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Family-Health-Insurance-India-from-MedimanageIntroduction:

Life Insurance Corporation of India (LIC) the biggest, and most trusted Insurance Brand in India, launched Jeevan Arogya policy - a Defined Benefit Health Insurance Policy. 

The product essentially is a Hospital Cash Benefit Product with additional lumpsum benefits for surgeries.The product being a defined benefit product pays fixed amounts as per the policy conditions irrespective of the actual costs.

The claim for such policies are paid by submitting photocopy bills, hence can be claimed in addition to a claim made for any other Health Insurance policy (Personal/Individual, Corporate etc.)

Maximum Entry Age

65 Years. 75 years for Parents

Who can be covered? 

Self, Spouse, Kids, Parents, In-Laws.

This product should not be misunderstood as a standard Health Insurance product. The biggest mistake may have made, when buying such a product is looking at the Sum Insured for Major Listed Surgeries and comparing this with a similar Sum Insured of the usual Health Insurance products sold by General Insurance/Health Insurance Companies. This does not make sense, as the sum insured, in the case of indemnity based products,is generally the same amount across all and any treatment, and is not subject to a list...this ofcourse is subject to policy conditions.

What are the Benefits?

LIC's Jeevan Arogya is an Comprehensive/Advanced (read complex) Defined Benefit Product. In addition to Daily Hospital Cash Benefit for the number of days of Hospitalization, the product provides the following additional benefit:

- An additional lumpsum benefit for listed Major Listed Surgeries for a maximum limit of 100 times the Daily Limit.

- An additional lumpsum benefit for all listed Day Care Procedures at 5X of the Daily Hospital Cash Limit.

- An additional benefit for Other Surgeries (Not Listed ones) are covered by providing 2 times of the Daily Cash Limit, per hospitalization day.

How is Jeevan Arogya different from other Health Products in the Market?

Jeevan Arogya is an advanced version of Aegon Religare's Health Plan (which is/was an advanced version of Tata AIG General's Defined Benefit Health Product).

Such products have been aggressively sold over phone by Tata AIG General for years now. Aegon Religare Life recently launched this product with full page advertisements in Mainstream Print Media.

Here's what is Unique from other similar Defined Benefit products?

- The product's most unique feature provides the benefit of increasing Limits on Benefits every year. This, to an extent takes care of the healthcare inflation. There are 2 ways the limits would increase.

- Renewal Bonus: The Daily Cash Limits increase every year by 5%, upto 1.50 times of the Initial Daily Cash Limits. This is not dependant on Claims.

- No Claim Bonus: Addition of another 5% to the Initial Daily Cash Limit, without any maximum limit - when there are no claims in the previous year.

- Premium Waiver: In event of a claim for a Major Surgical Benefit, this feature in the product would waive the subsequent one year's annual premium.

- You can make payments in Monthly, Quarterly, Semi Annually, Annually. This is unlike most Mediclaim products where payment modes are either annual, or minimum quarterly.


Important Points to know before you sign up:

- The Maximum Benefit under this product is Rs. 4 Lakhs. With Healthcare Inflation in India being around 20% every year, this is a very low cover, if you are looking at a long term coverage.

- The lumpsum benefit, again, for certain Major Surgical ailments is very low, compared to the possible actual costs. 

- The coverage for other treatments (which are not listed) is Rs. 20000/- for this highest coverage plan in the product.

- There is no Cashless Network. However, there is a provision for Cash Advance upto 50% of Claim for Admissible Major Surgeries.

- Pre-Existing Ailments are excluded for life.

- Specified Ailments like Hernia, Piles, Gall Bladder Stone, Slip Disc etc. would be excluded for first 2 years of coverage. This is similar to the General Insurance Health Products. 

- Waiting Period of 90 Days for Claims related to Sickness, as against 30 days in Indemnity based products. 

Final Take:

LIC Jeevan Arogya, seems to be the most comprehensive Defined Benefit Health Plan from any General or Life Insurer, till date.

Though it covers all surgeries, the claims would be limited to the fixed amounts defined in the list under the policy, whereas, in a good indemnity based Standard Health Insurance policy, there would be lesser limits and restrictions, ofcourse, subject to terms and conditions. Moreover, if there is a large claim under Other Surgeries (which are not listed), you would lose out substantially in such policies. Hence, as mentioned time and again, you could buy this as an add on product to your Standard indemnity based Health Insurance product sold by General Insurance Companies.

In case you have further queries do write to our experts at expert@medimanage.com

A few days back, IRDA, the apex regulator of the Insurance Industry released a circular giving guidelines on introduction of portability of Health Insurance/Mediclaim in India with effect from 1st July 2011.

