The global health Insurance market is evaluated at US$79.254 billion for the year 2019 and is projected to grow at a CAGR of 4.71% to reach US$109.383 billion in 2026.
Health Insurance is an insurance solution that provides for the medical and surgical expenses of a person who has taken this policy. It functions in two ways either it provides reimbursement of the expenditure incurred due to illness or injury or it pays a specific amount directly to the care provider. The increase in medical costs or medical care expenses globally is driving the market for health insurance.
Moreover, the rapid growth of chronic diseases among the population across the globe such as heart disease, cancer, type 2 diabetes, and arthritis, and the rise in the aging population has further contributed to the expansion of the market. However, the cost associated with health insurance may act as a market constraint.
Increase in healthcare expenditure to drive the growth of the market.
The increase in healthcare expenses is the prime driver of the market. Healthcare insurance acts as a risk mitigation measure for consumers globally. The increase in health expenditure both by the individuals and governments is rising.
According to the report on global health expenditure released by the World Health Organization (WHO) on February 20, 2019, global expenditure on health increased in low and middle-income countries by 6 percent and in high-income countries by 4 percent. The Indian Government, as per the Ministry of Finance is looking to increase public spending on healthcare services from 1 percent to 2.5-3 percent of GDP, as envisaged in the National Health Policy of the country.
The US Center for Medicare and Medicaid Services in its report estimated that national health care spending reached $3.81 trillion in 2019 and increased to $4.01 trillion in 2020. CMS projected that by 2028, health care spending would reach $6.19 trillion, and would account for 19.7% of GDP, up from 17.7% in 2018 in the US. The increasing healthcare expenditures point to the opportunity in the health insurance market.
Expanding penetration of chronic diseases to raise the market demand.
The expanding penetration of chronic diseases among the population across the globe such as heart disease, cancer, type 2 diabetes, and arthritis, and the rise in the aging population has further contributed to the growth of the market.
As reported by US National Center for Biotechnology Information, one in every three adults lives with more than one chronic condition, or multiple chronic conditions and procure an excessive health and cost burden. The mentioned figure is near to three out of four in older adults residing in developed economies and is estimated to incline drastically with the proportion of patients with more than four diseases almost doubling between 2015 and 2035 in the UK.
Rising awareness regarding health insurance benefits to facilitate market expansion.
The rising awareness about the benefits of health insurance is predicted to further expand the market size of the health insurance market. Moreover, the awareness among the people living in rural areas is also increasing. As per the United States Center for Medicare and Medicaid Services, Private health insurance spending grew 3.7% to $1,195.1 billion in 2019 amounting to 31 percent of total National Healthcare Expenditure. Especially owing to the advent of the COVID-19 pandemic outbreak.
In June 2021, Exela Technologies, Inc., a global business process automation company, announced the extension and expansion of its partnership with specialty care services insurance carriers, PCH Global. This engagement leverages Exela’s powerful cloud-based digital exchange platform for PCH Global to expand the current deployment to approximately 3,800 specialists as registered users within the customer organization using Exela’s proprietary workflow and rule engines across all aspects of the health claims spectrum including behavioral health.
In June 2021, Now Health International Group, an International Private Medical Insurance provider, announced a new program with Starr Insurance Companies, a global insurance company, to take ahead its growth plans in Europe. This program incorporates Now Health International’s global presence and expertise in providing high-quality international health insurance solutions and digital tools, with Starr’s long-standing global knowledge and capability to deliver customized solutions across Europe.
High cost and longer time for claim reimbursement to restrain the market growth.
However, the high cost associated with health insurance, lack of knowledge about coverages included in the health insurance policy, strict regulations, and longer time for claim reimbursement may constraint the growth of the health insurance market.
Geographically, North America will dominate the market holding the largest share in the forecast period owing to the availability of multi-value health insurance policies, provision of favorable health insurance landscape in the U.S, and presence of key market players in the region.
Moreover, escalating disposable income, improvement of health standard system, and increasing healthcare expenditure are estimated to positively impact the health insurance market in the Asia Pacific.