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“Insurance Cos slash list of hospitals offering cashless services in Mumbai for making fraudulent claims”

“Medical insurers curb cashless facility”

“Mediclaim crisis looms, hospitals seek way out” 

“No more cashless mediclaim? Common man suffers”

Reading these headlines in local dailies, you, as a customer, both prospective and existing, must be really worried. After all, you had counted on health insurance to ride through the tough times of cash flow problems in event of hospitalization especially when medical inflation is so high. But all you see are hapless customers being denied first – the cashless claims and then- in some cases, even claims in general. Health insurance companies, you have found out, seem nice when you are buying a policy but when you make claims, they deny claims or double the renewal premium or discontinue the policies on renewal……

Before you think of your health insurance troubles more anxiously, we will try to give you a more balanced perspective about the scenario. All the headlines in dailies are not quite accurate about the situation. After all news is more about the unusual than the usual and media ends up talking about the rarities than the standard cases. As Health insurance experts, we give you our take on the current health insurance scenario.

You ask: Is Cashless Service no longer available? Have all Insurance Companies stopped Cashless facility? What’s the latest update on that front?

Cashless Service was discontinued by the four health insurance PSUs (Oriental, New India, United, National) from 1st of July 2010 from most of the hospitals in their network hospitals in the metros of Delhi, Mumbai, Chennai and Bangalore. The reason cited was - overcharging by most Hospitals and lack of standardized rates. Meanwhile, the PSUs were paying the reimbursement claims as usual. After weeks of hue and cry raised in media and inconvenience to the patients and negotiations, the hospitals and the health insurance PSUs have agreed on standardizing the rates based on the infrastructure available in respective hospitals. The hospitals have thus been divided into three groups based on the facilities.

It is agreed that cashless service will resume in 450 hospitals for 42 medical procedures that covers almost all common ailments from 20 August 2010 and there are talks of adding 350 more hospitals in the list.

The Bottom line:

  • Only the Public Sector Health insurance companies have discontinued the Cashless service in the four metro hospitals, you can still avail of cashless service in other cities or in private companies’ policies.
  • Cashless service is available for emergency and accidents cases in all the originally enlisted hospitals
  • Also, you need to check with your TPA to know the details of the cashless availability under your health insurance policy in the hospital you plan treatment in.
  • The Cashless service issue may be sorted out even further in few days.
  • Meanwhile all health insurance companies are accepting reimbursement claims.

You ask: Why all these sudden changes?

Health insurance cover

In the past 5 years, Health Insurance has grown to become the 2nd largest part of the total portfolio of insurance companies in India. Losses in this portfolio that could be ignored earlier have therefore now come significantly into picture.

In 2008-09 itself, Insurance companies paid 20 Lakh Health Insurance Claims worth Rs. 4087 Crore!  With overall Claim Ratio being 103%, Health Insurance companies paid more claims than the premium they took from their customers. Other expenses involved in managing the portfolio were adding to these losses. Since Government companies (PSUs) have 80% share of the health insurance market in India, they also bear the largest share of these losses. Also note that these losses are funded by ‘premium payers’ including people like you and me. In a predictable move, the Government companies are now under pressure from the Ministry of Finance to take active steps to get the health insurance business out of losses.  

Bottom line: These changes are made now because it is in recent times that health insurance has grown to such large proportions and become what it is, critical to the financial health of general insurance companies

You ask: How can insurance companies discontinue Cashless Facility? Is it legal?

Cashless facility has been incorporated in your health insurance for the convenience of the customers who find it difficult to arrange for large amounts of cash, required for hospitalization, especially in times of emergencies. However it has to be noted that it is an added service and not a core offering of the health insurance companies. The health insurance companies cannot change conditions in the policy without your consent; but they can modify features and benefits not forming part of the policy conditions. Also the PSUs did not discontinue the Cashless service; they only delisted some hospitals from their existing network and created a fresh PPN or Preferred Provider Network list. The list of hospitals does not form a part of your core policy conditions and hence the health insurance companies have arguably not done anything illegal.

Also you can still send your claims for reimbursement after you pay the hospital bills. You are still getting the core benefit of health insurance.