(Note, there are certain companies which offer portability of benefits to their products even today, but this is as per their own guidelines and procedures. Inquire with us, if you are interested)

The initiative to bring in a process and guideline to enable portability is a welcome step by IRDA. The circular released displays great intent on the part of the regulator to free the customer from being stuck with the same insurer, fearing loss of benefits of continuity, thus kick starting a competitive health insurance environment.

Ofcourse, there are flip sides and apprehensions. Government Insurance Companies hold more than 60% of market share in Health Insurance. Even today, Most in the industry are aware, that Govt. Insurers, leave other complex issues, are not equipped to port their own policy smoothly from one intermediary to another even in the same divisional office!  Owing to empanelment of multiple TPAs at every divisional office of Govt. Companies, there doesn’t seem to be a global customer-wise health insurance database readily available to retrieve past claims information, even within the same company.

 What will be the process for a policyholder to port his policy?

-          The policyholder will apply in the usual process (like a fresh application) to the new Insurance Company, providing current personal and health details of the family members to be covered in the proposal form.

-          The proposal forms are likely to have a section to enable portability. Information regarding previous coverage would be captured. Customers may have to also attach proof regarding previous continuous coverage.

-          The usual underwriting process would be carried out by the Insurance Company to assess the risks in the proposal.

-          If the proposal is accepted by the Insurance Company, the Insurance Company will have to provide relief for waiting periods which the customer has already gone through in the previous insurer’s policy to the extent of the previous sum insured.  For instance, in case a policyholder has been continuously renewing his policy for last 4 years with a certain Insurance company and now wants to port to a new Insurance company which has a 4 year waiting period for a list of ailments, such waiting period would be waived for this customer, through a credit of 4 years from the existing insurance policy. 

 

How will portability help customers?

Portability will empower unsatisfied consumers to move to an Insurance Company of their choice. Especially in the Retail segment, Portability will bring in more competitive environment and better service experience.  In the current scenario, renewal of health policies is the headache of the customer. In the portability scenario in the long run, Insurance Companies will have to win their renewals through better service, responsiveness and claims experience. The no. of policies an insurer is able to retain will reflect the customer satisfaction.

What would be the impact on premiums?

There is a good chance of a price war in the younger age segment. Insurers could slash premiums in the lower age bands to attract portability of existing customers.  

On the other hand, portability are not likely to help policy holders in the older age bands (say, 50 and above) and policyholders who suffer from pre-existing ailments. As such proposals are likely to be denied by the new Insurance Company.

Sudhir Sarnobat says: “Remember, Coverage in Car Insurance factors in depreciation, which is not the case with Health Insurance”, here the new insurer will take the risk as a fresh risk with full coverage and only increase in premium without factoring something like the degeneration of the health.” For instance, a policyholder at the age of 65 would like to move to a new Insurance company accepting the premium of the new insurance company. The new insurance company taking up a case exposing itself to a significantly higher risk of claim, without enjoying premium for the past claim free period, which the earlier insurance company enjoyed. So in effect senior citizens and people with pre-existing ailments (especially chronic ones) would not benefit a lot from portability.

Would Insurers be bound to accept a proposal for portability to their product? Can they reject an application?

 Note, the proposal and underwriting processes of Insurance companies will not change due to portability. The sum insured in the expiring policy cannot be the basis of what the new insurer will be ready to accept. The acceptance of risk would depend on the normal risk underwriting process. In fact, due to an already existing policy being declared for portability, the underwriting could demand additional claims history information for the past policies from the customer.

Once and if the proposal is accepted, the waiting period credits would have to be given in the new policy. The underwriter of the insurance company continues to hold the discretion to deny a proposal.

What happens if the customer applies for an increased sum insured in the new ported policy?

For instance, if the customer has a policy been continuously renewed for the last 5 years and has a sum insured of Rs. 2 Lakhs, and now he/she wants to port the policy to another insurance company with a higher sum insured of say Rs. 5 Lakhs. The portability relief in waiting periods in the new policy would only be to the extent of Rs. 2 Lakhs sum insured.  The waiting periods for the additional sum insured of Rs. 3 Lakhs would similar to a fresh policy.

What are the important things to take care when applying for portability?

- A customer looking at moving out to another Insurer should start the application process atleast 45 days before the expiry of the existing policy. This will give ample time to the new Insurance Company to underwrite and accept the risk and then retrieve information from the earlier Insurance Company. 

- The customer should preferably employ a Broker. Since a Broker deals with all Insurance Companies, one would get good guidance and advise regarding the Insurance company to select.

