The Hindu Business Line : Only 1.2% Indian households have health cover: Study

Kolkata, Oct. 7 While the average medical expenditure of an Indian household is 6.7 per cent of annual income, the penetration of health insurance in the country is only 1.2 per cent with an average sum assured of Rs 98,604, according to a survey by the National Council of Applied Economic Research (NCAER) in association with Max New York Life.

In comparison, health insurance penetration among households in the US is 84.2 per cent, the survey points out.

According to the nationwide survey of 63,000 households across 23 States, the overall health preparedness index is 0.547, which indicates that only in 54.7 per cent cases an average Indian household is “well planned” to meet major health expenses.

Out of an average annual income of Rs 62,114, an Indian household spends Rs 4,079 (6.7 per cent) as routine medical expenditure, the survey says. In the case of major sicknesses, however, the average annual medical expenditure is Rs 23,237, or nearly 37.4 per cent of annual income, it points out. Nearly 14 per cent of the surveyed households indicated that they had faced major illness at some point in life.

“People in India conceive health risks differently than the Western countries and unless faced with an emergency, they fail to realise the importance of prior planning,” said Dr Rajesh Shukla, project head, NCAER. People here also don’t plan well for the long term and mostly consider insurance as a tax-saving instrument while it should principally be viewed as a risk cover, he added.

The first measure taken to overcome major sickness also indicates lack of preparedness, Dr Shukla said.

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