Private Health Insurance and Health Costs

The IRDA Bill and the consequent opening up of the health insurance sector to foreign and private investors' raises several questions. Are Indians ready for private health insurance? Will there be demand from all sections of society? What would consumers look for when they 'purchase' insurance to cover future health risks, a concept hitherto non-existent in India? These are some of the questions this paper attempts to answer, based on data collected in Delhi from about 500 households. The study found a wide disparity across sections on willingness to participate. The challenges for the new system would be to pool individuals across risk and economic status categories; set up a multi-tier system to meet objectives of equity and efficiency in health care delivery and for planners and regulators, to keep health insurance separate from other non-health insurance.