insurance.
4. Policies put in place by the government assist policyholders in feeling secure.

22
 ENTRY OF BANKS INTO HEALTH INSURANCE.

Health insurance is a popular product offered by a variety of insurance firms. With the recent
growth in health insurance obligations, even banks have begun to offer their customers
various sorts of coverage.

Given the rising number of persons diagnosed with lifestyle disorders, health insurance is
quickly coming up to the prominence enjoyed by life and motor insurance. With the rising
cost of medical treatment, acquiring proper medical assistance has become prohibitively
expensive, and many Indians are now purchasing health insurance coverage to help cover the
expense.

While there are a number of public and commercial health insurers on the market that offer
complete plans, banks are steadily emerging as a viable alternative to insurance firms. While
this may appear surprising, the connection between banking and insurance has existed for
some time, with nationalised banks offering a variety of insurance products to their account
holders.

Banks' health insurance programs are generally tie-ups with insurance firms, with the bank
acting as an intermediary. In most cases, insurance providers customise plans for bank
customers based on a prior agreement between the two sides.

As a result, the policies are restrictive, and most are group health insurance policies with
limited possibilities. These policies are also limited to bank account holders, which means
that if a customer closes his or her account with the bank for whatever reason, the insurance
will be cancelled.

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 IMPACT OF COVID 19 ON HEALTH INSURANCE SECTOR.

This era of global pandemic has had a negative impact on a large population, and many
people have lost loved ones as a result. A patient with coronavirus disease demands rapid
medical attention, however people have suffered due to a lack of financial assistance and
adequate treatment. In the event of a medical emergency, people with health insurance
coverage receive financial assistance as well as high-quality treatment. This has helped
people realise how important it is to have health insurance that covers hospitalisation in the
event of a medical emergency.

Hospitalization costs, tax benefits, healthcare checkups, ambulance fees, room rents, and
other advantages are all included in a health insurance plan and can be claimed by
policyholders at the time of claim settlement of the purchased health insurance cover.
COVID-19 therapies are now covered by health insurance plans, and the IRDAI has
mandated insurers to include COVID-19 coverage in all policyholders' regular health
insurance policies.

Hospitalization costs, tax benefits, healthcare checkups, ambulance fees, room rents, and
other advantages are all included in a health insurance plan and can be claimed by
policyholders at the time of claim settlement of the purchased health insurance cover.
COVID-19 therapies are now covered by health insurance plans, and the IRDAI has
mandated insurers to include COVID-19 coverage in all policyholders' regular health
insurance policies.

During the coronavirus outbreak, health insurance firms have seen a significant increase in
medical coverage queries, with 30 to 40% more customers seeking coverage against the
COVID-19 virus, which has infected over 96000 people in India and 4.71 million people
worldwide. Many insurance companies are creating specific plans to ensure that the affected
are covered. Some insurance companies have launched plans that cover infants as young as
one day old up to senior citizens as old as 75 years old, regardless of travel or medical
history.

Furthermore, according to a recent declaration by the Finance Minister, government

insurance firms will offer Rs.50 lakh as part of a custom-made comprehensive personal
accident cover for public health care personnel in the event of an unintentional death due to
Covid-19 infection. 22.12 lakh private healthcare employees, public and community
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healthcare providers who are actively involved in the care of Covid-19 patients will be
covered. It will be good for 90 days beginning March 30, 2020. And the premium is normally
in the range of Rs. 200 to Rs. 2500.

The health insurance sector has been completely digitalized, with health insurance policies
purchased and renewed through the insurer's official website. The sale of health insurance
policies has risen considerably in recent years as consumers have realised the need of having
financial backup in the event of a medical emergency. Even in times of economic hardship
for businesses, the health insurance industry has persevered and grown to meet the needs of
clients and global trends.

The following are some of the important points that show how the coronavirus
pandemic has affected India's health insurance sector:

1) Claim Payouts :
IRDAI has mandated and advised health insurers to incorporate COVID-19 coverage in
all policyholders' regular health insurance plans. Since the treatment of coronavirus is not
covered by active medicines, these claims by customers place additional loads on
insurers' books, especially if they are not treated at government facilities. The number of
claims for other diseases has also increased, as persons with severe diseases such as
diabetes, respiratory disorders, and other chronic illnesses are more likely to be diagnosed
with coronavirus. In addition, the health insurance carriers may suffer major financial
issues as a result of the expansion of the grace period for renewal to 30 days.

