Insurers in India are now offering COVID-19-specific health insurance plans called ‘Corona Kavach,’ as mandated by the Insurance Regulatory and Development Authority of India (IRDAI). These short-term health insurance plans have been specifically designed to cover the costs of COVID-19 treatment and are set to allow more citizens to access healthcare provision.
India’s healthcare system is free for those below the poverty line, but all other citizens are required to pay for the service. Citizens can choose to pay healthcare treatment as out-of-pocket expenses upfront or can take private health insurance to mitigate costs. According to GlobalData’s 2019 Global Banking and Payments Survey, private health insurance uptake in India is relatively high, with 78% of respondents in the country indicating that they had private health insurance in place in 2019. Uptake is highest among those aged between 25 and 54 but lowest among those in the 18–24-year-old cohort.
The first Corona Kavach plans became available in July 2020, with these set to provide an alternative to other private healthcare insurance solutions – namely, standard Mediclaim plans and comprehensive private healthcare insurance policies. The plans are open to adults aged 18–65 years of age. With data from Worldometer showing almost 1.6 million coronavirus cases in India and over 35,000 deaths as of July 30, 2020, the launch of Corona Kavach policies has been welcomed by Indian nationals. India’s aggregator, PolicyBazaar, reports selling between 300 and 500 such policies a day since they were first launched on its website.
But Corona Kavach plans have appealed the most to younger adults given their affordability, coupled with the lower uptake of health insurance policies than other cohorts of the population.
According to Max Bupa Health Insurance, 43% of individuals buying these policies are aged 18–30 years – many of whom are first-time buyers of a health insurance policy. An advantage of Corona Kavach policies is simplification, with IRDAI dictating that these plans offer uniform features, terms, and conditions among different insurers. The policy length is set at either 3.5 months, 6.5 months, or 9.5 months, inclusive of the 15-day waiting period. The COVID-19-specific plans cover hospitalisation expenses, home care treatment, and ambulance charges, but claims can only be made after testing positive for coronavirus.
The sustained spread of the virus coupled with a rise in fatality rates in India will continue to generate demand for health insurance products. Awareness of the treatment costs related to COVID-19 will further contribute to a greater uptake and will encourage younger adults to take out a health insurance policy for the first time. In addition, the pandemic is expected to shape customers’ attitudes towards private health insurance.