How will sharing of data between Insurance Companies on a common platform affect the consumer/industry?

Firstly, Insurance companies, especially the government companies and many private players do not seem to have a CRM in place, which can retrieve Policyholder wise data across various years of renewal. Secondly, there is no unique id or account number across Insurance companies for the information for one policyholder to be consolidated. IRDA in December 2010 did talk about an unique Insurance Account no.  Only once this unique number issuance is effective across all companies, the consolidation and hence sharing of information would be possible.

Some questions which we expect answers in coming times:

 1.  Insurance Companies would have to make major changes in their processes and database infrastructure to be able to retrieve information of one customer across several years of renewal. In case the customer has moved from one divisional office to another, then the issue becomes even more complicated.  Most government insurance companies are not interconnected to retrieve information of one customer across divisional offices.

2. Till the unique Insurance Account no. becomes effective across all Insurance companies, there would be no consolidation of data possible. Insurance companies would have to share information on a case to case basis. This is going to be an extremely tedious process, with huge bottle necks.

3. We expect more clarity on binding the insurance company of the expiring policy to provide the required information to the new insurer in specified time limits, so that smooth portability can operate. Any mischief here could result in major hiccups in porting the policy.

4. The circular currently only talks about credit for waiting period for continuous renewals and not for credit related to No Claims Bonus or Discounts, which is fair as retrieving information regarding claims is even more tedious in the current data management infrastructure.

 

Star Health recently launched their new product – Star Health Unique, which covers select Pre-existing diseases/conditions after a waiting period of 11 months.

Highlights:

Apart from the standard hospitalization cover for accident and sickness, the main highlights of this health plan are:

  • Covers select Pre-existing diseases/conditions after a waiting period of 11 months, which is considerably low compared to the earlier lowest of 3 years waiting by Apollo Munich.
  • Covers Individuals upto 65 years without a Medical Check-up.

Important Conditions:

The important conditions you need to know before you buy Star Unique Health Insurance:

  • The premium of this product is higher than the premium of standard products including the ones from Star.
  • 30% Co-pay on all claims.
  • Select Pre-existing Diseases are covered for 50% of the Sum Insured.
  • Select Pre-existing Diseases are not covered.
  • Differential city-wise premium.
  • Sub-limit on various ailments
  • Mandatory cover for 2 years. If you claim in the first year, the second year's premium is deducted from the admissable claim amount.
  • Cover ceases at the age of 70 years, after which the insured has the option to move to any other existing product of Star.

Talk to our Expert to know more: Write to expert@medimanage.com with age details of your parents.

The pre-existing ailments which are included in the 1 year, 2 year and 4 year exclusions are mostly those which require a hospitalization treatment in the short term, even before the policy has been applied for. The ailments not part of the waiting period seem to be those which are generally controllable diseases like Hypertension and Diabetes, which do not have an immediate requirement for a treatment.

In a time where most other private insurers add a permanent exclusion in the policy on any treatment directly or indirectly related to Hypertension or Diabetes, Star Health’s inclusion of these diseases is a welcome step.

The policy opens up cover for an entire Indian population who has chronic but controllable health conditions like hypertension or diabetes (including those who have undergone a Bypass Surgery (CABG)

Talk to our Expert to know more: Write to expert@medimanage.com with age details of your parents.

Why a Declaration based Health Insurance underwriting system could work better, compared to a Medical Check-up one in India?

In absence of any civic medical records, Health Insurance Companies depend on Medical Tests for underwriting (pricing) the Health Insurance coverage for people beyond a particular age. Medical Tests come with their own flaws. Firstly they capture information only for the particular time period. So if I have climbed 3 floors to reach a laboratory and got my blood pressure checked immediately, it would show High Blood Pressure, and the lab test would conclude me as a Hypertensive.  Those who are from Healthcare would agree, that Medical Check-ups are also prone to errors. I have experienced a case in the past where the mother of a renowned doctor was denied coverage based on pus cells detected in her urine. The daughter put her mother on medication and contested the results with the Insurance Company demanding a check in another lab after a week. The new check-up reports did not show any trace of pus cells, and the mother was covered without any exclusions. This instance clearly deleted all my dependence on medical checks as the critical data point for underwriting.

On the other hand, a clear declaration of health conditions from the customer makes him/her responsible for entering all the information he is aware of.

Talk to our Expert to know more: Write to expert@medimanage.com with age details of your parents.

analyzing future of cashless mediclaim in India

Preamble

Last 3-4 days, we have been seeing a lot of news in various media about cashless network hospital list being brought down to fewer in numbers & this list does not have big hospitals where the treatment cost is high & hence, have a greater need for their presence in list. We fear that these news items have created confusion in our members’ mind & hence, here is small explanatory note from our team.