2) Development of Products:
The health insurance providers have made certain changes and transformations in their
health insurance products to meet the expanding and exclusive wants of policyholders.
Some insurers have created separate extra benefits, while others have incorporated these
protections into their standard health insurance policies. These developments have been
made to meet the expectations of customers, and numerous elements such as a quick
waiting period, broad coverage, and protective gear charges, among others, have been
incorporated in all of the basic health insurance covers.

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3) Boosted Sales:
People have realised the necessity of having financial backups in case of medical
emergencies, and as a result, an increasing number of people are purchasing health
insurance coverage for themselves and their loved ones. Customers have a wealth of
options in the insurance industry from which to pick.

4) Reserve Requirements:
Due to the worldwide pandemic's economic crisis, India's government has lowered repo
rates and bond interest rates, potentially posing issues in managing reserves, credit risks,
and liquidity threats, among other things.

5) Premium Payments in Installments:

Following the COVID-19 outbreak, health insurance companies began allowing people to
pay their premiums in instalments. This feature aids policyholders in avoiding financial
exhaustion by making health insurance policies more reasonable and covering a plan with
a large sum promised. The premium can be paid in four instalments: quarterly, half-
yearly, monthly, and annual.

6) Digitalization of The Sector:

Customers' KYC can now be completed online without the need for physical signatures or
in-office paperwork, according to health insurance carriers. Customers have benefitted
from this shift because it has made things easier and more accessible.

The global epidemic has resulted in several changes in various industries across the
country, including the health insurance industry. The health insurance industry has
changed for the better in many ways, but it has also encountered obstacles, and it
continues to serve its policyholders with modesty and honesty.

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 FUTURE OF HEALTH INSURANCE AFTER COVID-19

Following the global pandemic of COVID-19, the health insurance market has
undergone a dramatic transformation, as individuals have realised the value of health
insurance coverage in the event of a medical emergency. Investments in the health
insurance sector have increased in recent years, and health insurance providers have
implemented a variety of improvements to meet client demands during the pandemic.
All insurers must incorporate COVID-19 specialised plans in their standard health
insurance plans, according to the IRDAI.

Insurers have made it easier for policyholders to make digital premium payments,
purchase and renew health insurance policies online, and so on. Following the
epidemic, people are purchasing comprehensive health insurance plans for their
complete family at an affordable price. In order to increase their sales, insurers are
developing exclusive plans with unique features to meet the needs of their consumers.

India is one of the countries hardest afflicted by the coronavirus. The global pandemic
has had an impact on several businesses, including health care. During the COVID-19
epidemic, many businesses and sectors are in the midst of transition and are looking
forward to conforming to the new standards. Similarly, the health insurance industry
has demonstrated its value by introducing COVID-19-specific health insurance
products and offering policyholder support. Many plans are available, including
disease-specific plans, critical illness plans, and so on.

Positive Changes In The Health Insurance Sector Due To COVID-19

1) The selling of health insurance policies has increased significantly in recent years,
which has benefited both clients and insurers. Health insurance providers with
exclusive facilities and benefits, on the other hand, are in higher demand than the
others.
2) The health insurance industry has seen a tremendous transformation towards
digitalization, with the ability to purchase, renew, and compare health insurance
policies all being made possible online. Customers can now easily purchase and

27
renew policies through the health insurance provider's official website. It relieves
customers of the burden of paperwork and paperwork. Payments can also be made
online through secure transaction gateways.

In India, the insurance business is predicted to increase by 280 billion dollars by 2020.
The recent improvement under the scheme Ayshman Bharat, which was launched in
2018, ensures that more than 100 million economically poor families are covered for
Rs. 5,00,000.

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 GROWTH OF THE HEALTH INSURANCE SECTOR

According to Global Data, a prominent data and analytics organisation, health insurance in
India is expected to expand by 10% in 2020, besides the impact of Coronavirus (COVID-19).

