INSURANCE LAW

LAW 514

ROLE OF INSURANCE IN HEALTHCARE MANAGEMENT IN INDIA

Submitted to: Submitted by:

Ms . Aishwarya Pandey LL.B. 3 years

Assistant Professor SEM 4TH

(2021 – 2024)

Tanya Singh - A8156121015

Anjali Singh - A8156121029

 ACKNOWLEDGEMENT

I would like to express my gratitude to Asst. Prof. Palak Jawa ma’am who gave me the
opportunity to do this project. I am highly indebted to Amity Law School for their guidance
and constant supervision as well as providing information regarding the project and their
support in helping me complete the project

[Tanya Singh]

[Anjali Singh]
TABLE OF CONTENTS

1 . ABSTRACT

2 . INTRODUCTION

3 . RESEARCH

4 . CONCLUSION & SUGGESTIONS

 ABSTRACT

Nature is questionable and flighty. The equivalent is valid with the existence of a person who
is encircled by dangers and vulnerabilities in this unpredictable world. Any sort of disaster
might lead to minor to serious wounds or even a death toll. Illnesses also never thump our
ways to enter our bodies. Cash was and will always be unable to purchase life or fix illnesses
till the presence of this world yet to adapt to difficult situations in our day-to-day existence
and life of our precious ones when we leave for eminent abode, insurance is the ideal
arrangement. For the most part, protection is of two kinds: extra security and non-life
coverage or general protection. The current paper is an endeavor to frame the ongoing perfect
example of wholeness and well-being protection area in India which is a vital part of general
protection. Health care coverage area in India has acquired gigantic accelerations since
progression because of the presentation of private medical care finances, expansion in
wellbeing cognizance among all segments of the general public, expansion in the pay of the
families, cost and administration contest between wellbeing guarantors and nonappearance of
regulatory mentality in health care coverage representatives.

Keywords :-

India, Health insurance, Health services, Financing, Public health .

 INTRODUCTION

Life of an individual and a family is by and large tranquil except if any sort of medical
problem emerges which is indecisive and can't be anticipated before its event. Needs, for
example, want of claiming a house or an engine vehicle or some other instrument of
economic wellbeing or other shopper durables of solace can be delayed on the off chance that
the family has lack of reserve funds and restricted kinds of revenue. Yet, this isn't true with
the unanticipated clinical commitments which need prompt incomes and unfavorably affect
the investment funds of the family. Monetary responsibilities on clinical grounds can
unquestionably demolish long haul monetary objectives of a family which might incorporate
instruction or marriage of youngsters and retirement designs other than wants expressed
supra. One might ponder an answer for beat such circumstances and the solution to this is, in
all honesty, health care coverage which will help in support of good strength of an individual
and a family without making any chance of monetary emergency and preventing monetary
steadiness. Health care coverage is a result of general protection that covers costs connected
with drug and medical procedures of a guaranteed which could be an individual, family or a
gathering. It is a plan where an individual, family or a gathering buy medical care ahead of
time by instalment of an expense called a charge. As such, health care coverage is a plan that
assists with postponing, conceding, decreasing or staying away from instalments connected
with clinical costs of a safeguarded. The backup plan will either guarantee credit-only therapy
of clinical sicknesses or give a repayment of clinical costs caused under the strategy in any of
the organization's medical clinics the nation over.1 The World Wellbeing Association
characterizes wellbeing as complete physical, mental and social prosperity, not simply the
shortfall of sickness and injury (Parekh, 2003). Likewise, a country's wellbeing framework
involves every one of the associations, organizations and assets dedicated to create wellbeing
administrations.

Medical services has forever been a pain point for India, a country with an enormous
populace and a significant part living underneath the neediness line. Subsequently, medical
care access and value become significant issues, and health care coverage has not been

created to its tremendous likely on the planet's fifth biggest economy. An expected 1.3 billion
individuals overall need admittance to viable, reasonable medical care, while in excess of 150

1 https://icrier.org/pdf/Working_Paper_394.pdf
million individuals in 44 million families overall consistently face monetary ruin as an
immediate consequence of huge hospital expenses. However most policymakers have
expected up to this point that unfortunate families in agricultural nations - whose endurance is
shaky - wouldn't pay medical coverage charges even to prevent the expenses of future
hospitalization (Worldwide Gathering on Friendly Health care coverage in Emerging Nations,
2005). Insurance is a financial product that provides protection against various types of risks,
such as accidents, illness, property damage, or loss of life. It involves the transfer of risk from
an individual or business to an insurance company in exchange for a premium payment. The
basic concept of insurance is that many individuals pay a small premium to an insurance
company, which then pools these premiums together to pay for any claims that may arise.
The insurance company assesses the risk associated with the type of insurance being provided
and sets the premium rates accordingly. The insured person or business is then protected from
financial losses resulting from covered events or risks. Insurance can be broadly classified
into two categories: life insurance and non-life insurance. Life insurance provides financial
protection to the policyholder's family in case of the policyholder's death, while non-life
insurance covers a range of risks such as accidents, fire, theft, and liability . There are various
types of insurance products available in the market, including health insurance, car insurance,
home insurance, travel insurance, and business insurance, among others. The terms and
conditions of insurance policies can vary widely, and it is important to read the fine print
carefully to understand what is covered and what is not.