Genesis of the thought process

Insurance companies have been witnessing inflated, fraudulent & unwarranted hospitalisations claims when the patient had declared that he/she has insurance cover & wishes to go for cashless treatment. Also, an analysis of cashless claims brought out pointer that 80% hospitalisations (by amount) happen in only 25-30% hospitals. The advantages of curtailed list are envisaged as follows:

1). Limited hospital list (around 450 all over India) would offer better administrative control.

2). TPAs can drive more business to small number of hospitals & hence, can demand volume discounts.

3). With better administrative control, all bad claims (fraudulent, inflated & unwarranted) can be reduced to a greater extent.

Methodology adopted

New India Assurance Company (it’s the largest, has major Health Insurance exposure and their current CMD has good rapport with other PSU Insurers’ CMDs) had taken the lead & appointed four of its empanelled TPAs as nodal TPAs (one for each region i.e. East, West, South & North) & asked them to draw a list of around 100-125 hospitals in each region. Only these PPN (Preferred Provider Network) hospitals would qualify for cashless treatment. PPN is a very common concept in west & helps insurer have better control over claims without compromising the quality of care.

 How it impacts you?

1). Currently, this does not impact corporate members as this arrangement is meant for only retail / individual policy holders.

2). However, looking at the success of this arrangement, soon, this may get extended to corporate policy-holders too.  

3). Currently, only New India, Oriental Insurance & United India have agreed for following this network. National Insurance has their own ideas about how to implement this & hence, declined to be part of this network as of now (see news mentioned above).

What are the shortcomings of this system?

1). Cashless treatment becomes very useful when the treatment is costly. With no tertiary care hospitals in major cities being part of this Preferred Provider Network, members would be forced to raise the funds for cost of treatment before the treatment starts.

2). Cashless treatment has been one of the major attractions which has helped increased Mediclaim penetration in Urban & Semi-Urban India. With these kind of restrictions, the new policy sales may suffer an impact which is detrimental to overall claims experience. (New policies sale brings in premium without any claims in its initial years which help insurance companies improve their claims ratio.)

3). There is no proper methodology adopted for selection of these hospitals & many network hospitals are in dark about this change. Without any bench-marking, the quality of care may deteriorate & just for want of cashless, members may have to face inefficient service levels.

What should be done to implement this better manner?

  1. 1). A right mix of Tertiary, Secondary & Primary care hospitals should be ensured while finalising the city-wise Preferred Provider Network.

  2. 2). A stringent & transparent criterion should be adopted for selection of hospitals which should broadly look at following features:

    a). No. of Beds
    b). Infrastructure & Manpower quality
    c). Certifications & Statutory Compliances like minimum wages, PF etc.
    d). Published rates for various treatment & acceptance of Insurance Tariffs
     
  3. 3). A formal Third party annual audit & review methodology should be decided by the insurance company for these PPN hospitals.
  4. 4). In case of occurrence of fraudulent practices, the hospital should be banned for a period of three years and even reimbursement at such hospitals should not be allowed.

 

Summary

Though the initiative taken up by insurers has shaken up the hospital industry & made the consumers anxious, we have reasons to believe that this is a start of much needed changes in the Health Insurance industry. What we expect is well thought-out strategy derived out of data available with the insurers & then an efficient implementation of the same in phased manner to ensure that the consumer is not hassled unnecessarily. 

In case you have any queries, please feel free to connect with me at sudhir [at] medimanage.com


About Medimanage:

Medimanage is India’s first boutique health insurance broker, with an integrated service model which provides Unbiased Health Insurance Advisory, Technology based delivery and Professional Claims Assistance. To know more contact purandar [at] medimanage.com

 

More interesting news just today

Public sector insurers to push for a common claims settling agency (http://economictimes.indiatimes.com/personal-finance/insurance/insurance-news/Public-sector-insurers-to-push-for-a-common-claims-settling-agency/articleshow/6154912.cms)

  •  New Items for reference

Insurance Cos slash list of hospitals in Mumbai for making fraudulent claims(http://timesofindia.indiatimes.com/City/Mumbai/Insurance-cos-slash-list-of-hospitals-in-Mumbai-for-making-fraudulent-claims/articleshow/6145243.cms)

One PSU insurer stays with cashless Mediclaim

(http://timesofindia.indiatimes.com/India/One-PSU-insurer-stays-with-cashless-mediclaim/articleshow/6153259.cms)

 

 

 
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