Health Insurance: Shift From Reactive To Proactive Care

Traditionally, health insurance is seen as a financial safeguard to cover hospitalisation expenses during a medical emergency. That is why most health insurance companies talk about being efficient in providing timely financial support and not so much about the consumer's health.

Timely financial support during a health crisis is critical, but is this enough for a consumer?

The role of health insurance should be larger - playing a more pivotal and engaging role in partnering people in their health journey both in good times and during a crisis. Consumers today are more aware, and their expectations, especially after COVID, have witnessed a major shift. They are looking to get more value out of their health insurance and not just sickness funding.

According to our latest research, New Health Normal Report, 84 per cent of the participants believe that their awareness of health and wellness-related issues has increased post-COVID. More than half of the respondents (52 per cent) in our research claim to have set aside money to use in case of medical emergencies. Furthermore, 85 per cent of the respondents claim they would consider cutting down on some luxury items so that they could spend more on health insurance.

Fortunately, there is a growing recognition of the benefits of preventive health measures, which is now driving the health insurance industry to focus on proactive care rather than reactive care. The industry is gradually shifting towards a wellness-oriented approach, promoting healthy lifestyles and preventive care.

The principle of "health first and insurance later" underpins this evolution in the health insurance industry across the world. We at ABHI have pioneered this model of health insurance in India that transcends the boundaries of an indemnity-based model by focusing on proactive healthcare for our customers.

This philosophy is especially relevant in today's healthcare environment, where medical care costs are skyrocketing, and insurance coverage is often inadequate. Moreover, the ever-increasing threat of non-communicable diseases is just as worrying as the Covid-19 pandemic, which jolted people into a sudden realisation of the necessity for preventive healthcare measures and adequate health insurance coverage.

According to WHO, non-communicable diseases (NCDs) kill 41 million people globally each year, with heart disease being the leading cause. Modifiable behavioural risk factors, such as tobacco use, physical inactivity, unhealthy diet, and the harmful use of alcohol, all increase the threat of NCDs. Similarly, OPD or out-of-pocket expense today constitutes 60% of all healthcare expenses and are mostly not covered under normal mediclaim policies.

So, there is an increasing need to draw people's attention to these behavioural risks and incentivise them to modify their lifestyles. For instance, motivating people to adopt positive health behaviour, such as walking 10,000 steps daily, can help reduce the risk of diabetes, cardiac ailments, and asthma. Similarly, quitting smoking or reducing alcohol consumption can enhance their quality of life. It's amazing to see how such simple tweaks in lifestyle can make a huge difference.

To incentivize consumers to focus on a healthy lifestyle, some health policies offer discounts on renewal premiums or out-of-pocket expenses to policyholders who take steps to improve their health. There are also free vouchers or discounted memberships to gyms or yoga centres. Insurers also offer these fitness challenges on customers' mobile apps, and some even provide the convenience of syncing fitness-tracking devices with these apps.

These initiatives are in line with the new guidelines of the Insurance Regulatory and Development Authority of India (IRDAI) which aims to promote a culture of health and wellness among customers and encourage insurance companies to provide innovative wellness-oriented products.

This results in a win-win situation for all. With rising healthcare costs, purchasing a health insurance policy with a wellness program can help people save money on medical bills. It promotes their physical and mental well-being, provides access to quality care, and prevents chronic diseases.

The current ecosystem presents immense opportunities for health insurers, as they have a large untapped market to penetrate and grow. The current societal trends and AI-driven technical innovations are sure to mitigate these hurdles and boost the growth of India's wellness-oriented insurance product market, ultimately contributing to a healthier, wealthier India.

The author is the CEO of Aditya Birla Health Insurance Company Ltd.

(Disclaimer: Views expressed are the author’s own, and Outlook Money does not necessarily subscribe to them. Outlook Money shall not be responsible for any damage caused to any person/organisation directly or indirectly.)