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Medical exigencies and an empty wallet

When faced with a medical emergency, you pay cash or use your credit card, instead of asking why the hospital is not accepting your cashless medical insurance. This is exactly what harassed consumers found out when health insurance companies recently stopped cashless treatment making customers pay first and then get reimbursed.

Health insurers blamed private hospitals of inflating bills that were paid by the insurance companies. On July 1, four public sector insurers New India Assurance, Oriental Insurance, United India Insurance and National Insurance stopped cashless insurance services in some big hospitals in big cities.

Instead of cashless, these insurers are planning to introduce a new variant - Premium Mediclaim. You will be charged a higher premium than a regular health insurance policy to avail cashless facility at major hospitals.

TAKEAWAYS…

* Evaluate an additional plan- Can use a combination of plans 

* Evaluate switching the plan (not a preferred option)

* Create a corpus for health emergencies- Replenish the corpus with the refund from the insurer 

* Credit cards can save in urgent times - Own one card with decent limit

To read full news, click here

Experts from Medimanage.com give their opinion:

Sudhir Sarnobat:

Sudhir Sarnobat from Medimanage.com

As we have repeated maintained that the differential product with high premium for claiming expenses in big hospitals is akin to legitimizing their higher charges for standard procedures.
We will continue to maintain our stand that the efficient network needs to have primary, secondary and tertiary care hospitals in right proportion of strength. Then only, the PPN would be a workable reality.
Buying another policy with higher premium would not be a feasible idea in long term. We must look at rationalizing the consumption pattern of healthcare seekers thru health insurance.
Creation of personal Health Fund (starting at early age) by investing in mutual funds with tax benefits (lock-in of 3 Years) would be a good intermediate strategy to supplement your existing health insurance till the confusion over health insurance benefits is resolved.

Pay higher premium, go cashless to big hospitals: insurance plan in the works

To break the stalemate with big corporate hospitals, the four state-owned insurers are planning to introduce a new variant of health cover — the Premium Mediclaim. Subscribers will be charged a premium higher than that of a regular health insurance policy, but will be offered cashless facility at all major hospitals on the insurer’s network.

“Big hospitals have agreed to revise their package rates and share it with us in a few days. We will compare it with a list of ‘reasonable rates’ that we have prepared in consultation with doctors and third party administrators (TPAs). If they are within a reasonable range, it is fine. Else, we may introduce a premium product for customers who insist on getting treated at 5-star hospitals,” an insurance official privy to the negotiations told The Indian Express.

The four general insurers — National Insurance, New India Assurance, United India and Oriental Insurance — had taken about 150 hospitals, including the big ones, off their network list from July 1 following instances of differential treatment and charges for insured patients.

To read full news, click here

Experts from Medimanage.com give their opinion:

Sudhir Sarnobat:

Sudhir Sarnobat from Medimanage.com

Underwriting, which is one of the most important part of Insurance, is based on minimising risk & identifying innovative solutions to make the product attractive. The idea being used here lacks both. It’s like if the hospitals are charging “high” let them charge high. If there are buyers who want to buy this, we will have product to match.

Another way to look at it is the “adverse selection” angle of the insurance. Insurers deny risks which are basically skewed and which may bring heavy losses to them without any doubt. The basic premise of this product is that the insurer is ready to pay claims in big hospitals. Then the buys would be those selective members who wish to spend money. The premium being high, the insurer would have tendency to recover & will consume high, not because he needs it but because he has paid higher premium for it. It’s akin to those members in current scenario who buy 5,00,000 cover & then go to big hospital & spend 3.5 lakhs for a simple Hernia or Gall Bladder. These are the tendencies which are bringing losses to insurers (apart from other lack of controls & faulty underwriting) & one more product like this will only further the losses.

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.

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.

 
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