The Impact of Government Subsidies on Health Insurance Plans

Let's take a look at government subsidies and their impact on medical insurance.

First Published Jun 19, 2023, 7:02 PM IST

Healthcare Insurance is a vital necessity for any individual. It assures coverage for all your future healthcare needs. It’s natural to think about which health insurance is best in India. There are various healthcare plans out there. In today’s changing world and with the rapid increase in health emergencies, the need for medical insurance has been more than ever.

However, not everyone can buy health insurance, yet it is not something that you can just opt out of. For a situation like this, the government provides subsidies on health plans. To create a more inclusive healthcare system, subsidies exist to make healthcare facilities easily available to the public. When choosing which health insurance is best in India, it is obvious that we would consider various aspects.

This blog will discuss these government subsidies and their impact on medical insurance.

What are Government Subsidies?

Starting off with the most basic terminology, i.e., a subsidy. A government subsidy is any kind of financial assistance given by the government to any private firm with the aim of providing services to a larger public. They help in creating a more inclusive environment and help in providing services to each and every one.

People often confuse government subsidies with government health plans. Let's look at the key difference between the two.

What is the Difference between Government Subsidies on Health Plans and Government Health Plans?

Government Subsidies - In simple words, it is the additional financial assistance given by the government to private healthcare insurance firms in order to make it more affordable and accessible to the population of the country.

Government health plan - On the other hand, government health insurance plans are schemes started by the government and are entirely government-funded healthcare plans with no connection with private firms whatsoever. One of the major examples is the Pradhan Mantri Jan Arogya Yojna which has been a key scheme in making healthcare schemes inclusive for the citizens of India.

Why do we Need Government Subsidies?

When there are so many insurance companies that provide medical policies and several facilities, it’s natural to wonder why we even need government subsidies. But here is why they are important:

Health plans can be very costly, and hence many people cannot afford them.
India’s or any country’s health plans should be more comprehensive in order to incorporate people from all walks of life and help them avail the services.
Subsidies, in general, help in delivering services to a larger public and also sustain the companies.

Impact of Government Subsidies On Health Plans

Government subsidies on health plans are of great importance. The government ties up with private health insurance companies, assisting them with financial support so that they, in turn, help the public. The purpose of healthcare insurance is to make people’s life more secure and tension free. Everyone, irrespective of their financial status, requires a health insurance plan. And government subsidies assist in the same. The impact of government subsidies is usually positive, and here is why.

More people avail insurance -

When there are government subsidies on the health plans, the premiums are relatively lower, and hence more people will avail the service. If a larger population has health care coverage, then the total health status of the country will see positive growth.

Lower Premiums -

As aforementioned, subsidies help in reducing the premium that has to be paid. The assistance from the government helps the insurance companies in providing more facilities to a larger public. Paying premiums is the basis of any health policy, and if they are lowered, then a larger population will have access to it.

Larger coverage -

It often happens that subsidies are added to certain requirements of a health insurance policy hence increasing the coverage of the particular plan. Increased services imply more coverage, and that is beneficial to the public.

Decreased out-of-pocket costs -

There are certain out-of-pocket costs, and having subsidies on health care plans reduces the burden of the same. Out-of-pocket services like deductibles, copayments, and coinsurance are reduced with the application of subsidies. Thus making healthcare plans more affordable to the public.

Subsidies only make services more accessible and affordable and are pivotal for any country. The public benefits from subsidies and are able to access something as vital as healthcare insurance. They don’t always have to stay stuck on the fact that which health insurance is best in India and is available at an affordable price.

Niva Bupa

Health Insurance companies which are aided by government subsidies, do offer various benefits that help in catering to the medical needs of the public. It’s natural to compare health insurance and analyse different aspects. One insurance company that promises to cater to all your medical care needs is Niva Bupa, and here is why.