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Rising Healthcare Burden on Middle Class of India

By Dr.Mahboob Ali Khan Phd

When it comes to health insurance, how much you think is adequate?

Chances are you have no idea, and hence you are under insured.

BigDecisions.com, a personal finance advice platform today released

their 2015 health research report that says middle class Indians are

largely under insured for health insurance. The data shows that some

95% of the platform's users were not adequately insured, with 62% of

the 10,000 users having less than 50% of required health cover.

“An increased appreciation of rapidly rising healthcare treatment costs

does not seem to have translated into Indian consumers being better

prepared. This is either because we, as consumers believe that we're a

genetically healthy bunch or are unaware of just how expensive medical

procedures have become,”I think.

The key findings show: India has double digit medical inflation. On the

other hand, health cover is not adequate, and even employers' health

cover is insufficient in many cases, and individuals end up paying from

their own pockets many a times. And, even though the premiums for

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health insurance have remained relatively stagnant, it has been mainly

thanks to competition among the insurers.

According to the report: Over the last four years, premiums of most

insurers have increased only once - in 2014 - over the previous year,

reflecting a CAGR of 2.79% (for sum insured of Rs 2,00,000 and Rs

3,00,000) and 3.29% (for sum insured Rs 5,00,000 and Rs 10,00,00).

The report is based on a data from 10,000 consumers across eight major

cities, aged 25 to 45+ and in the income bracket ranging from Rs 6 to 36

lakh annually.Do you know if you and your family is adequately insured

for your health. Keep tracking this space as we bring you a Video on

how much medical insurance do I really need?

Escalating house rents; impossible real estate prices; increasing

commute costs; spiraling fuel rates; the sliding Indian rupee doesn’t

promise to go far for the middle classes in the near future. Even at 10 per

cent, consumer-price inflation in India shows no signs of slowing down

this financial year. In a scenario where it costs more to keep a job than

benefit from it, healthcare is what shakes an already unstable ship for a

majority of Indians.

In my survey it was found that with medical costs rising at a rate beyond

inflation and growing at over 10 per cent for four years in a row, the

burden of healthcare has become increasingly heavy on the middle

classes.

I think “Healthcare costs are rising

steadily and one sees no reversal of

this trend in the near future. In such

scenario unforeseen medical costs can

play havoc with the budgets and

future plans of households across the

country. The government expenditure

on healthcare is constrained by several

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factors and almost 80% of healthcare in the country is self-funded. One

startling statistic is that almost half the number of people who face

hospitalization have to sell a personal asset in order to meet the cost of

treatment.”

In a time when communicable and non-communicable diseases are both

on the rise, expensive healthcare spells trouble for financial stability. I

think “New generation antibiotics are becoming more expensive – as are

the tests and technology treatment options available.”

I also think “Medical treatment is becoming costlier for both,

communicable and non-communicable diseases. There are two reasons

for this - high cost for the existing treatment, which increases 5-10%

annually like inflation. Two - availability of newer treatments and

procedures, which we learn from the West and bring it here at high cost.

This includes newer drugs being launched like anti cancer drugs in non

communicable category and new antibiotics in communicable. Still, a

major rise is in the non communicable

category."

How does this affect the common

man? Quite adversely. Non-

communicable diseases and other

critical illnesses translate to serious

health conditions that require

expensive medical attention, the kind

that spells trouble for salaried folks.

Treatments for cancer, stroke, heart

transplants, kidney failures, and heart surgeries - among others – are not

merely expensive, they can prove to be crippling.

So what can you do about it? I think it best – “In such a scenario it is

absolutely critical to have health insurance to cover the cost of expensive

hospitalization. There are a number of plans available in the market;

however, the least one should be covered for is hospitalization and

surgical costs.”