Bottom line: Cashless is not the core product, it is a payment mechanism. You can still avail of reimbursement claims and get your claim settled subject to policy coverage.

Health insurance claim

You ask: Are Genuine Claims also not paid?

Again this is misinterpretation by most, how can health insurance companies survive if they do not pay genuine claims? Plus, the entire cashless service controversy was a result of the soaring claims ratio (between 115%-130) for health insurance. That means for every 100 rupees you pay as premium, the company ends up with an outgo of 115 rupee.  This means that health insurance companies are slipping into losses because they are paying more than they are getting.

And unlike what the news that is circulating would like to tell you, in reality more than 95% of the claims submitted are passed with very small deductions. In order to get your claims settled without any hitch, read your policy document carefully to understand the conditions, keep the documents properly and submit the claim documents on time (for reimbursement claims). If you feel that your claim is being denied without proper reason, you can refer it back to the insurance company, then to insurance ombudsman and finally pursue the matter in consumer court.

Bottom line: If you have a genuine claim, it will be paid!

You ask: Are deductions made in an ad hoc manner?

There are times when you will find that TPAs/health insurance companies will not reimburse you the entire amount in the bill. But there will always be reasons for it- it may be because you have already made one or more claims in a year and the cover amount is spent (for ex. If you have already claimed  50,000 from your 2 lakh cover, you will be left with only 1.5 Lakhs during the remaining period of policy; and if you have a subsequent claim in the same policy year exceeding 1.5 Lakhs, you will naturally be paid only 1.5 Lakhs), there may be sub limits on the specific treatment (for ex: the cost of cataract should not exceed Rs. 25,000), there also may be some expenses that are not covered in your policy for ex. Service charges, admission fees, surcharges levied by the hospitals). In these cases the TPAs/Health insurance companies rightly deduct some amount from the final bill.

However, if you find that the health insurance companies have deducted an amount without valid explanation or reason, you may question them and even pursue the matter further.

Bottom line: TPAs/Companies cannot make deductions in an ad hoc manner as companies are bound by the insurance contract as contained in the policy, and TPAs, representing the Companies, need to process claims as per word and spirit of these contracts. While there are valid reasons for some deductions, you can fight them if you are not satisfied about the validity of any deduction.

You ask: If Insurance Companies can take such ad hoc decisions; they may do the same in the future.

Insurance companies cannot change terms of a contract, without your consent. Only features/benefits which were provided as customer service and don’t form a part of the terms and conditions can be revoked.

For instance,

-           From the informally accepted 30 days, recently many insurance companies reinforced the policy wordings clause of 7 day limit for submitting documents. This was a part of the policy wordings; only now this is being implemented rigorously.  

-           Hospital list does not form part of the core terms and conditions. Hence change of list of Hospitals is under the power of the Insurance Company.

-           Your feeling cheated is because any such change in the process does not get conveyed to you before such change is effected.

-            

Bottom line: In such a scenario, you need an expert in Health Insurance who would be able to inform, answer or provide you alerts on change in the “Value added, out of contract” benefits. And, for that matter, on all matters relating to Health Insurance.

Health insurance claims denied

You ask: Don’t the TPAs and Health insurance companies care about the customers?

In the entire cashless facility issue, if there is one party that was at the losing end, it was the customer. For more than a month now, they are forced to arrange for large sums of money to fund their treatments as Cashless was unavailable, some had to travel a great deal to reach the hospitals that remained in the PPN or Preferred Provider Network. It may look like Companies only care about their finances and that is the image that has been portrayed so far.

TPAs’ reputation is also getting a beating since they are primarily responsible for settling the claims. Health insurance companies are blaming the TPAs for being ineffective in curbing the losses and customers are angry that TPAs are being unfair to them. Abhitabh Gupta, CEO, Paramount TPA says “ TPAs cannot be blamed for the losses primarily because, most of the PSU Insurance companies had underwritten health insurance at an extremely low cost sometimes even selling Re. 1 policies, so it is but natural that they would suffer from losses. Further medical costs have been increasing at a rate of 10-15 % while the premiums are not increasing at the same rate.” He says that the TPAs weren’t given the rights to interfere on the line of treatment and unless there is some change in their role with more empowerment in these areas, TPAs can’t do much.

