Abstract
Following the implementation of insurance reforms in India, new health insurance policies were introduced that were previously unavailable. India has a relatively low proportion of healthcare spending compared to other developing countries, as a percentage of its Gross Domestic Product (GDP). Owing to the rapid growth in the health care industry, there has been a surge in the demand for health insurance products. Given the rising demand for healthcare services in India, it is crucial to examine the variables that drive the demand for health insurance. Owing to the inadequate healthcare infrastructure in India, the private healthcare sector has gained significant prominence, leading to a rapid rise in per capita healthcare costs. The affordability of healthcare has grown increasingly challenging for individuals belonging to the lower-middle and middle socioeconomic classes. This has enhanced the level of awareness regarding the importance of getting health insurance as a safeguard against unexpected healthcare expenses in the near future. I hypothesize and suggest that an increase in the cost of health insurance would prompt individuals to recognize the significance of unexpected financial burdens associated with healthcare expenses, hence motivating them to get health insurance policies. Given the current trend, it appears that the cost of healthcare is increasing. In India, there is a growing awareness among people regarding the purchasing of health insurance. The shift in lifestyle after COVID motivates individuals to seek medical care at upscale healthcare facilities. The combination of this aspect and the increasing inflation is prompting individuals to acquire health insurance. The findings of this study would assist insurers and financial policy makers in devising effective measures to enhance the adoption of health insurance.
Keywords: Health Insurance, Consumer Behavior, Premium
References
1) Agarwal, D (2006): 'Health Sector Reforms: Significance in India', Indian Journal of Community Medicine, Volume 31, Issue 4, months of October to December, 2006.
2) Cardon, James H.; Hendel, Igal (2001): The National Medical Expenditure Survey: Evidence of Asymmetric Information in Health Insurance, The RAND Journal of Economics, Vol. 32, No. 3, pp. 408-427.
3) Cawley & Philipson (1999) present a study titled "An Empirical Examination of Information Barriers to Trade in Insurance" in The American Economic Review, Volume 89, Number 4, September 1999, pages 827-846.
4) Cutler, D. M. and R. J. Zeckhauser (1998): "Health Insurance Adverse Selection Process." Frontiers in Health Policy Research, volume 1, issue 2.
5) David Card, Carlos Doblikin, "The Influence of Health Insurance Status on the Level of Treatment Use and Health Results", August 2007 This is a working paper from the NICHD-funded RAND Population Research Centre.
6) Article titled "Sources of Advantageous Selection: Evidence from the Medigap Insurance Market" by Fang, H., M. P. Keane, et al. (2008) published in the Journal of Political Economy, volume 116, issue 2.
7) Gupta, Hima (2007): 'The position of insurance in the management of healthcare in India,' International Journal of Health Care Quality Assurance, Volume 20, Number 5, pages 379-391.
8) International Institute for Population Sciences (IIPS), (2010), Household and Facility data at the district level.
9) Jullien, B., B. Salanie, et al. (2003): Working paper titled "Screening Risk-Averse Agents Under Moral Hazard: Single-crossing and the CARA Case."
10) Jütting, J. P. (2004): How might community-based health insurance schemes enhance the accessibility of healthcare for impoverished individuals? ‘Evidence From Rural Senegal’, World Development, volume 32, issue 2, pages 273–288.
11) Kickbusch, Ilona, and Payne, Lea (2003): 'Twenty-first-century health promotion: the convergence of the public health revolution and the wellness revolution', Health Promotion International, Volume 18, Issue 4, pages 275-278, July 2003
12) Koufopoulus, K. (2005): Understanding the relationship between asymmetric information, heterogeneity in risk perceptions, and insurance: A comprehensive analysis, Working Paper.
13) Lamiraud, K., F. Booysen, et al. (2005): 'The Influence of Social Health Protection on the Availability of Healthcare, Expenditure on Healthcare, and the Condition of Impoverishment', from the Extension of Social Security Papers: 23, ILO.
14) Kakila, M. (2013). Penetration of the Health Insurance Sector in the Indian Market. International Journal of Management Opinion, third issue, number 1.
15) Memon, Sharif. (2011): 'A Comparative Study of Health Insurance in India and the US'. IUP Journal of Risk & Insurance, Volume 8, Issue 4, pages 47-60 November 2011.
16) In their presentation at the XXVII IUSSP International Population Conference in Busan, Korea, Mr. Shijith and Dr. T.V. Srikhar presented new findings from nation-wide surveys on the recipients of health insurance coverage in India