India Health Insurance
The complete guide!

How does the state health insurance system work?

The Indian healthcare system is one of the largest in the world, but around 1 million of the country’s citizens do not benefit from health coverage. India spends around 1% of its GDP on healthcare: in global terms, this is very low. In 2014, an NSSO survey found that 80% of Indians did not have any health insurance cover. Only 18% (government funded 12%) of the urban population and 14% (government funded 13%) of the rural population was covered under any kind of health insurance.

There is technically a public healthcare system which offers universal care that is free at the point of delivery, but in practice most Indians end up using the private sector, in which quality and costs can vary considerably.

The federal states govern healthcare, including regional hospitals, clinics and national hospitals, and health insurance itself.

There are a number of national health insurance plans, which are still currently in place despite the introduction of a new scheme, which we will outline below. These are:

  • National Health Insurance Program (Rashtriya Swasthya Bima Yojana / RSBY): this was founded in 2007 and is governed by the Ministry of Health. The national government funds 75% and the individual states fund 25%. The scheme covers 29 federal states and is designed to provide insurance for one worker and four dependents, if they are not covered by an existing scheme and are below the poverty line. It covers around 40 million families.
  • Employees State Insurance / ESI: covering organized private sector workers, around 55 million people. This was designed for organisations with more than 12 employees whose monthly wage does not exceed Rs21,000. In practice, the majority of employed expats fall under ESI.
  • Central Government Insurance Scheme: covering central government agents and retirees, around three million people

There are also several federal schemes local to particular regions:

  • Andhra Pradesh: covering families below the poverty line or with annual income below INR 75,000. It covers around 70 million people.
  • Tamil Nadu: covers families below the poverty line or with annual income below INR 72,000: around 40 million people.
  • Karnataka: covering members of rural cooperatives, more than three million people.

However, the government announced in 2018 that it would be introducing a new, fully comprehensive health insurance scheme, colloquially called Modicare. Under the new scheme, organized by Ayushman Bharat National Health Protection Mission (AB-NHPM), around half a billion of India’s poorest people will be eligible for up to RS500,000/ $7,000 in hospital costs, financed by the government, and free to the patient.

The scheme also aims at a $165-million spend to establish 150,000 health and wellness centers across the country, offering comprehensive primary healthcare including free essential drugs and diagnostic services. The first of these was set up in April 2018. The scheme had a soft launch, anticipating being overwhelmed by high demand, but it has had its critics, who suggest that it was primarily a pre-election publicity exercise.

The government is anticipating an annual spend of $1.3 billion - $1.6 billion on the NHPM, financed by central and state governments in addition to union territories.

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Who is eligible for state healthcare?

The majority of the citizens who are covered by national health insurance schemes are below the poverty line, as the system was originally designed to assist those most in need and the NHPM is continuing along these lines.

The exception to this is the ESI: if you are an employee and earning less than INR15,000 per month, you and your employer will have to make compulsory contributions into the Employees State Insurance Corporation (ESIC). Contribution rates are set by law.

You can also sign up with Mediclaim, a range of policies which are provided by competing private insurers, but this covers only very basic treatment.

How do you apply to join the state health insurance system?

Contributions under ESIC are compulsory. Your employer should sign you up with the system, but make sure that they have done so as some expats have reported finding that they are not in fact registered with ESIC. If your employer has not registered you with ESIC, you will need to ask your company’s HR department to do this for you; you cannot sign up by yourself.

What is covered by the state health insurance system?

The national scheme mainly covers hospitalization and inpatient care. In practice, long waiting times have entailed that many Indian patients have sought private treatment.

Under ESIC you will be covered for:

  • some primary care treatment
  • maternity leave
  • physical disability or death due to employment injury resulting in loss of wages or earning capacity
  • sickness benefits at the rate of 70% (in the form of salary)
  • old age medical care expenses

If you have been covered by ESI but have now retired, either due to age or work-related disability, you may also apply for:

  • artificial limbs
  • dentures
  • spectacles
  • hearing aids
  • cardiac pacemakers
  • walking calipers
  • surgical boots
  • spinal supports
  • cerebral collars
  • intraocular lenses

Outpatient medical facilities under ESIC are available in 1,418 ESI dispensaries and through 1,678 private medical practitioners. You will be able to access care from 145 ESI hospitals and 42 hospital annexes (19,387 beds). Some state government hospitals offer beds exclusively for the use of patients under ESI.

