The differences between company healthcare plans and commercial and public insurers are a critical factor that significantly affects the state of employee healthcare. Profit-driven insurers in the private sector frequently place a high value on flexibility and customisation in their health plans, modifying their offers to suit the various demands of both employers and employees.
As a result of their government mandate, public sector insurers, on the other hand, typically prioritise broad accessibility and affordability to offer complete coverage to a larger population. Depending on whether an individual’s job is associated with a public or private sector insurer, the healthcare experience they receive will ultimately be shaped by this fundamental difference in approach, which is reflected in unique features, pricing, and coverage alternatives.
Understanding the Difference Between Public and Private Sector Insurance
Government directives require employers to offer a company health plan to their employees. However, the option to go with a public or private insurance company is their choice. To understand, below are the fundamental differences between the two:
| Features | Public Sector Insurance | Private Sector Insurance |
| Premium | Low | High |
| Clientele | Usually taken by low-income group people | Available for all income group |
| Discount | Government offers discounted rates | Competitive Pricing |
| Amount insured | Moderate amount insured | Amount varies and can be higher based on higher premium payment |
| NCB benefits | Not available | Available |
| Coverage | Offer coverage with an upper limit | Available full coverage amount on most medical expenses |
What are Private and Public Sector Health Insurers?
All insurance companies owned by private entities are known as private health insurance providers. Many private health insurers, such as Star Health, HDFC Life, Niva Bupa, ICICI Life, and more, offer company health care plans for employees.
On the other hand, public sector insurers are the ones with 100% government ownership. These companies report to the Ministry of Finance but are not non-profit organisations. They also work on a similar basis as private healthcare providers.
For example, if a business opts for a company health insurance policy for employees from a public sector insurer, it would not mean that everything, including pre-existing diseases, will also be covered. They also have rules and regulations and only give coverage to some things.
They are both required to be run by IRDAI regulations. IRDAI also keeps a proper check and ensures that the insurance provider is protecting the policyholder’s money, whether public or private. It also closely monitors the finances and takes action where necessary.
Which is Better – Private or Public Sector Insurers?
Every employer must do a deep research before choosing the company health insurance plans for employees. Both private and public sectors have something unique to offer to their customers.
For instance, if we look at the innovation point of view, private insurance companies are always one step ahead of public healthcare providers. They always consider consumer’s needs and launch new products or features accordingly. On the other hand, public sector companies usually take more time to establish and upgrade to the policies and features offered by a private sector insurer.
Top Public and Private Sector Insurers in India
Here is the list of the top five public and private sector insurance providers based on their claim settlement ratios:
| Public Sector Insurance Providers | ||
| Sno. | Name of the Insurance provider | Claim Settlement Ratio (FY 2023) |
| 1. | New India Assurance Company Ltd. | 75.16% |
| 2 | National Insurance Company | 55.57% |
| 3 | LIC of India | 98.45% |
| 4 | Oriental Insurance Company Limited | 71.26% |
| 5 | United India Insurance Company | 51.65% |
| Private Sector Insurance Providers | ||
| Sno. | Name of the Insurance provider | Claim Settlement Ratio (FY 2023) |
| 1. | Aditya Birla Health Insurance | 90.24% |
| 2 | Reliance General Insurance | 85.52% |
| 3 | Universal Sompo General Insurance | 88.48% |
| 4 | HDFC Ergo General Insurance | 83.31% |
| 5 | Niva Bupa Health Insurance | 85.18% |
Conclusion
In conclusion, the distinctions between company health plans provided by insurers in the public and private sectors emphasise distinct priorities. Whereas commercial insurers focus more on customisation and the ability to tailor coverage to specific needs, public insurers prioritise cost and universal accessibility.
These differences have a significant influence on how employees receive healthcare. In the end, selecting between health plans from the public and private sectors requires balancing the benefits of customised alternatives with the accessibility and affordability of government-funded care.
References
- https://www.beshak.org/insurance/opinion/articles/public-sector-vs-private-sector-insurance-company/
- https://www.smcinsurance.com/health-insurance/private-insurers-vs-government-insurers
About The Author
Mayank Sharma
MBA Finance
He is a professional who brings extensive knowledge and expertise to the field of group health insurance. He has dedicated 7years to helping individuals and businesses navigate the complexities of insurance. Having worked closely with numerous clients and insurance providers, he deeply understands the nuances of group health insurance policies. With a reputation for providing insightful and informative content, he leverages his industry experience to educate readers about the importance of group health insurance and its benefits. Through their articles, Mayank Sharma aims to empower individuals and businesses to make informed decisions about their healthcare coverage, ultimately promoting healthier and more secure communities.
