Public vs. Private: Decoding the Pros and Cons of Health Insurance in India

Did you know that India is moving towards paperless health insurance through initiatives like Ayushman Bharat Digital Mission (ABDM)? Yes, very soon both public and private insurers will operate on a unified digital health ID system, which will make the claim process and hospital access smoother.

This article will educate you on what is public and private health insurance and their advantages and drawbacks. You can explore comprehensive health insurance policies from Bajaj General Insurance and select a sum insured tailored to your needs.

What is Public Health Insurance?

Public health insurance are insurance schemes that are funded by the Government of India for the betterment of the masses. They are directed at helping the economically weaker sections of the society. Such schemes charge little or no premium from the policyholders because the main aim of public health insurance is to ensure that all citizens of our country receive medical care and attention whenever needed, irrespective of their income level.

Public health insurance works in the following manner: If you seek treatment or undergo surgery at an empanelled hospital under a government scheme, you do not have to pay the hospital. The government pays the hospital directly the covered amount depending on the scheme.

The public health insurance schemes in India are:

• Ayushman Bharat – Pradhan Mantri Jan Arogya Yojana (PMJAY): The PMJAY provides health coverage up to ₹5 lakh per family per year and currently it covers more than 10 crore poor and vulnerable families across India.
• Employees’ State Insurance Scheme (ESIS): This scheme provides medical care and cash benefits to employees earning below a certain salary limit.
• Central Government Health Scheme (CGHS): This scheme is for central government employees, pensioners, and their families.
• State-Specific Health Schemes: Many states have their own insurance programs like Mahatma Jyotiba Phule Jan Arogya Yojana (MJPJAY) in Maharashtra and Bhamashah Swasthya Bima Yojana in Rajasthan.

Benefits of Public Health Insurance

• Many poor families are unable to afford health treatment due to the rising cost of medical expenses. Public health insurance schemes help the poor by providing them with basic and secondary care.
• It reduces the burden of medical treatments on families and prevents low-income groups from falling into poverty.
• It improves healthcare infrastructure in the country by supporting the establishment of hospitals in rural and semi-urban areas.
• The scheme covers major medical expenses like hospitalisation, surgeries, etc.

Disadvantages of Public Health Insurance

• Many government schemes have limited hospital networks; they have tie-ups with government hospitals or few private hospitals which may lack advanced facilities.
• The sum insured is low as the government has to look after the medical needs of crores of people.
• If you visit government hospitals, you will need to wait for a long time as they are crowded.
• There is a lack of personalisation, you cannot customise a plan as per your needs.
• The efficiency of such schemes is also dependent on the working of the state government and the quality varies across states.

What is Private Health Insurance?

Private health insurance is provided by private insurance players. They are not funded by any agency; you as a policyholder, pay the premium and in return the insurer promises to cover the medical expenses in case you need medical attention.

Private insurance works in this way: You select a policy on the basis of your needs and pay an insurance premium to the insurance company. If you want to seek medical treatment, you choose the network hospital of the insurer. The insurer settles the bill directly with the hospital, so you need not pay anything from your own pocket.

Example: Bajaj General Insurance provides comprehensive health insurance plans with a wide sum insured. You can choose a plan tailored to your needs and choose additional covers like maternity cover, critical illness cover, etc.

Benefits of Private Health Insurance

• Private health insurance offers wider and faster access to quality healthcare. You can get treatment for various types of illnesses, including critical illness, at the best and most advanced centres.
• It also covers wellness programs, health check-ups, etc. and encourages individuals to live a healthy life by offering discounts for maintaining a healthy lifestyle.
• You need not worry about finances as claims are settled quickly if you purchase health insurance from reputable insurers like Bajaj General Insurance. You just need to focus on recovery.
• Premiums paid towards health insurance cover are eligible for tax deductions under the Income Tax Act. It helps you save money.

Disadvantages of Private Health Insurance

• Private health insurance is costly as compared to public health insurance and may not be affordable for those with low income. Also, those with pre-existing conditions may need to pay an extra premium to cover the risk.
• Private insurance has a waiting period clause; maternity or pre-existing conditions have a waiting period that is specified in the policy.
• Some ailments or lifestyle related diseases may be excluded. So for complete coverage, you may need to buy top-up plan.
• With so many plans and features, it may be difficult to choose the right one and may confuse the policyholder.

Which One is Better?

The debate between public vs private health insurance depends on your level of income and health risk or pre-existing conditions.

If you belong to a low-income family group or live in rural conditions, get yourself and your family members enrolled in any of the public health insurance schemes you are eligible for.

But, if you are a salaried or self-employed individual and someone with pre-existing conditions, immediately purchase a private health insurance plan from a trusted insurer like Bajaj General Insurance for complete protection.

Conclusion

Thus, the decision whether to choose public or private health insurance is not absolute, but it depends on your own personal circumstances. You are not limited to just one option, as a government employee covered under CHGS might also buy a Bajaj General health insurance plan for broader family coverage. Similarly, someone who is a beneficiary may purchase a top-up plan for treatments that government schemes don’t cover.

But, remember, whether private or public, the key is to remain insured as medical emergencies do not announce themselves before arriving. So, the least you can do is to stay prepared and face the situation courageously.

FAQs

Who is eligible for public health insurance schemes in India?

Public schemes like PMJAY are meant for low-income families identified under government criteria. Other schemes like CGHS or ESIS are for government employees and workers in the organised sector.

What are the tax benefits of buying private health insurance?

Under Section 80D of the Income Tax Act, you can claim deductions up to ₹25,000 (and ₹50,000 for senior citizens) on premiums paid towards private health insurance.

Does public health insurance cover all medical expenses?

No, public schemes cover basic and secondary healthcare expenses but may not cover advanced treatments.

What happens if I don’t have any health insurance?

Without insurance, you’ll need to pay medical bills out of pocket which can be financially draining during emergencies.

*Standard T&C apply

**Insurance is the subject matter of solicitation. For more details on benefits, exclusions, limitations, terms, and conditions, please read the sales brochure/policy wording carefully before concluding a sale.

***Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on several secondary sources on the internet and is subject to changes. Please consult an expert before making any related decisions.