The new scheme of the NHPM is intended to cover more than 1,350 procedures including cancer treatments, coronary bypasses, angioplasty and knee replacements, plus charges for pre- and post-hospitalization, diagnostics, and medication.

Indian women in certain professions will be covered by the Maternity Benefit Act, which covers a degree of pre- and post-natal care. If you are an expat and pregnant, it is recommended that you take out private maternity cover, but if you are a pregnant employee covered by ESI, you will be entitled to some benefits: namely your full salary (subject to your contributions) for at least 80 days in the preceding two consecutive contribution periods. You will also be entitled to confinement expenses of Rs 5000 (US$70), if birth occurs at a place where the medical facilities under the ESI scheme are not available.

Are retirees covered by state medical insurance?

You are unlikely to be eligible for national medical insurance and should therefore seek health cover from the private sector. There are some state-approved local private schemes which offer plans for senior citizens.

Are students covered by state medical insurance?

International students will not be covered by state medical insurance, and you are advised to take out a private plan to cover you during your time in India. There are policies available that are specifically tailored to international students, and your university or college may be able to advise you.

Will your family be covered by your insurance?

Under most of the national schemes, dependents are covered, but the scheme only applies if you are below the poverty line. Under ESI, your dependents will also be covered and should be able to access basic medical treatment.

In the local private sector, there are a range of ‘Family Floater’ policies, which cover households.

Is dental treatment covered by state health insurance?

If you are eligible for ESI you may be entitled to very basic treatment, although expats report that relatively few dental clinics accept ESI. It will not cover more advanced treatment such as dental implants.

India is currently a primary destination for private dental tourism, however, due to the comparatively low cost and high quality of dental treatments.

What are the contribution rates for state health insurance?

Under the ESIC, you will have to pay 5% of your income in order to be covered for ESI: 4% from you and 1% from your employer. However, India has reciprocal agreements with some other countries which mean that you will be able to keep making social security contributions into schemes in your home nation and will not have to pay twice. In this case, you are known as an ‘excluded employee.’

Countries include some European nations such as Norway, Germany and France, as well as Australia, but the list does not include the USA or the UK.

Why buy private health insurance?

The private sector in India constitutes 74% of hospitals and 40% of hospital beds. It is therefore large, usually of a high quality (particularly in large cities) and high-tech. Even if you are covered by ESI, waiting times and conditions in public hospitals are of a lower standard and you may therefore wish to consider comprehensive private insurance or top-up cover to plug any cost gaps. If you are not covered by any form of state insurance, you will need to take out private cover.

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What is covered by private health insurance?

Private health insurance will allow you to access better facilities and increase speed of treatment and diagnosis, in addition to covering areas such as outpatient treatment which are not currently within the remit of the various public schemes.

How much does private health insurance cost?

This will depend on factors such as your age and any pre-existing conditions, and the kind of package you opt for; a more expensive insurance package will give you more a extensive range of treatment and facilities. As so many variables have an effect on the cost of international private medical insurance in China, it becomes very difficult to give accurate estimates without knowing the full details of the coverage required. However, as a very rough guide, using a standard profile of a 40-year-old British male with no deductibles, no co-insurance, a middle-tier plan, all modules included and worldwide coverage excluding the US, a ballpark price of around £4,000/$5,000 might be expected. Were coverage to be expanded to include the US then the premium could increase to almost double that amount.

Which companies offer private health insurance?

The big international providers cover India, including:

  • AXA
  • BUPA
  • Cigna Global
  • Pacific Prime

And there are many local providers such as:

  • Religare Health Insurance
  • BAJAJ ALLIANZ Health Insurance
  • Star Health Insurance
  • Apollo Munich Health Insurance
  • HDFC ERGO Health Insurance
  • IFFCO Tokio Health Insurance

Glossary of health insurance terms

Ayushman Bharat (“Long-Life India” / AB-NHPM) - National Health Protection Mission

Employees State Insurance/ESI - covering organized private sector workers

Rashtriya Swasthya Bima Yojana/RSBY - National Health Insurance Program

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