Here is how, this current cashless chaos will benefit you in the long run

The four PSUs chose to control the losses ahead of other insurance companies; otherwise the claims trend would put the fate of the entire health insurance industry at peril. Now that the hospitals have agreed to standardize their rates, the insurance companies will save at least 20-25% on their losses which will help the customers in the long run in terms of premiums not shooting through the roof.

Sudhir Sarnobat, founder of Medimanage Insurance Broking Pvt. Ltd, says, “Current churning in the market will make life very difficult in short term for all the parties involved, but once this phase passes, we are sure that the changes would be of long-term effect and would help the consumer”. He believes that the focused network with negotiated rates would improve the commercial feasibility of insurance and improve the quality and service delivery of hospitals. He says, “Once the losses are tamed, the journey is always upward in value and what is currently happening with the health insurance industry in India marks the beginning of this”.

Also, another point we need to consider is that premiums of health insurance companies have not risen in the ratio of medical inflation which has created the divide between claims and premiums earned, so health insurance essentially remains quite affordable and inexpensive in comparison, even after these changes. Thus buying a health insurance policy for yourself and your family even now seems a very good idea.

Bottom line: Irrespective of the controversies, health insurance policy is a must investment for every family, it is the only savior during difficult times and even now, considering all the recent changes and available options, it remains a safe investment.

TPAs to move competition panel against PSU insurers

The association of third party administrators (TPA) has decided to move the Competition Commission of India (CCI) against the four public sector non-life insurance companies and their association, called General Insurers Public Sector Association of India (Gipsa), for forming a cartel and abusing their dominant market position in planning their own TPA outfit.

“The TPA floated by Gipsa companies will result in cartelization, market dominance and monopolisation,” the TPA association alleged in its letter to the insurance regulator.

The association said the move would lead to stopping of fresh investments and huge lay-offs by existing TPAs. “The entire business model introduced by the insurance regulator will get destroyed. This is anti-consumer and anti-competition,” Mahapatra said.

When contacted, M Ramadoss, chairman and managing director of New India Assurance, said, “Let us first get the notice. We will then decide what we should do? The TPAs have all the right to do approach the CCI.”

“The move will result in closure of all existing TPA companies. This will give rise to an arbitrary increase of premium, refusal of policies to the elderly, restrictions on cashless network, favouritism under the guise of preferred network of hospitals and corruption,” the TPAs alleged in their letter to Irda.

“How can an organisation owned by the insurers be a TPA to service their clients?” the association asked.

To read full news, click here

Experts from Medimanage.com give their opinion:

Sudhir Sarnobat:

Sudhir Sarnobat from Medimanage.com

All four Public Sector Insurance companies coming together & deciding for a single TPA could be interpreted as Cartelisation as these four govt. companies are separate legal entities.

However, the TPAs cannot force an insurance company to use their services & insurance companies have been selecting TPAs for their various offices based on capability, fees charged, claims processing quality & technology implementation. Instead of going for an open tender, all four companies can have a tacit understanding among them & select, may be just one TPA, for servicing all their claims. After-all, we have examples of Pvt. Insurers going in for their own TPAs & hence, you cannot stop Insurers from setting up their own TPA.

So it’s not what is being done that is questioned? It’s about who is doing it & the manner in which this is being done that makes it questionable.

Courtesy the insurance companies, the malaise that was until recently the exclusive preserve of senior citizens has now become universal in its applicability.

I am talking about the vagaries of what you may be called upon to pay as renewal premium on your health insurance policy.

In case of senior citizens, every renewal has, for quite some time now, become a hurdle. Through overt, and even covert, means, insurance companies had generally been making it known to senior citizens that they are quite an unwanted risk, and the insurance companies are ‘obliging’ these worthies by offering them renewal of their policies. If, for any reason, the senior citizen has missed out on the renewal date and the policy has lapsed, the hurdle becomes a nightmare. In any case, if you thought your renewal premium will be the same as what you paid last year since you have not made any claim this year, well, you may have to think again when your insurance company tells you your renewal premium is ‘loaded’. You have become a year older, haven’t you? That’s enough reason for a loading. And a loading of what percentage?? Anybody’s guess. You are almost completely at the mercy of the moods of the insurance company executive who ‘underwrites’ your renewal, since there is no prescribed, leave alone publicized, basis or pattern for this loading.

