Health Insurance Reaches More Homes, But The Fine Print Still Matters: National Family Health Survey-6

More households now have at least some health insurance protection, according to the latest National Family Health Survey-6. The survey says 60.2 per cent of households have at least one member covered under a health insurance or health financing scheme. In NFHS-5, carried out during 2019-21, the figure was 41 per cent.

That is a sharp rise. It also says something about how families are looking at medical costs now. Hospitalisation is no longer treated as an unlikely event that can be managed when it happens. For many households, a medical emergency is one of the biggest financial risks they face.

Part of this wider coverage has come through government-backed health schemes. Employer-provided group policies and retail health insurance plans have also played a role. The pandemic years, too, changed the way many people viewed health cover. Families that once postponed buying insurance began to see it as basic protection.

But the number needs to be read with care. The survey looks at whether at least one member in a household is covered. It does not necessarily mean that every family member has enough protection. Nor does it show whether the cover will be sufficient in a private hospital, during a long hospital stay, or for a major illness.

In other words, more homes may now be insured. But many may still be underinsured.

The Real Test Comes During A Claim

Health insurance becomes useful only when it works at the time of hospitalisation. This is where many families get a surprise.

A policy may have a sum insured that looks comfortable when it is bought. But hospital costs can rise quickly once room rent, diagnostics, medicines, consumables, doctor charges, ICU costs, and follow-up treatment are added. In larger cities, even a short hospital stay can run into a large bill, according to a recent report by NDTV.

There are also policy conditions that many buyers miss. Some policies have room rent limits. Some have co-payment clauses, where the insured person has to pay a part of the bill. Certain diseases may have waiting periods. Some procedures may have sub-limits. A few expenses may not be payable at all.

So, a household may be counted as covered, but the actual financial relief during treatment may be limited.

This matters even more for families with elderly parents, children, or members with existing health conditions. A low cover shared by several people may get exhausted quickly. Once that happens, the rest of the bill has to come from savings.

Employer Cover Should Not Be The Only Safety Net

Many salaried people depend on the health insurance provided by their employer. That cover is useful and should not be ignored. In many cases, it offers immediate protection and may include spouse, children, and sometimes parents.

But it should not be the only cover a family has.

Employer health insurance is tied to the job. If the employee changes jobs, loses the job, retires, or takes a break from work, the cover may stop. The amount of cover is also decided by the employer, not by the family’s actual medical needs.

For a young employee, this may not seem like an immediate problem. But buying a separate retail health insurance policy becomes harder with age and existing illnesses. Premiums rise, waiting periods apply, and insurers may ask for medical checks or impose conditions.

That is why families should use employer cover as a support, not as the full plan.

Families Need To Review The Cover They Already Have

The rise in health insurance coverage is a good sign, but the next concern is adequacy. Families should first check who is covered under the policy. They should then look at the sum insured, exclusions, waiting periods, co-payment, room rent limits, restoration benefits, and cashless hospital network.

It is also important to see whether the policy covers hospitals that the family is likely to use. A cashless network may look large, but the preferred hospital may still be outside it. In that case, the family may have to pay first and claim reimbursement later.

Those covered under government schemes should also understand the scope of the cover, eligible hospitals, and the claim process. A scheme can be extremely useful, but only if the family knows where and how to use it.

The NFHS-6 data shows that health insurance is entering more homes. That is the first step. The next step is making sure the cover is wide enough, usable enough, and clear enough to protect families when a real medical bill arrives.

FAQs

1. What does the NFHS-6 data say about health insurance coverage?

NFHS-6 shows that 60.2 per cent of households have at least one member covered under a health insurance or health financing scheme.

2. Does having health insurance mean the whole family is fully protected?

Not always. A household may be counted as covered even if only one member is insured, and the sum insured may still be too low for major hospitalisation.

3. What should families check in their health insurance policy?

They should review the sum insured, room rent limits, co-payment, waiting periods, exclusions, restoration benefits, and cashless hospital network.