Question

Demand for health care insurance shows the level of health insurance that an individual obtain to be used in case of facing illness. The level of insurance could vary in accordance with changes in the demand factors. Of the factors we studied that influence the demand for health insurance, which do you believe have the greatest impact on the purchase of health insurance? Make sure you discuss all the factors and then explain in depth your reasoning for the factors that you think have the greatest impact. Can you suggest another factor that may influence the demand for health care insurance? Explain in depth why do think your suggested factor is important?

Answer 1

Since I belong to India, I will shred some light on the factors playing a major role in influencing a customer to buy a health insurance. As I do not know what was discussed in the class, this is a generalized answer. The list below is in no particular order.

1. Cost - This is the cost of a health insurance purchase. It may vary based on different schemes.
2. Income- Refers to the annual household income of the potential customer. More income means that the spending is more and there is a greater possibility of purchasing health insurance.
3. Healthcare expenditure - in a household, if we observe that there is already a narrative of greater percent of healthcare being allocated in the total expenditure, we might not be wrong to say that this household has a greater chance of buying a health insurance.
4. Health and illness coverage in the insurance - let it be Any country, a perception exists on the variety of illness the insurance will cover and is it really worth the penny spent or not. This is one of the significant factors that influence the amount spent in buying the health insurance.

From various studies and statistical models, it has been proven that income plays the most significant role in influencing a customer to purchase a health insurance. Main reason attributed to this is the living and spending conditions in a country like India. With a very large chunk of population working tirelessly to just meet their ends meet, opting for health insurance is nothing but seen as a luxury. That's the reason, those who afford this health insurance have a greater income and a considerable savings to back them up.

In my opinion, the second most significant factor influencing the purchase of health insurance is the perception of the coverage. In a country like India, if you're plannig to buy health insurance against all odds, it's pretty normal to have questions on "value for money" in case of healthcare services. A lucrative health insurance scheme not covering a manifold of illness is of no use. The customer's must rest assured that they are being offered the best scheme in that specific price range.

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