And now, you don’t have to be a senior citizen but a member of the sprightly brigade in the fountain of youth and yet suffer the same fate – all because, after years of paying premium, last year you ended up in a hospital and in the process, preferred a claim. In my elementary insurance education I had learnt that insurance companies ‘spread the risk’, they are indeed spreading this risk of loading the renewal premium here to the not-so-senior citizens too.

Following a claim, you would probably be prepared mentally to pay a higher renewal premium, but what you are not prepared for is the staggering hike – garbed ‘claim loading’ – that your insurance company asks you to bear. How staggering? Depends on the same mood of the same underwriter!

I have been hearing and reading lots of voices on this, suggesting various measures from meek submission – ‘thank your stars you are at least getting your renewal’ – to mighty legal action through Public Interest Litigation. The PIL lobby however piped down quite a bit when the incumbent Hon’ble Chief Justice of India, on taking oath, immediately followed it by a statement that he will not look kindly upon ‘frivolous’ PILs.

Meek submission is for the cowards willing to be cowed down by the might of the insurance companies; PIL is for the Don Quixotes. Even if your PIL is admitted by a stroke of luck – if you are that lucky, the unassailable mood of the almighty underwriter ought to have already worked in your favour – and proceeds to result in a favourable judgement, that may benefit just a few, and that too by way of an ‘interim’ relief!!

Is there no scientific way for you to have a go at this Goliath - of whimsical loading on your renewal premium - and bring him to his feet? Some workable solution between pleading for mercy and preferring litigation?? Good news is, there is.

You wanna beat them, you need to think like them.

How is it your insurance company is able to pose a ‘take it or leave it’ attitude when it comes to your health insurance renewal? ‘Cause your renewal premium is a minuscule drop in the ocean of their premium base, and not getting your renewal cheque will not impact the insurance companies top line even just a way wee bit. So, bluntly put, you are dispensable!

Insurance is a number game; the larger your number, the more significant you are to your insurance company.

Great, so how do you, the individual, manifest into a large number? Go forth and multiply?? Clone yourself into a million yourselves???

Don’t worry, I am not suggesting anything of that kind.

Am I suggesting you ride the general discontent of other renewal victims like you, be the leading lion and herd all these people together and start a movement??

Not a bad idea, except that I would believe you also have a few other mundane things like your career and home to invest your time and energy into.

If the solution is large numbers, and I am not advocating you initiate creating these large numbers, what am I saying?

Simple, the large numbers are available to you on a platform, and all you need to do is latch on to this instead of reinventing the wheel.

Have you heard of insurance brokers? Have you come across a dedicated health insurance broker? Look for one and place your renewal through this broker. This broker is already offering large enough volumes to the insurance companies that the insurance company cannot simply throw figures at this broker. Not just because this broker is more significant in premium size than you, the individual; but, and more scientifically because, for every renewal of a policy in which there had been a claim, this broker offers a dozen other renewals of claim free policies. This broker is already an aggregator of several renewals and therefore, your post claim renewal, placed through this broker, is seen by your insurance company in the backdrop of all the claim free renewals and fresh insurances that are also given by this broker to your insurance company. So, suddenly, you seem to matter. While this broker may not be able to completely do away with the loading in some cases, he will ensure that the loading, if unavoidable, is reasonable and not arbitrary, by effectively taking up your cause and case with your insurance company. So, with such a broker representing you, your renewal premium will be in the realms of predictability than astrology.

You may have some bonuses thrown in too.

This dedicated health insurance broker will have the wherewithal to offer you multitudes of services related to your health insurance – like renewal reminders, claim services like cashless coordination and so on – absolutely free! And he will even go beyond just health insurance but be your health partner too, offering several health related services – not just curative but, more importantly, preventive!

Afterall, while it is a sensible thing to always carry an adequate health insurance, to stay healthy and avoid getting into a hospital is an altogether better thing, right.

