A STUDY ON VARIOUS FACTORS AFFECTING BUYING DECISION FOR HEALTH INSURANCE WITH SPECIAL REFERENCE TO RURAL AREAS

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A STUDY ON VARIOUS FACTORS AFFECTING BUYING DECISION FOR HEALTH INSURANCE WITH SPECIAL REFERENCE TO RURAL AREAS

A STUDY ON VARIOUS FACTORS AFFECTING BUYING DECISION FOR HEALTH INSURANCE WITH SPECIAL REFERENCE TO RURAL AREAS

Rahul Tripathi

A.P., Deptt. Of Management, Geeta Engg. College tripathirahul96@gmail.com

  1. INTRODUCTION

    Health insurance is insurance against the risk of incurring medical expenses among individuals. By estimating the overall risk of health care expenses among a targeted group, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to ensure that money is available to pay for the health care benefits specified in the insurance agreement. The benefit is administered by a central organization such as a government agency, private business, or not-for-profit entity. Health insurance policy in more specified manner is a contract between an insurance provider (e.g. an insurance company or a government) and an individual or his sponsor (e.g. an employer or a community organization). The contract can be renewable (e.g. annually, monthly) or lifelong in the case of private insurance, or be mandatory for all citizens in the case of national plans. Public sector ownership is divided between central and state governments, municipal and Panchayat local governments. Public health facilities include teaching hospitals, secondary level hospitals, first-level referral hospitals (CHCs or rural hospitals), dispensaries; primary health centres (PHCs), sub- centres, and health posts. Also included are public facilities for selected occupational groups like organized work force (ESI), defence, government employees (CGHS), railways, post and telegraph and mines among others. The private sector (for profit and not for profit) is the dominant sector.

    Health insurance in a narrow sense would be an individual or group purchasing health care coverage in advance by paying a fee called premium. In its broader sense, it would be any arrangement that helps to defer, delay, reduce or altogether avoid payment for health care incurred by individuals and households. Given the appropriateness of this definition in the Indian context, this is the definition, we would adopt. The health insurance market in India is very limited covering about 10% of the total population.

    There are many factors which contribute for someone to choose any health insurance plan, which can be (i) diseases covered (ii) premium to be paid (iii) recommendation by friends, etc.

    So keeping all these views in mind we can easily consider that it is quite wide area affected by many sort of factors.

  2. LITERATURE REVIEW

    Robin Pearson (2002), article surveys recent research on insurance history with the aim of placing these developments in their long-run context. Three areas were examined for evidence of continuities and discontinuities with the past: namely, the impact of technology, the interaction between markets and organizational change, and the globalization of insurance and its relationship to economic growth. Menno Fenger (2010), article tries to fill this gap. It sets out to assess the impact of increasing knowledge about social risks on modern welfare states. It focuses on developments in the fields of pensions, health insurances, and unemployment insurances. Walter L.

    Ellis (2003), study examined urban and rural differences in the provision of health insurance coverage for children of divorce. John Comer (1999),

    study indicates that incremental policy approaches may not deal adequately with the fundamental problems that result in increases in the number of uninsured Americans and caring for their health care needs. Phillip A. Lewis (2009), Results show that hospital emergency departments attract a greater share of ambulatory care visits by uninsured patients than by patients with either Medicaid or private insurance. Results also show that hospital outpatient departments attract a greater share of visits by uninsured patients or patients with Medicaid than by patients with private insurance. William S. Cartwrighta (1992), found that higher levels of coverage are associated with increased expenditures through higher probabilities of incurring a medical expense and increased levels of expenditures. Those with poor health had a smaller likelihood of having insurance than those with better health status, contrary to the notion of adverse selection. Ricardo Henríquez Höfter (2006), paper analyses the choice of private health insurance in Chile and how this relates to the utilization of health services. The results show the importance of some demographics on the insurance decision, particularly age, gender and marital status. Socio-economic factors such as education, income, employment status and zone of residence, all influence the probability of purchasing private insurance. Joachim De Weerdta (2011), In a panel survey of an informal insurance network in Tanzania found none of the tell-tale signs that insurance transfers follow reciprocal risk sharing arrangements among self-interested individuals: insurance remittances do not occur through informal loans; transfers are not regressive; and they do not fall when shocks are repeated over time. Aradhna Aggarwal (2011), This article analyses equity in enrolment, renewal of enrolment, and utilisation of community-based health insurance with special reference to the Yeshasvini health care programme.

  3. OBJECTIVE AND METHODOLOGY OF

    THE STUDY

    To identify the factors which are influencing in rural area for health insurance under different schemes and to find out the problems faced regarding health insurance schemes are the major objectives of the study. This study is an empirical research based on the survey method. In Gurgaon district, there are more than 270 villages out of them, by considering the nearby area Farukhnagar, Chandu, Dhankot, Sultanpur have been selected purposively.

