Health insurance provides financial protection for medical costs to the policyholders when they are hospitalised. It provides compensation for medical expenses in exchange for a monthly fee or a payroll tax to provide health benefits.
It offers quick reimbursement for people suffering from diseases with the minimum premium amount and offers affordable health services, such as preventive care, hospitalisation, office visits, immunisations, and others. The insurer is obligated to cover medical costs for the policyholder until the policy's tenure expires. The coverage may vary depending on the policy's conditions based on age group, diseases, government policies, and other factors.
Improving the GDPs of several nations across the globe has benefitted the growth of the global health insurance market in recent years. Globally, the healthcare insurance market is witnessing a rapid evolution with a considerable increase in the number of product launches and expansion. The major factors fuelling the trend include a hike in health expenses and an upsurge in the prevalence of chronic diseases. Furthermore, the government-mandated compulsory provision of health insurance for private and public sector employees in many countries is propelling the growth of the health insurance market. Many healthcare programmes are being proposed by the German government to increase awareness among citizens about fatal diseases and health concerns. Some plans have also been initiated to issue health insurance to the citizens of the country. Advancement in IT strategies such as price comparison websites, the integration of solutions through data analytics, cloud computing, and other modelling techniques is also propelling the market's growth as they compel insurers to adjust their business models.
Currently, while the United States is the leading health insurance market, the Asia Pacific market is expected to witness a boost in the coming years as the region has shown remarkable progress in its GDP, improvement in disposable incomes, and the enhancement of health security standards. The rising middle class population and an increasing number of individuals with high net worth in the Asia Pacific are expected to give the health insurance market the much needed thrust.
The United States, meanwhile, has an extraordinary healthcare system and services, which has made it the most significant healthcare insurance market, globally. There has been an increase in the total healthcare expenses, including public and private expenditure on the initiatives supporting healthcare and disease prevention through the use of medical, paramedical, and nursing information and technology. The strong presence of leading players in the country includes Anthem Inc., Aetna Inc., UnitedHealth Group Inc., Humana Inc., and Cigna Corp has primarily aided the market growth. These players hold a share in both the private and public insurance sectors. However, the high level of competition in the United States health insurance market is a threat to the new entrants and might hinder the market growth in the coming years.
Impact of COVID-19:
Healthcare providers are likely to see an influx of patients who display COVID-19 symptoms. The largest companies in the health and medical insurance industry have agreed to cover the cost of COVID-19 testing and treatment, which will increase therapeutic benefit expenses, resulting in lower profit margins for health insurance companies. However, the adverse impact on the industry might be offset by the rapid rate of renewals during the pandemic as people are increasingly opting for new or renewed health insurance policies due to the rising hyper-vigilance about health and well-being costs amidst the continuing COVID-19 pandemic.