Recently, we came across news in an online Publication, business-standard.com

Withdrawal of cashless service for Mediclaim.

The decision by public sector health insurance companies to deny cashless services to their clients has been criticised by Fortis, a leading corporate healthcare chain.

Chains such as Fortis generate a significant portion of their revenue through health insurance policy reimbursements.

The Federation of Indian Chambers of Commerce and Industry was also critical. Pointing out that private insurance firms are managing to offer cashless services to policy holders, it wanted public sector firms to review their decision to suddenly withdraw this facility. “Withdrawal of an important component of a financial contract without sufficient notice is not fair and just,” it said. National Insurance Co Ltd, New India Assurance Co Ltd, Oriental Insurance Co Ltd and United India Insurance Co Ltd have said many leading hospitals are charging exorbitantly for treatments offered to insurance-protected patients. The hospitals say the problem is not with their fare structure, but with the policy packages offered by the insurance firms.

To read full news, click here

Experts from Medimanage.com give their opinion:

Sudhir Sarnobat:

Sudhir Sarnobat from Medimanage.com

Though there are cases of inflated billing from hospitals, that’s not the sole reason for higher claims. An Hernia is a secondary care surgery but often, insurance patients get this done in Tertiary care hospital because there is no norm that restricts the person from not visiting such hospitals. The normal cost of 30-35 K goes up to 60-70K because the overheads of such hospitals are higher. This generally inflates the cost but cannot be termed as wrong-doing by the hospital.

The higher claims ratio has two components: One is Premium & the Other is claims. For better claims ratio, the correct premium pricing is also an important factor. The way the premium pricing is done currently is also faulty & hence, that’s an area which needs to be looked into too.

Financial losses by health insruance company

Health insurance companies are trying to salvage the losses which are just increasing each year and here is another of their moves. Public Health insurance Companies (Oriental, New India Assurance, United, National) have announced that they are taking down large number of the hospitals from their list of network hospitals to access Cashless service. From the 800 hospitals which were in the Preferred Provider Network in Mumbai, only 90 remain, all others have been delisted.

Even some of the most reputed hospitals- Breach Candy, Bhatia Hospital, Jupiter, Lilavati and Hinduja have been removed from their lists. There are similar names which have been omitted from other metros like Chennai, Bangalore and Delhi.

So what caused this move?

fradulent claims by health insurance companies

Cashless service is offered by health insurance to the customers to avail hospitalization in select hospitals without paying any fees. The customers show their TPA card, fill a form and the hospital then receive the amount from the TPA, which is an intermediary between Health Insurance Company and the customer. Since the TAT or the Turn Around time, for the entire transaction is just few hours, there is less- than-effective examination of the documents and the some hospitals and some customers manage to file fraudulent claims. Most of the times, hospitals used to inflate their bills and in absence of rate cards could charge different rates for the same treatment.

Since the losses faced by health insurance are now running into hundreds of crores, health insurance companies are tightening the reins around the TPAs and hospitals. After examining the claims they found many Hospitals had filed fake claims and some TPAs were also hands in glove in the exercise. General Insurance Public Sector Association (GIPSA) has come decided to take stringent measures and delist all hospitals which are guilty of these practices as well as have implemented a rate card for treatments across all the hospitals.

This move is surely going to affect the consumers who had many options to choose the hospitals to avail cashless service. Now they will be forced to travel far or go for reimbursement claims. We ask our experts about this move and its impact on the customer.

Sudhir Sarnobat, co-founder of Medimange Health Insurance Broking Ltd, agrees that this move seems to be a knee jerk reaction to the losses faced, he says “Though TPAs have identified some incidences where over charging has happened, one cannot ignore the fact that the Tertiary care treatment facilities are available in these(big) hospitals only.”

He says that the basic essence of Mediclaim is to take cover against large, unforeseen health risks which are being treated at such hospitals. “Raising Rs. 10,000-20,000 is possible but the cashless really becomes useful when the claim amounts are large. Insurance companies are hitting that part and creating major inconvenience (for the customer)” he rues.

As a solution to the problem of overcharging, he suggests that Insurers should have created a list of diseases which can be treated at such hospitals and negotiated rates based on the Sum Insured.

