Chapter 02

INDUSTRY PROFILE
Health insurance or medical insurance (also known as medical aid in South Africa) is a type
of insurance that covers the whole or a part of the risk of a person incurring medical
expenses. As with other types of insurance, risk is shared among many individuals. By
estimating the overall risk of health risk and health system expenses over the risk pool, an
insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to
provide the money to pay for the health care benefits specified in the insurance agreement.
The benefit is administered by a central organization, such as a government agency, private
business, or not-for-profit entity.

According to the Health Insurance Association of America, health insurance is defined as

"coverage that provides for the payments of benefits as a result of sickness or injury. It
includes insurance for losses from accident, medical expense, disability, or accidental
death and dismemberment"

A health insurance policy is a insurance contract between an insurance provider (e.g. an

insurance company or a government) and an individual or his/her sponsor (that is an
employer or a community organization). The contract can be renewable (annually, monthly)
or lifelong in the case of private insurance. It can also be mandatory for all citizens in the
case of national plans. The type and amount of health care costs that will be covered by the
health insurance provider are specified in writing, in a member contract or "Evidence of
Coverage" booklet for private insurance, or in a national health policy for public insurance.

Health Insurance Around the World

Health insurance is a system designed to cover the cost of medical expenses, either through
private insurance or government-sponsored programs. Globally, countries have adopted
various models to provide healthcare coverage to their populations, each with unique
structures and funding mechanisms.
1. Universal Health Coverage (UHC)

Many nations aim to achieve Universal Health Coverage, ensuring that all individuals have
access to necessary health services without financial hardship. Countries like France,
Germany, Taiwan, and South Korea have implemented UHC through systems that combine
public and private insurance schemes. For instance:

France: Operates a universal health insurance system where the government funds a
significant portion of healthcare costs, and citizens can opt for supplementary private
insurance to cover additional expenses.

Germany: Has a dual system where most citizens are covered by statutory health insurance,
while higher earners can opt for private insurance.

Taiwan: Introduced a single-payer National Health Insurance system in 1995, achieving near-
universal coverage with a high level of public satisfaction.

South Korea: Implemented a mandatory National Health Insurance program in 1989,

providing comprehensive coverage to its citizens.

2. Private Health Insurance Models

Some countries, notably the United States, primarily rely on private health insurance, often
employer-sponsored, to provide coverage. While this model offers a wide range of options, it
can also lead to disparities in access and affordability, especially for low-income individuals.

3. Mixed Systems :Countries like Switzerland and Singapore employ mixed systems where
basic health insurance is mandatory for all residents, and individuals can purchase additional
private insurance for enhanced coverage. These systems aim to balance universal access
with individual choice and competition among insurers.

Switzerland: Requires all residents to have basic health insurance, with premiums adjusted
based on income and age.

Singapore: Implements a mandatory health savings account system, complemented by

insurance plans to cover large medical expenses.

4. Low-Income and Developing Countries

In many low-income countries, access to health insurance is limited, and out-of-pocket

expenses can be a significant barrier to healthcare. However, some nations have
implemented innovative solutions:

Rwanda: Established a community-based health insurance scheme that covers a large

portion of its population, improving access to essential health services.

India: Launched the Ayushman Bharat Yojana (PM-JAY) in 2018, aiming to provide free
health insurance coverage to over 500 million people, making it the world's largest
government-funded healthcare program.

2.1 HEALTH INSURANCE IN INDIA

Health insurance in India is a growing segment of India's economy. The Indian healthcare
system is one of the largest in the world, with the number of people it concerns: nearly 1.3
billion potential beneficiaries. The healthcare industry in India has rapidly become one of the
most important sectors in the country in terms of income and job creation. In 2018, one
hundred million Indian households (500 million people) benefit from health coverage. In
2011, 3.9%of India's gross domestic product was spent in the health sector.
Policies are available that offer both individual and family cover. Out of this 3.9%, health
insurance accounts for 5-10% of expenditure, employers account for around 9% while
personal expenditure amounts to an astounding 82%. In the year 2016, the NSSO released
the report "Key Indicators of Social Consumption in India: Health" based on its 71st round of
surveys. The survey carried out in the year 2014 found out that, more than 80% of Indians
are not covered under any health insurance plan, and only 18% (government funded 12%) of
the urban population and 14% (government funded 13%) of the rural population was
covered under any form of health insurance.
Health insurance in India is a rapidly evolving sector, encompassing both public and private
initiatives aimed at providing financial protection against medical expenses. Here's an
overview based on information from Wikipedia:

