Coronavirus disease (COVID-19) has significantly impacted innumerable economies and posed a major challenge to the overall supply chain. It has tremendously affected the lives of people on account of stringent measures adopted by governing authorities of numerous countries to prevent the spread of the disease. These measures include closing state and interstate borders, imposing complete lockdowns and travel restrictions, shutting schools and colleges, and banning mass gatherings. Although it has brought sectors like aviation, entertainment, and travel and tourism to a sudden halt, it has positively influenced the health insurance sector worldwide. As per the estimated by IMARC Group, the global health insurance market size reached US$ 2,864 Billion in 2020. Looking forward, the market is projected to expand at a CAGR of 6.90% during the forecast period (2021-2026).
Impact of COVID-19 on healthcare and health insurance
According to the International Diabetes Federation (IDF), COVID-19 can become life-threatening for people with low immunity, cancer, diabetes, asthma, and other pre-existing medical conditions. The disease has already affected more than 140 million people and taken 3 million lives across the globe. It has also resulted in a considerable rise in the demand for health insurance as people want to ensure the best medical treatments are provided to them and their family members.
Difference between standard health insurance and COVID-19 health insurance policies?
Standard health insurance covers pre, post- and in-hospitalization expenses of several chronic diseases. On the other hand, COVID-19 health insurance offers coverage to people who are diagnosed with the disease. It does not cater coverage for any other disease. At present, governing authorities of numerous countries are bearing the cost of check-ups as well as pre-hospitalization procedures.
Measures undertaken by leading health insurance providers
Keeping in mind the health and financial crises of people, health insurance providers are preparing themselves for an increase in health products-related queries and a delay in the renewals of existing policies on account of the paucity of funds in the hands of policyholders. These providers are focusing on making customized plans to ensure coverage of the affected. They are introducing plans that offer coverage irrespective of the travel or medical history. Besides this, as there is an uptake in digital health products, insurers are resorting to paperless app/web-based seamless processes to increase productivity and cost-efficiency.
Rising preferences for telemedicine worldwide
Telemedicine refers to the delivery of healthcare services wherein the distance is a critical factor. It involves the utilization of information and communications technology (ICT) by patients and healthcare professionals for the exchange of valid information. This information includes diagnosis, treatment and prevention of disease and injuries, and research and evaluation. With the growing preferences for telemedicine to prevent the spread of the disease, health insurance providers are offering telemedicine consultation coverage in health insurance to expand their existing consumer base.
Suggested reading: Impact of COVID-19 on Global Digital Health Industry
Strategies adopted by leading health insurance providers to reduce financial risks during COVID-19
To maintain an upper hand over other competitors, health insurers nowadays are focusing on mitigating some of the financial risks by following these strategies:
- Preventing termination of employers group on account of non-payment: Insurers usually have the policy of terminating delinquencies. However, they may want to accommodate longer premium payment cycles for employers’ groups that have good credit.
- Considering multiple scenarios while computing premium rates in 2021: Insurers may want to consider hypothetical situations like new COVID-19 infection wave; degree of deferred services by members; the amount of testing conducted; and the cost as well as the availability of the vaccine while finalizing premium rates.
- Support risk-reducing assistance programs undertaken by federal governments: Federal governments of several countries are focusing on minimizing financial uncertainties that emerged on account of the pandemic. As a result, they are offering different recommendations, which can be supported by leading players in the health insurance industry.
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