A centralised Health Savings scheme could bring major part of the population under health insurance
The out of pocket expenditure for healthcare expenses in India stands at 62 per cent of the entire expenditure. Further only 27 per cent of the population is insured. These are some of the key highlights of the ‘Health savings account in India’ report, a joint study by FICCI and KPMG.
The stress is on the fact that the healthcare sector in India is largely underpenetrated with the government expenditure only 1.4 per cent of the GDP. Also, at 62 per cent the out-of-pocket expenditure is more than three times the world average which is 18 per cent.
Healthcare expenses in India are largely focussed to cater to the in-patient or institutional expenses related to health care. But the non-institutional or out-of-pocket expenses is almost twice as much which leaves a big gap between the healthcare financing needs of an individual and what is on offer in current health insurance products. The key issues identified is thus the limited coverage of outpatient expenses and a comprehensive ecosystem to manage lifestyle conditions.
Based on the learnings from Health Savings account program in USA, Singapore and South Africa, the report recommends a centralised Health Savings scheme managed by a government nominated body or privately managed by insurers with centralised fund management. The report also takes a look at key regulatory interventions for ease of execution of either model and concludes by suggesting the introduction of a Health Savings Account (HSA) scheme linked to a high deductible health insurance cover, which will allow for end-to-end coverage of healthcare needs. This, in turn could be the catalyst to bring a major part of the population under the ambit of health insurance.