Increased consumer awareness as a result of the epidemic is likely to enhance health

insurance retail sales in India. The rise of the health insurance market contrasts with the
general insurance market in India, which is predicted to contract by 9% by 2020 due to the
economic impact of COVID-19.

"The coronavirus pandemic has driven demand for health insurance in an otherwise under-
penetrated insurance market," says Jeneshree Sahoo, Insurance Analyst at Global Data.
People in India have realised the need of buying a health insurance plan as the number of
coronavirus cases has increased."

Insurers are also being encouraged by the regulator to create short-term COVID-19 policies,
which are in high demand among consumers. For example, Star Health, ICICI Lombard, and
Edelweiss General Insurance all provide low-cost COVID-19 diagnosis and treatment
insurance policies.

The health insurance business is also likely to benefit from recent regulatory requirements on
product standardisation. Insurers are required to issue standard indemnity plans to vulnerable
consumer categories such as healthcare workers from July 10, 2020.

All of the aforementioned factors are predicted to help India's health insurance market, which
is expected to increase by 10% to INR576.0 billion by 2020. This favourable trend in health
insurance sales is backed up by data from Policybazaar, one of the top online insurance
marketplaces, which recorded a 30% increase in health policy sales in March 2020 compared
to January-February 2020.

"The pandemic resulted in a short-term spike in demand for health insurance in India,"
Jeneshree concludes. Over the forecast period, insurers' initiatives to introduce need-based
products, rising consumer awareness, and the usage of tech-based distribution solutions are
projected to keep the growth trend going."

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 ISSUE AND CHALLENGES

• The issues surrounding health insurance

Do not make a fake claim since once the limit has been reached, you may not be able to
submit a second real claim in the same year. In the event of an unusual claim, the insurance
may also increase the amount of future premiums.

Because each actor in the health insurance market stands to make a lot of money, there are
sure to be lapses, if not open fraud. Here are some examples of how gamers abuse health
coverage, as well as some preventative methods.

1) Third Party Administrators (TPAs)

The most significant issue with them is the lengthy turnaround time (TAT). For cashless
treatment, the TAT for payment of an insured patient's treatment in a connected hospital
is 20 days. Even if the insurance company has paid them, most TPAs fail to meet the
deadline. This is due to the logistical challenges of dealing with several hospitals and
claims. Some hospitals feel irritated by the wait and refuse to provide cashless treatment.
In addition, while most insurers work on Saturdays, certain TPAs do not. This causes
claims to be processed more slowly.
Solution: Insurance firms such as Bajaj Allianz, Cholamandalam MS, and Star Health
have chosen direct claim settlement over TPAs.

2) Hospitals
If you have health insurance, an empanelled hospital will almost certainly charge you
more. Higher rates for insured patients result in higher payouts for insurance
companies, which leads to higher premiums. The growth is more than the rise in
medical care costs. Another concern is hospitals and patients abusing group insurance.
Because many group insurance plans' identity cards lack photos, uninsured people are
treated.
Solution: Insurers have begun to visit hospitals to consult with patients about group
insurance claims. If the original company is proven to be at fault, the group insurer
refuses to renew the insurance. In addition, for procedures and treatments, most insurance
now opt for pre-agreed rates. This eliminates the need for various tariffs for insured and
uninsured patients. Extra charges are billed directly to the patient by the hospital.

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3) Customers
Many people are hospitalised for an illness that does not require it. Another issue is that
they take a policy after a disease has been diagnosed. Health insurance does not cover
pre-existing diseases. Also, patients do not read the policy document and expect all
expenses within the limit of the cover to be reimbursed.
Solution: Before purchasing a policy, read the whole policy document. Request the
'policy wordings' from your salesman. Do not make a fake claim since if the limit has
been reached, you may not be able to submit a valid second claim in the same year. In the
event of an unusual claim, the insurer may also raise future premiums.

