Why do you need health insurance - explained using 'data'

health insurance Oct 28, 2019

You must have seen a lot of health insurance ads on TV with old people, walking sticks and a whole lot of emotions. Insurance companies always try to make an ‘emotional' pitch to convince people to buy health insurance. In this article, we try something different by using published data to make a case for 'health insurance'.

1. Indians pay for hospitalization out-of-pocket

Studies by World Health Organization show that Indians spend the highest proportion of medical expenses out-of-pocket. Compared to a US or a UK, where people spend only 10% of their hospitalization expense out-of-pocket, India spends a whopping 60%.

Source: World Health Statistics Report, WHO

Indians who don’t have health insurance end up losing 60% of their hard-earned savings to out-of-pocket hospitalization expenses.

A recent study by National Sample Survey Office, Government of India, found that a whopping 92% of households in urban India pay for hospitalization either from savings or from borrowing from friends and family. Not having health insurance is a root cause of this problem.

82% of households in Urban India do not have any health cover.

2. Arranging emergency funds is a lot of mental stress

Amount of mental stress one has to go through to arrange emergency funds is usually overlooked. NSSO India has published an interesting dataset that shows how people arrange funds. 25% Indians go through a painful process of borrowing from friends & relatives or in the worst case, sell physical assets to finance hospitalization.

People borrow from friends & family and in the worst case, sell physical assets to fund hospitalization expenses

So the question is: Do you really need to go through such fire sale situations when you have an option to access a cashless facility where insurance firm takes care of everything without a single rupee flowing from your wallet. The answer is a resounding NO!

3. India has some air quality & pollution issues

Let's accept this - our environment is not the healthiest in the world. Indians are exposed to high levels of pollution the moment they step out of their home, office or school. A recent study by State of Global Air shows that India and China have the highest levels of particulate matter (read pollutants) in air, much higher than globally accepted norms. You can read our earlier blog on this subject here

India is already a ‘heart disease’ and 'diabetes' capital of the world and as per WHO, Indians have the highest risk of cardiovascular diseases because of lifestyle choices. An old but relevant study on this subject was done by India Today titled 'Men at Risk'.

In such an environment, it makes perfect sense for every Indian to have an active health plan in place that is a combination of fitness, nutrition and a good insurance backup.

3. Healthcare inflation is on the rise

While we always hear news of consumer price inflation, a less talked about phenomena is the medical inflation. This not only includes hospitalization costs but also expenses related to diagnostic tests and medicines.

Following data shows how healthcare inflation is increasing prices for some major surgeries.

While your income is increasing, your ability to meet emergency hospitalization expenses is dropping. Not having a health cover could mean a massive dent in your life savings and nobody wants to be in such a scenario.

Health insurance is a wise choice for every person who has a ‘plan’ in life – do you have one?

Arvi is India’s first smart and friendly health insurance assistant that can guide you with the ‘what’, ‘why’ and ‘how’ of health insurance. Chat with arvi and take the best health insurance decision that works for you.

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Sushant Reddy

Sushant is a serial entrepreneur who is passionate about transforming senior heatlhcare in India