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Health insurance: prospects and challenges
MD KAWSER HOSSAIN
About 6.3 million people dropped below the poverty line due to healthcare spending in 2022, with 61 percent of the hospitalised patients finding themselves in financial trauma, according to the Bangladesh Institute of Development studies.
Not only did some have to sell their property, jewellery and other assets, many took on high interest loans in order to pay for healthcare.
And although the solution to mitigate this risk is health insurance, coverage in Bangladesh is lagging compared to neighbouring countries.
There are many barriers to expanding health insurance in the country, with the first being very poor awareness on the benefits of health risk management.
A majority of people in the private sector that are looking to make ends meet expect health insurance as a part of their employment benefits. As such, they typically do not feel inclined to get health insurance on their own.
Besides, endowment policies that provide maturity benefits have become extensively popular among the people, with most insurers now promoting these products more than health insurance.
This is because health insurance is a term policy that has no maturity benefit, making it less favourable for customers.
And unlike developed countries, Bangladesh has not imposed any policy that makes it mandatory for citizens to get health insurance.
Also, very few companies are providing health insurance as an employment benefit to their workers.
Moreover, there are not enough comprehensive policies in the market. Most life insurers only provide supplementary coverage, which is not sufficient to cover hospitalisation expenses.
Furthermore, Bangladesh does not have any standalone health insurance policy and the country even lacks a dedicated health insurance company.
Not to mention, health insurance advertising is poor as most insurers have no promotional activities.
Bancassurance is still a relatively new term in the country but surprisingly, many banks are not very intrigued to sell health insurance to their clients.
Meanwhile, only a few banks are promoting micro health insurance policies, but such schemes do not meet the clients’ needs.
Insurance penetration in Bangladesh stands at just 0.5 percent of its annual gross domestic product while life insurance coverage is ever poorer at 0.2 percent.
Astonishingly though, there are no statistics about health insurance penetration.
Against this backdrop, it may be prudent to make it mandatory to get health insurance.
There are also several ways to popularise health insurance, such as by selling more comprehensive plans with attractive features at both private and state-run insurers.
It is also vital for both the insurance regulator and all other stakeholders to vigorously promote the benefits of health insurance through various media, such televised advertisements and social media.
Additionally, health insurance claims need to be paid out faster.
A tax rebate facility should be introduced for health insurance in order to make citizens more inclined towards getting coverage.
For example, insured individuals in India can get annual tax deductions of INR 25,000 under section 80D of their constitution while the benefit is INR 50,000 for senior citizens.
All information on insurance claims should be stored on a single central server, from which insurers would be able to access their customer’s previous medical history and other pertinent information.
A platform called “National Health Claims Exchange” was recently launched in India for this purpose
In a nutshell, health insurance has tremendous potential in Bangladesh.
The author is the head of the health insurance department of Pragati Life Insurance Limited