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What is micro health insurance and what it means for you?

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Micro health insurance plans provide insurance coverage to individuals living in rural sectors.

What is micro health insurance and what it means for you?
Authored by Dhirendra Mahyavanshi
India is predominantly a developing country wherein a major part of its population lives in rural areas. In the year 2019, the rural population in India accounted for 65.53 percent of the total Indian population as per the data furnished by the World Bank.
The rural population has limited income and more prone to illnesses and injuries. When a medical contingency strikes, the family finds it difficult to afford quality healthcare and so, proper medical treatments are usually given a miss. Especially in recent times when the rural population is being infected with COVID, having sufficient financial provision for meeting the medical costs has become necessary. This is where micro health insurance comes into the picture.
Micro health insurance is health insurance for the rural sector of India. Micro health insurance plans provide insurance coverage to individuals living in rural sectors.
Some of the salient features of these schemes are as follows:
  • Sum insured ranges from Rs 1 lakh to Rs 5 lakh for the PM JAY scheme.
  • The premiums are low allowing the rural population to easily afford the policy
  • The coverage is granted for one year
  • The policy can be taken on a family floater basis covering all the family members
  • Since the sum insured is low, no pre-entrance health check-ups are needed when buying the plan
  • Entry age is usually restricted to 65 years
  • Lifelong renewals are available under the plan
  • Coverage under micro health insurance plans
    Micro health insurance plans provide basic coverage benefits. These benefits include the following –
    • Coverage for pre-hospitalization expenses
    • Coverage for post-hospitalization expenses
    • Coverage for expenses incurred on hospitalization when the individual is hospitalized for 24 hours or more
    • Coverage for daycare treatments
    • Cost of the ambulance
    • Micro health insurance in India
      Currently, there are a few insurance providers that offer micro health insurance plans for the rural population of India. Such micro health insurance plans provide a good scope of coverage to the rural populace at extremely affordable premium rates. Such plans allow individuals in rural areas to afford health insurance and avail the necessary medical treatments without burning a hole in their pockets.
      Besides health insurance providers, the Government of India has also introduced many health insurance schemes for the poor and backward class individuals. One of the most recent and popular health insurance schemes is the Ayushman Bharat Scheme or the Pradhan Mantri Jan Arogya Yojana PMJAY). This scheme, launched by PM Narendra Modi, revolutionized health insurance for the low-income class individual. Under the PMJAY scheme, coverage of Rs 5 lakh is given to the family of each beneficiary per year for secondary and tertiary care.
      Another popular scheme is the Aam Aadmi Bima Yojana (AABY) scheme which provides health insurance coverage to individuals engaged in 48 specific occupations like weaving, fishing, handloom, carpentry, etc. This scheme also has a low premium rate and allows a good scope of coverage.
      While the PMJAY and AABY schemes are national health insurance schemes, there are State-specific schemes too which are promoted by the different States of India. All these schemes have one objective – to allow the rural and backward class individuals to avail of quality healthcare services without worrying about its affordability.
      Importance of micro health insurance in the Indian context
      With a major part of the population being rural, having suitable micro health insurance plans is important. Both the Government and insurance companies are doing their bit to offer comprehensive yet affordable health insurance plans for the people living in rural areas. The recent pandemic has caused the most severe loss to the rural populace as many have lost their source of income and are also falling prey to the infection.
      In these trying times, having access to a micro health insurance policy allows them to avail of proper medical treatments without straining their finances.
      There is, therefore, good potential for the growth and development of micro health insurance plans in India. Insurance providers are also expected to contribute to the growth of such plans so that health insurance penetration reaches even the grassroots level of the economy.
      Dhirendra Mahyavanshi is Co-Founder at Turtlemint - an InsurTech company

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