 Overview of Health Insurance in India

India's healthcare system is one of the largest globally, serving nearly 1.3 billion people.
Despite this vast coverage, the health insurance penetration remains low, with only 18% of
urban and 14% of rural populations covered under any health insurance scheme .
The sector includes:
Private Insurers: Companies offering individual and family health plans.
Government-Sponsored Schemes: Initiatives aimed at providing coverage to economically
vulnerable populations.
Government Health Insurance Schemes
1. Ayushman Bharat Yojana (PM-JAY)
Launched: September 2018
Coverage: Aims to provide free access to health insurance for low-income earners, covering
approximately 500 million people.
Benefits: Offers cashless secondary and tertiary care services at empaneled public and
private hospitals.
Administration: Implemented by the Ministry of Health and Family Welfare through the
National Health Authority.
2. Rashtriya Swasthya Bima Yojana (RSBY)
Launched: April 2008
Target Group: Below Poverty Line (BPL) families
Features: Provides cashless hospitalization services in both public and private empaneled
hospitals.
Status: Transferred to the Ministry of Health and Family Welfare in April 2015
3. Vajpayee Arogyasri Yojana (Karnataka)
Target Group: BPL families in Karnataka

Coverage: Free treatment for 402 procedures, including cardiovascular diseases, cancer,
burns, and neonatal diseases.

Funding: 80% by the World Bank and 20% by the state government.

Benefit Limit: Up to ₹1.5 lakh per family, with an additional buffer of ₹50,000 on a case-to-
case basis .

4. Central Government Health Scheme (CGHS)

Beneficiaries: Serving and retired Central Government employees and their families.

Services: Provides medical consultations, medicines, and hospitalization services through

wellness centers and empaneled hospitals.

Subscription: Monthly contributions based on the pay level of the employee .

Wikipedia

5. Employees' State Insurance (ESI)

Coverage: Employees earning below a specified wage threshold
Benefits: Medical care, sickness benefits, maternity benefits, and more.
Infrastructure: Operates medical colleges and hospitals across India .

🧾 Regulatory Body
The Insurance Regulatory and Development Authority of India (IRDAI), established in 1999,
regulates and promotes the insurance industry in India. It oversees the licensing of insurers,
protects policyholders' interests, and ensures the growth of the insurance sector .
📊 Health Insurance Coverage in India
Despite the availability of various schemes, the overall health insurance penetration in India
remains low. In urban areas, approximately 18% of the population has health insurance
coverage, while in rural areas, it's about 14%

1. Health insurance in India

2. Ayushman Bharat Yojana
3. Rashtriya Swasthya Bima Yojana
4. Vajpayee Arogyasri Yojana
5. Central Government Health Scheme
6. Employees' State Insurance
7. Insurance Regulatory and Development Authority
Health Insurance Coverage in India:Stats from NSSO survey.

HEALTH INSURANCE IN KARNATAKA

History of Health Insurance in Karnataka
Karnataka has been one of the pioneering states in India to introduce cooperative and
government-backed health insurance schemes aimed at improving healthcare access,
especially for rural and economically weaker sections.

Early 2000s: Karnataka introduced one of India’s first cooperative health insurance schemes
called the Yeshasvini Health Insurance Scheme (2003), managed by the Karnataka Milk
Federation. It focused on providing affordable medical insurance for farmers and rural
cooperative members.

Mid 2000s onward: The state expanded public health insurance initiatives with schemes like
Vajpayee Arogyasri Yojana, which offered cashless treatment to Below Poverty Line (BPL)
families for serious diseases, supported partly by World Bank funding.

Recent years: Karnataka launched schemes like Arogya Bhagya Yojana to cover families not
eligible under central government schemes and the KSRTC Arogya Health Insurance Scheme
for government employees. The government also set up health helplines such as Arogyavani
(Dial 104) to support health awareness and services.
Key Features and Information
Yeshasvini Health Insurance Scheme:
One of the largest cooperative health insurance programs globally, it covers over 3 million
farmers and rural cooperative members. The scheme offers cashless treatment for surgeries
and hospitalization at empaneled hospitals with very low premiums.

Vajpayee Arogyasri Yojana:

Provides free treatment for 402 serious diseases, including cardiac, cancer, burns, and
neonatal care, for BPL families in Karnataka. It aims to reduce the financial burden of health
crises on poor families.

Arogya Bhagya Yojana:

Targets families not covered under Ayushman Bharat or other schemes, providing secondary
and tertiary care with cashless treatment.

KSRTC Arogya Health Insurance Scheme:

Specifically for Karnataka State Road Transport Corporation employees, offering
comprehensive medical benefits.
. Arogyavani Health Helpline
Arogyavani is a toll-free health helpline (Dial 104) established by the Government of
Karnataka. It operates 24/7, offering medically validated advice, information on health-
related schemes, health counseling services, and a platform to lodge complaints against
healthcare service providers.