Should there be Talks?

Reports suggest that the hospitals are still not aware of their status in the network hospitals, which suggests that there were no talks between the hospitals and the health insurance companies. So we asked the experts whether there should have been discussions between the parties.

Mr. Sarnobat replied, “As the insurers are essential for health market to grow, so are the healthcare delivery institutions (read Hospitals and Nursing Homes). Currently, the insurers view the hospital with antagonized view which needs to be altered.” He feels that Association of the hospitals should take a pro-active measure and self regulate and engage in a dialogue with the insurers to get a fairer deal.

He thinks it is the individual ego that is stopping the two parties from an honest dialogue and the decisions are based on few incidences more than wide spread activities.

Customers- the ultimate losers

While taking the policies, most customers were told that they had plenty of options to choose their network hospitals from (many boosted as high as 4000 hospitals), suddenly they will find themselves in a soup where either they need to travel far for Cashless or pay from their own pockets through the reimbursement route.

So for now, it’s bad news for the Hospitals and even more so for the Customers!

Health Isnurance Market in IndiaShe is the second most populous country in the world. She has been successful in gradually overcoming the global recession and is very much on her way towards achieving a double-digit growth and donning the mantle of being the fastest-growing economy in the world within the next four years. But even as she continues to march ahead and bask in the glory, there are certain challenges which she must meet, before her dream of becoming a power to reckon with, can turn into reality.

Of the many concerns which she must attend to, one of India’s pressing concerns pertains to the healthcare of her billion plus people. The World Bank report has cited health as the most significant challenge that India will face on her way to becoming an economic superpower. The rapidly increasing healthcare inflation, fast creeping lifestyle ailments and the increasing gap between professional and affordable healthcare, make health a costly affair and insurance a pertinent need. Hence, there is a need to undertake serious initiatives and bring about a reform in the way health insurance is handled in India.

With a 20% growth rate, health insurance has turned out to be the fastest growing segment in the non-life insurance industry in India. However, the Government’s attitude towards taking health not as a mainstream agenda for citizens coupled with unregulated nature of the healthcare provider industry, have brought in many concerns.

Measures that are essential for the all-inclusive growth of the Indian Health Insurance market:

      Changing the mass perception

Most people have certain notions pertaining to health insurance policies, that keep them from investing  in such policies. Some of the most common presumptions are, reimbursement of claims is difficult, certain ailments are not covered in many policies and the ones that are covered have waiting period of at least two years, the waiting period is too long and the terms and conditions included in the health policies are made in a way to provide excuses for non-reimbursement of claims, Health insurance is meant for the rich and educated, it is suitable only for those not over the age of 45. Many even think that health insurance benefits hospitals more than the policy holders. Here, the solution is to spread awareness.

      Government’s increasing role

The experience from other countries suggests that if health insurance is left to the private market in India, the poor may become more vulnerable. Hence, an active Government involvement in health is the need of the hour, agrees, Sudhir Sarnobat, Founder, Medimanage Insurance Broking Pvt Ltd, “The Government needs to bring the idea of ‘Healthcare for All’ at the centre of its political commitment and should promote small and medium hospitals’ growth in India. It should not get involved in providing healthcare at the secondary and tertiary care levels as the Government is bad at service delivery”. Also, the existing health insurance programs by the Government must reach the intended beneficiaries. Government should catalyze and guide the development of such social health insurance in India.  

      Regulator for the Healthcare Industry

Regulator for Health Insurance in India

Sudhir Sarnobat very emphatically explains the need for regulation, “Government should set up an efficient regulator for the Healthcare Industry and buy health insurance for its population from the insurers. This way government’s money will be utilized to buy healthcare for citizens while the responsibility of efficiency lies with the insurer. This way the Health Insurance portfolio will become very large in India and Health Insurers will innovate products to cater to the diverse requirements of the masses. There should also be a regulator set up to define the eligibility criterion for hospital infrastructure and service delivery parameters. The regulator’s role would be as watchdog for the industry where the interests of individual members would be tackled on priority.” Agrees Mahavir Chopra, Head, E-Business, medimanage.com, as he believes that self regulation by the Healthcare Provider Industry can help bringing in uniform billing for treatments.