    The study is largely based on primary data collected by interviewing the sample respondents personally. A detailed questionnaire embracing the objectives was designed and canvassed to the sample respondents personally. The first-hand information from the sample respondents with the help of an interview schedule was collected. It is decided to use convenient sampling method. Originally, it was planned to collect the data from 120 sample respondents. Due to incompletion and contradictory information provided it was possible to have only 100 sample respondents as final sample size.

    The collected data were tabulated to make it suitable for further statistical analysis. As the respondents come from scattered area with different socio- economic background, there are different factors to different respondents. These factors experienced by the respondents are identified through preliminary investigation. In the study the factors influencing the respondents for availing the health insurance like, diseases covered coverage, attractive schemes, reasonable premium, recommendation of friends/ relatives are given in the interview schedule. This section analyses the factors influenced by the sample respondents to insure their health.

    To find out the most significant factors influencing the respondents, a list of nine statements relating to the health insurance has been collected from various previous studies and consulting with experts. Garretts ranking technique has been used. As per this method, respondents have been asked to give rank to various factors and such ranking have been converted into score value shown in Table 1.

    Table1: Scale and Score Value for Factors Infuencing the Respondents: Garrett's Ranking Analysis

    Factors

    Rank Scale

    Value

    I 81

    II 69

    III 62

    IV 56

    V 50

    VI 44

    VII 38

    VIII 31

    IX 19

    Total Score

    Mean Score

    Ranks

    Hospitals Empanelled

    f

    16

    14

    16

    18

    12

    4

    4

    12

    4

    100

    56.38

    II

    fx

    1296

    966

    992

    1008

    600

    176

    152

    372

    76

    5638

    Diseases Covered

    f

    22

    16

    12

    14

    10

    14

    4

    4

    4

    100

    58.44

    I

    fx

    1782

    966

    744

    784

    600

    616

    152

    124

    76

    5844

    Settlement of claims

    f

    14

    8

    6

    6

    18

    18

    10

    16

    4

    100 I

    SBN: 978-9

    50.38

    3-83758-09-8

    IV

    fx

    1134

    552

    372

    112

    900

    792

    380

    496

    76

    5038

    Tax Saving

    f

    8

    8

    8

    2

    12

    2

    14

    24

    22

    100

    41.9

    IX

    fx

    648

    552

    496

    112

    600

    88

    532

    744

    418

    4190

    Reasonable Premium

    f

    16

    4

    12

    6

    12

    6

    14

    10

    20

    100

    47.38

    VII

    fx

    1296

    276

    744

    336

    600

    264

    532

    310

    380

    4738

    Company Reputation

    f

    10

    12

    4

    4

    8

    26

    6

    6

    24

    100

    45.24

    VIII

    fx

    810

    828

    248

    224

    400

    1144

    228

    186

    456

    4524

    Attractive Schemes

    f

    4

    10

    18

    18

    2

    16

    12

    10

    10

    100

    48.98

    VI

    fx

    324

    690

    1116

    1008

    100

    704

    456

    310

    190

    4898

    Cash-less Facility

    f

    2

    10

    12

    22

    22

    4

    16

    4

    8

    100

    49.88

    V

    fx

    162

    690

    744

    1232

    1100

    176

    608

    124

    152

    4988

    Recommendation Of Friends/ Relatives

    f

    8

    18

    12

    10

    4

    10

    20

    14

    4

    100

    51.04

    III

    fx

    648

    1242

    744

    560

    200

    440

    760

    434

    76

    51074

    Note: x = Scale Value f = Number of respondents fx = Score value

  4. PROBLEMS FACED BY THE

    Analysis:

    Now we proceed to analyse the finding of the survey. The score and factors values influencing respondents are presented in Table 1.

    Table 1 exhibits the factors influencing the respondents to insure their health. The respondents are ranked from I to IX according to their views. It is seen the disease coverage is considered as the major constraint by the respondents with the highest mean value of 58.44 occupying the first place. Hospital Empanelled with mean score of 56.38 is ranked as the second highest. Recommendation Of Friends/ Relatives with mean score of 51.04 is ranked as third, Settlement of claims with mean score of 50.38 as fourth, Cash-less Facility with mean score of 49.88 as fifth, Attractive Schemes with mean score of 48.98 as sixth, Reasonable Premium with mean score of 47.38 as seventh, Company Reputation with mean score of

    45.24 as eighth and Tax Saving with mean score of

    41.90 as ninth are listed in that order. Hence, it can safely be concluded that the disease coverage is the most important factor influencing the respondents to insure their health.