The Ayushman Bharat – Arogya Karnataka (AB-ArK) scheme is a collaborative health initiative
by the Government of India and the Government of Karnataka, aiming to provide
comprehensive health coverage to residents of Karnataka.
Launch Date: March 2, 2018
To achieve Universal Health Coverage (UHC) by offering accessible and affordable healthcare
services to all residents of Karnataka.
Coverage: The scheme provides a health insurance cover of ₹5,00,000 per family per annum
for eligible households, including those below the poverty line (BPL) and those enrolled
under the Rashtriya Swasthya Bima Yojana (RSBY).
Key Features
 1. Comprehensive Care: Covers primary, secondary, and tertiary healthcare services.

2. Cashless Treatment: Beneficiaries receive cashless treatment at empaneled public

and private hospitals across Karnataka.

3. Minimal Enrollment Fee: Beneficiaries can obtain the Ayushman Karnataka card by
paying a nominal fee of ₹10.

4. Healthcare Infrastructure:
Karnataka supports these schemes with a network of empaneled public and private
hospitals providing cashless or subsidized treatment.

Regulatory Oversight:
Health insurance providers in Karnataka operate under guidelines set by the Insurance
Regulatory and Development Authority of India (IRDAI).

HEALTH INSURANCE IN KODAGU

DISTRICT
The District Health & Family Welfare Department provides services like Rural Health Services
and Urband Health Services through 29 PRIMARY HEALTH HOSPITAL AND 7 COMMUNITY
HEALTH CENTERS , 2 TALUK LEVEL HOSPITALS AND 1 DISTRICT HOSPITAL IN MADIKERI 24/7
MATERNAL SERVICES IN 9 PHC`S ARE AVILABlE.

The DISTRICT HOSPITAL IN MADIKERI 410 BEDED.The following Facilities are available at the
Hospital.

1. CASUALTY
2. TRAUMA CARE CENTER
3. NEONATAL REHABILITATION CENTER
4. NEONATAL INTENSIVE CARE UNIT
5. DAILYSIS
6. WELL EQUIPPED HITECH LAB I.C.T.C A.R.T S.T.D. etc.,
7. District Surgeon
Health insurance in Kodagu district, Karnataka, is facilitated through various
government-sponsored schemes and private insurance providers. an overview of the
available options:

1. Government-Sponsored Health Insurance Schemes:

1. Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (AB-PMJAY)

This national health protection scheme offers coverage of up to ₹5 lakh per family
per year for secondary and tertiary care hospitalization. In Kodagu district,
approximately 2.8 lakh beneficiaries have registered for the scheme. However, it's
noteworthy that, as of December 2024, no private hospitals in Kodagu are
empaneled under AB-PMJAY. Beneficiaries can avail themselves of the insurance
facility at the Kodagu District Hospital in Madikeri, which offers various modern
treatments.

2. Yeshasvini Health Insurance Scheme

This cooperative health insurance scheme is designed for farmers and members of
cooperative societies in Karnataka. It provides cashless treatment for over 1,650
medical procedures at network hospitals. Eligible members pay an annual premium
to avail of the benefits.

3. Vajpayee Arogyasri Yojana

Targeted at Below Poverty Line (BPL) families, this scheme offers free treatment for
402 procedures, including cardiovascular diseases, cancer, burns, and neonatal
diseases. The government directly pays the treating hospital, providing cashless
treatment up to ₹1.5 lakh per family, with an additional buffer of ₹50,000 on a case-
to-case basis.

2. Private Health Insurance Providers and Network Hospitals

Several private health insurance companies have a presence in Kodagu district,
offering cashless treatment at their network hospitals:

A.Star Health Insurance: Athreya Hospital in Virajpet is part of their network,

providing cashless services to policyholders.

B.Niva Bupa Health Insurance: Sri Rajarajeshwari Hospital in Kodagu is empaneled

under their network.

C.TATA AIG Health Insurance: Lifeline Hospital in Gonikoppal is included in their

network hospitals list.
D.IFFCO Tokio Health Insurance: Vivus Hospitals Pvt Ltd and Smitha Eye Care Center
in Madikeri are part of their network, offering cashless treatment options.
IFFCO Tokio

E.Public Healthcare Infrastructure in Kodagu

The District Health & Family Welfare Department in Kodagu oversees a network of
healthcare facilities, including:
29 Primary Health Centers (PHCs)

7 Community Health Centers (CHCs)

Sources{wikipediea}