How Urban vs. Rural Healthcare Gaps Reflect in Premiums

Urban Vs. Rural – Mind the Healthcare Gap

Not just India, but many developing countries face this imbalance of healthcare in rural and urban regions. It has an impact on the economy, healthcare infrastructure and its accessibility. Here are some of the consequences of the gap:

1. Metro cities like Mumbai, Delhi or Bengaluru have multiple tertiary care hospitals, giving access to quality healthcare. On the other hand, rural regions often rely on poorly equipped primary health centres.
2. India is already short of medical professionals and doctors. 80% of the doctors and medical staff are concentrated in the urban areas. There are only 3 doctors per 10,000 people in rural areas, making it an underserved region.
3. As per the insurance regulator, IRDAI, insurance penetration in India is far higher in urban regions than in rural regions. Most of the rural population is either uninsured or only relies on government-sponsored health insurance schemes. This leaves them vulnerable to financial crisis in times of medical emergencies.

How Urban-Rural Disparity in Healthcare Influences Health Insurance Premiums?

Location is one of the vital factors taken into consideration by the health insurance companies while underwriting the policy and calculating the health insurance premium. Let us explore how location influences the health insurance premium cost:

Access to Healthcare and Delayed Treatment

Patients in rural regions often have to travel to different cities, hence face delays in diagnosis of disease and treatment, leading to complications. For example, if a diabetic patient does not get treatment at the right time due to delayed diagnosis, it can lead to many complications, such as kidney ailments. This ultimately leads to higher treatment costs. Hence, insurance companies put them in the ‘high risk’ category, leading to increased premiums.

Treatment Cost

Urban hospitals charge higher consultation, diagnostic charges, surgery, and room rent charges. For example, a knee replacement surgery may cost INR 2.5 to 3.5 lakh in Bengaluru, but only INR 1.5 lakh in a Tier-2 city like Mangalore. Hence, the treatment cost leads to higher claim amounts in urban regions, resulting in higher health insurance premiums.

Types of Diseases

When it comes to urban areas, the claims placed are more for lifestyle diseases such as diabetes, hypertension, cardiac diseases and more due to a busy, sedentary lifestyle. On the other hand, rural areas may see more hospitalisation for infectious diseases like malaria, jaundice, typhoid, etc., due to a lack of sanitation and preventive healthcare. The cost of hospitalisation differs in both cases, impacting the health insurance premium.

Cashless Hospitalisation

Cashless hospitalisation facility offered by the health insurance companies is more prevalent in urban hospitals. On the other hand, rural hospitals lack empanelment with many private insurance companies. Hence, this increases the administrative cost for the insurance companies, leading to higher health insurance premiums.

Overall, the health insurance premiums are slightly higher for buyers from urban regions than for those from rural regions in India. However, buying health insurance is now easy with online availability. Platforms like Jio Insurance Broking have made it hassle-free for both rural and urban health insurance buyers to avail themselves of the coverage from anywhere. One can compare the policies from various insurance companies and then make an informed choice.

The Road Ahead

There are many ways to bridge this healthcare gap between urban and rural India. It is only possible through innovation and policy reforms. Ayushman Bharat, by the Government of India, is an excellent step towards covering the gap. However, the gap will remain until the rural areas get the proper health infrastructure. Telemedicine, preventive healthcare, and the rise of Insurtech and micro insurance companies are the hopes for the future to bridge this gap.

Conclusion

Healthcare inequality is not just a social issue. It does have a serious financial impact on the people of this country. On one side, rural India faces the issue of delayed treatment, lack of quality healthcare access and financial stress due to delayed treatment and limited insurance awareness. On the other side, urban health insurance buyers are paying higher premiums due to wider coverage and better healthcare access that they have. Bridging the gap and bringing the balance is the need of the hour.