    RESPONDENTS REGARDING HEALTH INSURANCE

    The health insurance faces the problems like Services of hospitals empanelled, Mode of Payment of Premium, Settlement of Claim, etc. However, health insurance is important to safeguard the interest and welfare of the farming community for a variety of reasons. Health is very crucial factor for anyone especially when it costs both in terms of monetarily and physically. If head of any family or any other members of family is having health insurance it helps them a lot in terms of physical as well psychological assurance. In the present study, the problems like Diseases covered, Mode of Payment of Premium, Settlement of Claim, Customer Care Services, Lock- In Period, Services of hospitals empanelled , Cash- Less Claim Facility, Family coverage are provided in the interview schedule. To rank the problems, lists of eight statements relating to the health insurance have been drawn in interview schedule. The sample respondents were asked to rank these statements. To find out the problems faced by the respondents towards health insurance. Garretts ranking technique was used in compiling the information. Findings are shown in Table 2.

    Table 2: Scale and Score Values for Problems: Garretts Ranking Analysis

    Factors

    Rank

    Scale Value

    I 79

    II 68

    III 59

    IV 53

    V 47

    VI 32

    VII 20

    VIII 31

    Total Score

    Mean Score

    Ranks

    Dseases covered

    f

    22

    20

    14

    20

    6

    6

    8

    4

    100

    58.42

    I

    fx

    1738

    1360

    826

    1060

    282

    240

    256

    80

    5842

    Mode of Payment of Premium

    f

    10

    22

    20

    12

    22

    6

    4

    4

    100

    55.84

    II

    fx

    790

    1496

    1180

    636

    1034

    240

    128

    80

    5584

    Settlement of Claim

    f

    12

    4

    8

    6

    4

    46

    14

    6

    100

    46.06

    VI

    fx

    948

    272

    472

    318

    188

    1840

    448

    120

    4606

    Customer Care Services

    f

    10

    8

    4

    8

    6

    4

    12

    48

    100

    37.8

    VIII

    fx

    790

    544

    236

    424

    282

    160

    384

    960

    3780

    Lock-In Period

    f

    4

    10

    12

    8

    20

    18

    8

    20

    100

    44.44

    VII

    fx

    316

    680

    708

    424

    940

    720

    256

    400

    4444

    ISBN: 978-93-83758-09-8

    Services of hospitals empanelled

    f

    26

    18

    6

    4

    6

    12

    18

    10

    100

    53.82

    III

    fx

    2054

    1224

    354

    212

    282

    480

    576

    200

    5382

    Cash-Less Claim Facility

    f

    8

    4

    20

    26

    28

    4

    6

    4

    100

    52.1

    IV

    fx

    632

    272

    1180

    1378

    160

    192

    80

    5210

    100

    Family coverage

    f

    8

    14

    16

    16

    8

    4

    30

    4

    100

    49.52

    V

    fx

    632

    952

    944

    848

    376

    160

    960

    80

    4952

    Note: x = Scale Value f = Number of respondents fx = Score value

    Table 2 provides the list of the problems faced by the respondents towards health insurance. The respondents are ranked from I to VIII according to their opinion. It is seen that Diseases covered is considered as the major constraint by the respondents with the mean value of 58.42, and Mode of Payment of Premium with mean score of 55.84 is ranked as the second next. Further, not satisfied with Services of hospitals empanelled with mean score of 53.82 as third, Cash-Less Claim Facility with mean score of

    52.10 as fourth, Family coverage with mean score of

    49.52 as fifth, settlement of claim with mean score of

    46.06 as sixth, Lock-In Period with mean score of

    44.44 as seventh, and Customer Care Services with mean score of 37.80 as eight are the problems in that order of ranking in health insurance. Hence, it can be concluded that Diseases covered is a significant criteria enlisted by the respondents towards health insurance.

  5. CONCLUSION AND SUGGESTIONS In the present study, it is found that majority of the sample respondents opined that the factor of Diseases covered as a very important factor to insure their health. Hence, it is suggested that insurance companies and government have to undertake effective steps to enlighten the respondents about the significance of health insurance. Similarly a majority of the sample respondents opined that the Mode of Payment of Premium has also been ranked as most significant problem. Hence, it is suggested that proper steps to be taken by insurance companies to

    provide flexible payment options. Technicalities and the procedures with regards to claims should be simplified. Coverage of disease should be increased and premium rates collected from the customers should be at least to reach the no profit, no loss stage. As the insurance sector is opened up for private sector, it would be more appropriate to allow the insurance companies to participate actively by taking a lead role at the earliest within the effective regulation and supervision of insurance regulatory and development authority (IRDA). Moreover they should be provided better services from empanelled hospitals as well.

  6. REFERENCES

[1]. William S. Cartwrighta, Teh-wei Hub & Lien-fu Huang (1992), Impact of varying Medigap insurance coverage on the use of medical services of the elderly, Applied Economics, Volume 24, Issue 5,

pages 529-539

[2]. Keith Mueller & Joseph Blankenau (1999), Losing and Acquiring Health InsuranceConsequences for Health Care

,Journal of Health & Social Policy,Volume 11, Issue 3, pages 1-15

[3]. Robin Pearson (2002), Growth, crisis and change in the insurance industry: a retrospect, Accounting, Business & Financial History, Volume 12, Issue 3,

pages 487-504

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