      IRDA's intervention

IRDA

The current manner of functioning of the IRDA attracts a lot of criticism from the industry experts and intellectuals alike. Mahavir Chopra laments, “The IRDA currently works in a very ad hoc and reactive manner, and the authority has hardly led a development initiative”. About the absence of government’s active role in increasing the importance of Health Insurance (by buying it directly from Insurers), “IRDA”, says Mr Sarnobat, “can ask the insurers to develop insurance plans for lower middle class and poor of the country and set up targets for Insurers to increase sales of these products.

This could be treated as social sector responsibility by insurers and their urban sector growth should be linked to this. IRDA can also set up a sub-regulatory body to keep check on Healthcare Providers for insurance purpose only.”

      Product Innovation

Innovation in Health Insurance

A stunning lack of innovation in health insurance products remains one of the prime challenges faced by the sector. To add to this, “health insurance products for the lower middle class population are virtually non-existent” explains Mr Sarnobat. At such times, innovation must rule the roost, for products to be recognized and for sale to be catalyzed. In a well thought out manner, Mahavir Chopra, puts forth the telecom industry’s success as an example of product innovation. “Most health insurance products are push marketing type, rather than the pull marketing type. Most of the Insurance products are sold, but are rarely bought. Innovation can lead to increasing product penetration which in turn can help insurance companies in becoming a stronger part of the payment mode pie of Hospitals, and hence influence charges”.

      A complete Database

“There is a lack of a global database of the numerous patients’ health and claims history. This again acts as a deterrent. Insurance Companies should get together to form a uniform database of insured customers. In the West, there is a social security number which tracks health details of each patient. Hence, Universal Identification Number (UID) must be introduced, but if the database is not maintained, execution for healthcare records will be a herculean task” says Mahavir Chopra.  

      An Insurance Ministry

A separate ministry for the Insurance Industry, just like the Telecom Ministry is set up for the telecom industry, is an interesting idea floated by Mahavir Chopra. He says this can help in bringing a huge focus on the industry. For starters a Health Insurance Sub-Ministry under Health and Welfare Ministry with professional members could also be a welcome initiative, he says.

The growth of the Health Insurance industry can be smoother and faster, if these steps are taken in full measure and there is a healthy Government-private coordination.

Views expressed by experts in this story/article are personal.

IRDA's newly issued guidelines beneficial for the consumer

All hail the IRDA for it has come to the rescue of consumers! According to new guidelines issued by the Insurance Regulatory and Development Authority (IRDA) on the 2nd of April, 2010, it has become mandatory for health insurance companies to now renew health insurance policies irrespective of the payments already made by the health insurance company against the claims.

In lay man’s terms this newly issued guideline will bar health insurance companies from refuting the renewal of a health insurance policy based on repeated claim settlement. This guideline put into action after the modification of three acts: the Insurance Act, 1938; the General Insurance Business (Nationalisation) Act, 1972 and the Insurance Regulatory and Development Authority (IRDA) Act, 1999, will greatly benefit the older population which due to their advanced age requires repeated hospitalization, thereby repeated claim settlement.

Most of the times you forget to renew your policy by a mere 2-3 days, which causes the policy to relapse i.e start anew, wherein it is treated as a new policy and you lose the cover benefits given for the pre-existing diseases; put it simply you lose out on the waiting period already covered for pre-existing diseases and have to do with a new waiting period that is usually 4 years! The new guideline issued by the IRDA has cleared this fallacy up by making it clear that any delay in renewing the policy up to 15 days will have to be excused and the insurance company cannot revoke the benefits given for pre-existing diseases on the basis of non-renewal of the policy up to 15 days.

Moreover the IRDA has made it clear that insurance companies should not force consumers to shift from their current health insurance policy to another, except for when their policy is to be upgraded or discontinued with permission from concerned authorities.

IRDA has also stated that Health insurance companies should provide complete details about the renewal of a policy to the consumer, along with stating in clear terms if there are any changes in the payment of the premium by the consumer; these steps are to ensure that the consumer can make an informed decision whenever he opts to buy or renew his current health insurance policy.   

To know more, click here…

 

 
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