Overall, insurance provides individuals and businesses with financial security and peace of
mind in case of unexpected events or losses. By transferring risk to an insurance company,
individuals and businesses can protect themselves from financial ruin and ensure that they
have the resources they need to recover from a loss.

ELABORATION ON THE MEANING OF HEALTH INSURANCE

Health care coverage, the framework for the supporting of clinical costs through
commitments or duties paid into a typical asset to pay for all or some portion of well-being
administrations determined in an insurance contract or the law. The key components normal
to most health care coverage plans are settlement ahead of time of charges or assessments,
pooling of assets, and qualification for benefits based on commitments or business. Health
care coverage might apply to a restricted or extensive scope of clinical benefits and may
accommodate full or halfway instalment of the expenses of explicit administrations.
Advantages might comprise the right to specific clinical benefits or repayment to the
safeguarded for indicated clinical expenses. A few kinds of health care coverage may
likewise incorporate pay benefits for working time lost in view of disorder (i.e., handicap
leave) or parental leave. A medical coverage framework that is coordinated and directed by
an insurance agency or other confidential office, with the arrangements determined in an
agreement, is known as private, or deliberate, health care coverage. Confidential health care
coverage is normally funded on a gathering premise, however most plans likewise
accommodate individual strategies. Confidential gathering plans are generally supported by
gatherings of workers whose instalments might be sponsored by their boss, with the cash
going into an extraordinary asset. Protection of clinic costs is the most pervasive type of
private health care coverage inclusion; another sort is significant clinical cost assurance,
which gives security against huge clinical expenses however dodges the monetary and
regulatory weights associated with safeguarding little expenses.

Health care coverage strategy is an affirmation which gives prompt monetary assistance in the
event that when any health related crisis emerges. It is an agreement between a policyholder
and the insurance agency which covers clinical costs that could happen because of disease,
injury or mishap. On the off chance that you have a health care coverage strategy, some or
every one of the clinical costs will be borne by the insurance agency, against which a
protected should pay a specific sum known as charge. There are two different ways by which
the insurance agency make up for your clinical costs:

- Credit-only Treatment: Here, the policyholder shouldn't pay anything to the

organization clinic. As the insurance agency pays the emergency clinic
straightforwardly.

- Repayment: Here, the policyholder should settle their clinical costs first and later
request repayment from the insurance agency.2

2 https://www.forbes.com/advisor/in/health-insurance/what-is-health-insurance/
Healthcare insurance, also known as health insurance, is a type of insurance that covers
medical expenses incurred by the policyholder or insured individual. It is designed to provide
financial protection against the high costs of healthcare, which can be a major burden on
individuals and families. Healthcare insurance policies cover various medical expenses, such
as doctor visits, hospitalization, surgery, diagnostic tests, prescription drugs, and preventive
care. The terms and conditions of healthcare insurance policies can vary widely depending on
the type of policy, the insurance company, and the state or country in which the policy is
issued. Healthcare insurance can be provided by the government, private insurance
companies, or a combination of both. In some countries, such as Canada and the United
Kingdom, healthcare is provided by the government through a publicly funded system, while
in others, such as the United States, healthcare is provided by a combination of public and
private insurance. One of the primary benefits of healthcare insurance is that it can help
individuals and families manage the financial risks associated with unexpected illnesses or
injuries. Without insurance, people may have to pay out-of-pocket for costly medical bills,
which can quickly become unaffordable. Healthcare insurance can also help to improve
access to healthcare services by making them more affordable and accessible. With insurance
coverage, people may be more likely to seek medical treatment when needed, rather than
delaying or avoiding care due to cost concerns. Overall, healthcare insurance is an important
component of the healthcare system, as it helps to ensure that individuals and families have
access to the medical care they need, while also protecting them from the financial risks
associated with healthcare expenses