4) Companies
Salesmen missell items to avoid pressure from their superiors and to gain incentives. For
a bigger commission, a bad product is sometimes sold. Clients fall prey to the salesperson
and do not acquire the proper policy because firm Websites and brochures do not provide
all of the provisions of the plans.
Solution: Clients who are interested in learning more should ask for further information.
Irda's efforts to make brochures and other promotional materials more transparent will aid
in this effort.India's biggest healthcare concerns are frequently noted as rising population
and medical pricing. These issues will grow even more difficult in the future. According
to a UN estimate, India is on track to surpass China as the world's most populated country
in the next decade. According to the Willis Survey, medical inflation in India could reach
10.50 percent in 2019. As a result, these two fundamental concerns in healthcare will be
problematic in the short and long term. But that isn't the case.

5. Medical Expenditure.

Unpredictable medical costs push them into the sands of poverty. It's impossible to get
out after you've gone in. With depleted funds and crippling debt, such families have few
options for escaping this emergency-induced tragedy. The World Health Organization
(WHO) recognises this issue and has chosen Universal Health Coverage as the topic for
World Health Day 2019. This involves raising awareness about everyone having

31
equitable access to health care. In India, such out-of-pocket medical payments are a big
healthcare issue.

Top 5 healthcare challenges in India.

1) Preventive Care:
When it comes to health problems, home remedies are sometimes the first line of
defence. While home remedies may be effective for mild illnesses, they can be
harmful in situations where immediate medical assistance is necessary. Also, relying
solely on videos and materials readily available on the internet might be dangerous.

2) Rural Infrastructure:
When it comes to healthcare infrastructure, there is a huge disparity between urban
and rural areas. Physicians, dispensaries, hospitals, and other services are
concentrated in cities, leaving rural areas mostly unserved. The state of India's rural
infrastructure is so bad that there is just one government hospital bed for every 2000
residents.

3) Public Welfare:
Subsidies and increases in welfare expenditures are two examples of government
actions that benefit citizens. The government continues to churn out public assistance
systems, but are they adequate to meet the expanding population? Is there a sufficient
number of trained medical experts across the country to meet the residents' health
needs? Is technology being used to its full potential to promote rural penetration and
increased awareness of preventive measures?

4) Low Medical Insurance Coverage:

India is one of the countries with the lowest per capita healthcare spending in the
world. According to a Forbes report, more than 75% of Indians do not have health
insurance. In the absence of the financial cushion offered by medical insurance,
savings are depleted in order to address medical difficulties.

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5) Interlinked Issues:
As the preceding sections demonstrate, India's major healthcare concerns are
intertwined. Solving one or two problems will not suffice. All of these difficulties
require a strategy level adjustment to be addressed. Perhaps the emergence of digital
infrastructure will have a significant impact on the quest to find a solution to these
massive problems. In India, digitization can be viewed as a key enabler in overcoming
severe healthcare challenges.

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 TAX BENEFITS

The majority of financial advisers recommend that the first step in any financial strategy be to
make sure that you have adequate health insurance. Even before beginning to save for one's
goals, one must have proper health insurance coverage for oneself and one's family.
Furthermore, paying a health insurance premium gives a financial benefit by lowering your
taxable income and, as a result, your tax responsibility.

1. Parents:
You can deduct the premiums you pay for your parents' health insurance policy under
Section 80D of the Income Tax Act. Individuals who pay for their own, spouse's,
children's, and parents' health insurance premiums are eligible for the benefit. It makes no
difference whether the children or parents are reliant on you or not.

The amount of the tax benefit, on the other hand, is determined by the age of the
medically covered person. The maximum deduction available on premiums paid for self,
spouse, children, and parents is Rs 25,000 per year, provided the individual is under the
age of 60. The highest premium paid by a person for a health policy for a parent who is a
senior citizen aged 60 or more is restricted at Rs 30,000. As a result, a taxpayer can
maximise his or her tax benefit under section 80.

2. Riders for life insurance companies:

Because the Section 80D tax advantage is based on the premium paid for a health
insurance policy, it is not limited to health insurance firms. The premiums paid for critical
sickness or medical insurance riders in a life insurance policy are likewise tax deductible
under this clause. Furthermore, premiums for life insurance company's health insurance
plans are also eligible for the same tax break.

