The Role of Micro Health Insurance in Minimizing Financial Risk
India is primarily a developing nation, with most of its citizens living in rural areas. According to figures provided by the World Bank, the rural population in India made up 65.53 percent of the country's overall population in 2019.
Rural residents have lower incomes and are more likely to get sick or hurt. When a medical emergency occurs, the family typically forgoes necessary medical procedures because they are unable to pay high-quality healthcare. Having enough money set aside to cover medical expenses has become crucial, especially in recent years as COVID has spread to rural areas. This is where the role of micro health insurance is relevant.
Health insurance for India's rural population is known as micro health insurance. People who live in rural areas can get insurance coverage thanks to micro health insurance programmes.
The Significance of Micro Health Insurance in India
Having appropriate micro health insurance coverage is crucial because a substantial portion of the population lives in rural areas. Offering comprehensive yet cheap health insurance policies for those residing in rural areas is a goal shared by the government and insurance providers. The rural population has suffered the most due to the latest pandemic as many have lost their livelihoods and are now becoming infected.
Micro, small, and medium-sized enterprises and households with low incomes are more vulnerable to risk, whether it relates to agriculture, property, health, or mortality. These risks also have enormous financial repercussions when people, businesses, and families continue to cope with them. Being able to get a micro health insurance policy in these difficult times enables people to receive appropriate medical care without putting a pressure on their finances.
Micro health insurance plans in India therefore have a lot of room to expand and flourish. In order to ensure that health insurance penetration reaches even the most basic levels of the economy, health insurance companies are also expected to contribute to the expansion of such programmes.
Micro Health Insurance Includes a Number of Aspects
1. Since this type of plan is a micro health insurance, the amount covered is constrained.
Typically, it ranges from INR 1 lakh to INR 5 lakh.
2. Because the rates are so inexpensive, people in rural areas may easily afford it.
3. The typical duration of the policy coverage is 1 year.
4. The entire family can be covered by a family floater health insurance policy.
5. The creation of specific insurance products is the core foundation on which micro health
insurance companies function.
6. Pre-entrance health exams are not required to purchase the plan, despite the plan's limited
number of coverage options.
7. There is a 65-year-old maximum age restriction.
8. It is renewable for a lifetime.
Advantages of Micro Insurance Programs
- The micro health insurance covers pre-hospitalization costs.
- Even after you have obtained insurance, there is typically a documentation requirement before you can make a health insurance claim. The release of post-hospitalization payments is facilitated by micro health insurance policies, which spare the customer the added inconvenience of such a drawn-out process.
- Micro health insurance also provides coverage for pediatric care.
- The insurance plans guarantee that the system will cover the cost of an ambulance.
- The majority of health insurance plans include a network of hospitals and clinics that may help the policyholder in an emergency.
What Health Plans are Currently Fall Under Micro Insurance in India?
Few insurance companies now provide micro health insurance coverage for India's rural residents. Such micro health insurance plans offer the rural population a wide range of coverage at incredibly low premium costs.
- The Government of India has developed numerous health insurance programmes for the underprivileged and members of the backward classes in addition to health insurance companies. The Ayushman Bharat Scheme, also known as the Pradhan Mantri Jan Arogya Yojana(PMJAY), is one of the newest and most well-liked health insurance programmes. This programme, introduced by Prime Minister Narendra Modi, changed health insurance for those from lower socioeconomic classes. The PMJAY programme provides coverage of INR 5 lakh per beneficiary's family per year for secondary and tertiary care.
- The Aam Aadmi Bima Yojana (AABY) programme, which offers health insurance coverage to people working in 48 particular occupations like weaving, fishing, hand looming, carpentry, etc., is another well-known programme. This programme also offers a reasonable premium rate and a wide range of coverage options.
While the PMJAY and AABY programmes are national health insurance programmes, there are also State-specific programmes that are supported by the various Indian States. All of these programmes are designed to give rural and low-income people access to high-quality healthcare without having to worry about cost.
Conclusion
Micro health insurance has helped a lot of people, and it has proven to be a profitable business in our nation. Due to heightened societal knowledge of numerous illnesses, people are taking a greater and more personal responsibility for their health and the health of their families. However, there is still a long way to go if we want to ensure that everyone has access to quality medical facilities. One such step in that direction is micro health insurance.
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Yes, the policyholder must be 65 years of age or younger. However, the plan can be renewed indefinitely without any issues.
This plan has a cap on the insured amount, which ranges from INR 1 lakh to INR 5 lakh.
Costs that are covered include:
- Pre and post hospitalisation costs
- Hospital bills, if the policyholder stays in the hospital for more than 24 hours
- The cost of daycare services
- Fees for ambulance services
- Treatment of children
The advantages are available to the entire family. When submitting an application, there is also the option to cover every family member by purchasing the full insurance as a family floater.
The Ayushman Bharat Scheme, also known as the Pradhan Mantri Jan Arogya Yojana or PMJAY, is one of the most well-liked health programmes. Particularly for members of the lower socioeconomic classes, this strategy has completely transformed the Indian health insurance industry. The policyholder only needs to pay INR 30 in premiums to be covered for up to INR 5 lakh under this plan.
Another programme that covers those working in 48 specified occupations, including carpentry, weaving, fishing, and hand looms, is the Aam Aadmi Bima Yojana initiative.