ROLE OF INSURANCE IN HEALTHCARE SYSTEM IN INDIA

Medical coverage in India is a developing section of India's economy. The Indian medical
care framework is one of the biggest on the planet, with number of individuals it concerns
almost 1.3 billion, possible recipients. The medical services industry in India has quickly
become quite possibly of the main area in the nation with regard to pay and occupation
creation. In 2018, 100,000,000 Indian families (500 million individuals) don't profit from
well-being inclusion. In 2011, 3.9% of India's total national output was spent on the
wellbeing area. Approaches are accessible that offer both individual and family coverage. Out
of this 3.9%, health care coverage represents 5-10% of use, businesses represent around 9%
while individual use adds up to a bewildering 82%. In the year 2016, the NSSO delivered the
report "Key Signs of Social Utilization in India: Wellbeing" in view of its 71st round of
overviews. The overview done in the year 2014 figured out that, over 80% of Indians are not
covered under any medical coverage plan, and just 18% (government-supported 12%) of the
metropolitan populace and 14% (government-subsidized 13%) of the country populace was
covered under any type of wellbeing insurance.India's public health expenditures are lower
than those of other middle-income countries. In 2012, they accounted for 4% of GDP, which
is half as much as in China with 5.1%. In terms of public health spending per capita, India
ranks 184th out of 191 countries in 2012. Patients' remaining costs represent about 58% of
the total. The remaining costs borne by the patient represent an increasing share of the
household budget, from 5% of this budget in 2000 to over 11% in 2004-2005. On average,
the remaining costs of poor households as a result of hospitalization accounted for 140% of
their annual income in rural areas and 90% in urban areas.The healthcare system in India
faces several challenges, including inadequate infrastructure, shortages of healthcare
professionals, and high out-of-pocket expenses for medical treatment. In this context,
insurance plays a crucial role in providing financial protection and improving access to
healthcare services for individuals and families. Health insurance in India has seen significant
growth in recent years, driven by the government's push for universal health coverage and the
rise of private insurers. According to the National Health Authority, over 50 crore people in
India are now covered under various health insurance schemes.

One of the most significant benefits of health insurance is that it can help to mitigate the
financial risks associated with unexpected medical expenses. With insurance coverage,
individuals and families can access medical treatment without worrying about the high costs
involved. This, in turn, can help to reduce the financial burden on households and improve
their overall well-being. In addition, health insurance can help to improve access to
healthcare services by making them more affordable and accessible. With insurance
coverage, people may be more likely to seek medical treatment when needed, rather than
delaying or avoiding care due to cost concerns. This can help to improve health outcomes and
reduce the burden of disease in the population. Furthermore, insurance companies play a
critical role in the healthcare system in India by negotiating rates with healthcare providers
and coordinating care for their members. This can help to control costs and ensure that
individuals receive high-quality, cost-effective care. Insurers also offer value-added services
such as wellness programs, telemedicine, and cashless hospitalization, which can help to
promote preventive care and early detection of diseases.

However, the healthcare system in India still faces several challenges in terms of insurance
coverage. Many people, especially those in rural areas, are still not covered under any health
insurance scheme. Moreover, insurance penetration remains low in the country, with only
about 4% of the population covered under private health insurance plans.
 HEALTHCARE SYSTEM IN INDIA

The healthcare system in India is a mix of public and private healthcare providers, with the
government being the major provider of healthcare services. The system is characterized by
significant regional disparities in healthcare access, quality, and affordability.
The public healthcare system in India is administered by the Ministry of Health and Family
Welfare, and is made up of primary, secondary, and tertiary healthcare facilities. Primary
healthcare facilities are the first point of contact for patients, and include health sub-centers,
primary health centers, and community health centers. Secondary healthcare facilities provide
specialized care, such as district hospitals and medical colleges. Tertiary healthcare facilities
provide highly specialized care, such as super-specialty hospitals.
Despite the presence of a public healthcare system, many Indians choose to seek care from
private healthcare providers. The private healthcare sector is largely unregulated, and is
known for providing high-quality but expensive care. Private healthcare providers include
hospitals, clinics, and diagnostic centers, and are concentrated in urban areas.
One of the major challenges facing the healthcare system in India is the high cost of
healthcare, which can be a significant burden for low-income households. The government
has launched various initiatives to improve access to healthcare for all, such as the National
Health Mission, which aims to provide universal access to healthcare services.
Another challenge facing the healthcare system in India is the shortage of healthcare
professionals, particularly in rural areas. This has led to a lack of access to healthcare
services in these areas, as well as a higher burden of disease.
Overall, the healthcare system in India faces significant challenges in terms of access,
affordability, and quality. While the government has launched various initiatives to improve
the system, much more needs to be done to ensure that all Indians have access to high-quality
and affordable healthcare
 HEALTH INSURANCE PRODUCTS AVAILABLE IN INDIA