3. Health check-ups:
Preventive health check-ups are eligible for a benefit of up to Rs 5,000 up to a maximum
of Rs 25,000 or Rs 30,000. This means that if you pay a Rs 20,000 Mediclaim premium
and a Rs 5,000 health check-up, you can claim a total of Rs 25,000 under section 80D.
Preventive health checkup packages are available at most well-known hospitals. With the

34
 prevalence of lifestyle diseases on the rise, it's always a good idea to keep an eye on one's
health.

4. Both types of health insurance have an axe benefit:

Health insurance plans that are classified as 'indemnity' or 'defined benefit' would be
eligible for a tax break. Indemnity plans, such as individual health insurance plans known
as Mediclaim and Family Floater plans, as well as defined benefit plans, such as daily
hospital cash plans and critical illness plans, offered by any standalone health insurance
company or general insurance company, would be eligible for a tax benefit.

5. Cash payment:
While it is possible to pay a premium in cash, the income tax laws do not allow for a tax
benefit on premiums paid in cash. To gain a tax break on premiums, you can pay via
Internet banking, check, draught, or even credit card. Cash payment for a preventive
health checkup, on the other hand, is qualified for the section 80D benefit.

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 RECOMMENDATION

1. The claim must be investigated right away. This will allow insurers to put a stop to
the widespread use of unfair practises and dishonest methods of submitting claims in
this industry.

2. The health insurance market is failing to attract the younger generation. As a result,
entry-level pricing depending on age may appeal to this demographic. After ten years
of continuous coverage, an individual insured at the age of 30 will pay a lower
premium than someone purchasing a policy for the first time at the age of 40.

3. More people will be drawn into insurance coverage as more people become aware of
tax planning and tax savings. Furthermore, products should be designed with the
variations in income tax provisions under the Income Tax Act in mind.

4. Between insurers and policyholders, there should be more and more transparency.

5. The minimum mandatory rural presence should be increased from its current level to
encourage insurers to expand their business there, as insurers still regard it as a loss-
making business.

6. The small villages should be merged into one large village to increase policy coverage
and make it easier to capture new markets.

7. COVID 19 outbreak in India has led to a spike in health-care costs in the country. As
a result, an increase in premium charges must be considered in order to see a bottom-
line improvement in this sector.

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 CONCLUSION

1. Given the need and health financing situation in India, it was expected that health
insurance would emerge as a significant component of the non-life insurance sector
and experience significant growth due to the market's huge potential combined with
the new products and efficiency that private players will bring.
2. Allowing other entities that provide health coverage, such as hospitals and/or
professional organisations, as well as self-insured health insurance schemes of Mutual
Benefit Associations and Cooperatives, to participate would expand the reach and
depth of private health insurance.
3. The current study clearly shows that a large proportion of the population is still not
covered by health insurance products. However, over the last few years, this sector
has seen rapid growth.
4. This industry is prone to claims, and its bottom line is constantly under pressure. In
recent years, the IRDA has taken a risky step by raising the premium rates for health
insurance products. This will aid in the expansion of this industry.
5. With improved technological expertise from foreign partners and IRDA involvement,
India's health insurance sector must turn around and begin to earn a profit.
6. The COVID-19 pandemic is a challenge for the health insurance industry on multiple
fronts, while also providing an opportunity for insurers to attract new customers.
7. The study will significantly contribute to the existing literature and assist insurance
companies in understanding their performance and taking the necessary steps to
correct the situation.

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 BIBLIOGRAPHY

https://www.emerald.com/insight/content/doi/10.1108/XJM-07-2020-0021/full/html

https://www.financialexpress.com/money/insurance/key-developments-in-the-indian-
insurance-industry-in-2020/2161488/

https://www.bankbazaar.com/health-insurance/how-good-are-medical-insurance-plans-by-
banks.html

https://www.stellarisvp.com/reimagining-health-insurance-for-india/

https://www.careinsurance.com/blog/health-insurance-articles/health-insurance-in-india-
know-what-are-the-challenges-to-its-awareness

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PLAGIARISM REPORT

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