What is the History of Health Insurance in India?

The history of health insurance in India is only a few decades old. However, mentions of this kind of cover are entrenched in our history, with traces found in writings of Yagnavalkya (Dharmashastra), Manu (Manusmithi), and Kautilya (Arthashastra). In the modern era, the earliest roots of health insurance in the country can be traced back to the era after Indian independence. Many government schemes were then introduced from 1948 onwards. Read this article to learn more about the health insurance landscape in India.

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How did Health Insurance Begin in India?

Post independence, health care became important and thus saw significant improvement. Medical insurance in India started with the Employees State Insurance Scheme in 1948. This scheme included coverage against OPD, IPD, and other medical contingencies. In 1954, a contributory health plan was launched under the name Central Government Health Schemes (CGHS) to provide medical services especially to Central Government employees and their families.

Milestone

General Insurance Corporation launched India's first mediclaim policy in 1986 to standardise the terms and conditions under health insurance. This voluntary health insurance plan indemnified hospitalisation costs with exclusions such as pregnancy, pre-existing diseases, HIV-AIDs, childbirth, etc. As per the indemnity clause, incurred expenses were reimbursed through the third-party administrators' mechanism.

 

In 1991, privatisation of the insurance sector took place after the Indian government introduced the new economic policy and liberalisation process. The Insurance Regulatory and Development Authority (IRDA) bill was sanctioned in the parliament. And in the evolution of health insurance, this marks a milestone.

Health Insurance Perspective in India

Lately, the health insurance sector has been picking up steam in India. The stakeholders of the health insurance ecosystem–private health insurance providers as well as IRDAI are together striving to provide us with the best health insurance plan. And with the COVID-19 pandemic, people have become more and more aware of how health insurance can act as the financial cushion they can fall back on during medical emergencies. Health insurance is available for senior citizens, children, and maternity in India. In fact, it also enables you to customise your plan as per your medical needs.

Conclusion

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FAQs on the History of Health Insurance

  • ✔️Who suggested the concept of health insurance?

    The concept of health insurance was first suggested in 1694 by Hugh, the elder Chamberlen from the Peter Chamberlen family.

  • ✔️When was IRDAI formed?

    The Insurance Regulatory and Development Authority of India was founded in 1999.

  • ✔️Why was IRDAI formed?

    The Insurance Regulatory and Development Authority of India was established to regulate and develop the insurance sector of our country.

  • ✔️Who started the first health insurance plan in India?

    The General Insurance Corporation (GIC) launched the first mediclaim policy in India.

  • ✔️When did health insurance start in India?

    In India, health insurance came into existence in the post-independence era.

  • ✔️Which is the first government health insurance plan in India?

    The first government health insurance plan in India is the Employees State Insurance Scheme. It was formulated to cover the blue collared private sector workers.