For the purpose of avoiding risk aroused of health issues, there are different type of policies
and plans for the risk coverage by public sector as well as private sector insurance companies.
The financial products offered by these companies regarding health insurance give protection
to individuals, family or group of persons. Different types of insurance plans have been
discussed as under:
1. . Individual health insurance plan This plan offers risk coverage to an individual towards
hospitalization and other incidental expenses during the course of hospitalization subject
to the sum insured.In this policy, one can buy different independent policies for each
member of a family. These plans are basically indemnity plans and are generally offered
on cashless basis.
2. Family floater health insurance plan In this policy, single sum insured covers all the
members of the family in one policy. The sum assured is available to any one member or
to all members in case of any eventuality during the term of the policy. The premium
amount paid under this policy is generally lower as compared to individual policies for
each family member under individual mediclaim policy.
3. Group medical plan These plans are generally taken by business owners, private
companies, government companies and departments, to provide a financial cover to their
employees and their dependent family members on nominal deduction from salary
towards premium

Unit linked health plan (ULHP)

In this form of health insurance, the insured gets the benefit of investment along with health
care coverage. In this plan, a part of premium paid is invested and the balance is used to buy
health cover. The return enables the insured to pay medical expenses over and above the sum
assured. These kinds of plans are new and considered to be under development stage in India.
Returns under a ULHP depend on the performance of stock market.

Critical illness plan

The expenses involved in treating a life-threatening diseases like cancer, organ failure,
permanent paralysis etc. are covered by a critical illness policy. The insured is paid a lump
sum amount on the diagnosis of any of the serious diseases covered in the policy document.
Super top up plan

These policies provide additional coverage to an insured over the regular policy and help in increasing the sum
insured. Super top up policies can be availed only after the sum assured in the basic policy gets exhausted.

Senior citizen health insurance plan

IRDA guidelines require health insurers to provide health insurance plans up to 65 years of
age. Various health issues arise in older ages that involve expensive treatments. Keeping this
in mind, health insurance companies have designed special health insurance plans for senior
citizens above the age of 65 years. The rate of premium in senior citizen health insurance
plans is generally higher as compared to other insurance policies.

Hospital daily cash benefit plan

As evident from the name itself, this kind of policy pays a definite sum of money for
everyday of hospitalization irrespective of the actual cost incurred by the insured.

Maternity insurance plan

These plans are specially designed for women planning to have a child or are bearing one.
This policy covers all expenses before and after the pregnancy, pre and post natal care,
expenses for delivery, nursing and consultation etc. The policy also includes congenital or a
critical disease diagnosed in the newborn child.

Personal accident plan

A personal accident insurance policy covers the expenses incurred on medical treatment of
injuries occurred due to an accident. This policy generally offers benefits against three events
that include total disability, partial disability and death. Besides individuals, these policies are

also offered for a group.

CONCLUSION
Health insurance in India is an unsaturated market to a large extent. This sector has a bunch
of opportunities as is the evident in the data shown above. The present study clearly indicates
that there is a large proportion of population still uncovered from the health insurance
products. However over a period of last years, this sector has witnessed rapid expansion.
Attracting from the potential growth in this sector, a good number of private health insurers
with foreign collaborations have been able to create their market share. Though the relative
share of indigenous public sector insurance companies has declined even then in absolute
terms their business (in terms of no. of policies and premium amount) has significantly
increased.Innovation in the health insurance products can be very significant in further
growth and development of this sector in India. Competition, which is predominant in the
health insurers, will also add in insuring new people enabling further penetration of health
insurance products among Indian population. Taking a health insurance cover and subsequent
payment of health insurance premium on regular basis is an easy way to mitigate any kind of
financial losses due to health issues in future which may affect peace of mind and health as
collateral. Thus, health insurance could be a breakthrough for common public at large who
can avail best in class medical facilities in any part of the country to the extent of sum assured
in the policy document without bothering to any loss of savings leading to financial and

mental disability.
KEY SUGGESTIONS

In a country like India, there is a need of universal health insurance program at low cost to be
made compulsory with an intention to insure each and every citizen of the country especially
people residing below the poverty line.
 Innovation in products and services catering to the distinguished needs of public will
definitely attract those who are still in dilemma. The health insurers are advised to
adopt new business models to enhance their customer base, revenue and business.
 Public health insurance companies are advised to be cautious in dealing with the
present and potential customers to eliminate any possibility of churn rate or customer
turnover.
 Health insurance companies should popularize health insurance portability by
highlighting their specialties and advantages to attract new customers.
 IRDA should frame policies to promote competition among health insurance sector
just like competition prevalent in telecom sector of the country.
 Both the Central and State governments should include chapters on insurance in the
textbooks at appropriate levels of education besides conducting awareness programs
at micro levels to inform public about the benefits of health insurance.