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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

What to Compare in a Health Insurance Policy in India?


The kind of participation Government of India has in Healthcare is clear from their budgets for Healthcare compared to developed/developing countries, especially the European ones. With the rocketing trend of Healthcare expenditure, there are only 2 ways you can save yourself from any Health related expenditure killing your savings in India. 1) Ensure your family lives a healthy lifestyle and pray, that you get no disease 2) Get a Health Insurance.

Health Insurance, worldwide is the best system having the capability to empower the common man to use best of quality healthcare at most affordable prices.  While, the healthcare industry in western countries being more organized abroad has resulted in more comprehensive products out there, the core Health Insurance products in India, in their current form, can actually be called Hospitalization Insurance Plans. The plans cover expenses related to only Hospitalization. These hospital costs could be for accidents as well as sickness, of course subject to a long list of terms and conditions.

Health Insurance Expert India

OK, let's get to the point. We are here to unravel the best path to finding the most suitable product in the market. With more than 25 General Insurance Companies marketing and selling more than 50 Health Insurance products, with exponentially higher terms to compare this looks like a tedious task.  Let's give it shot. Here we go:  

# 1 Cut out the frills. Go Basic:

Most frilled products in India are not cost effective. A product which takes almost double the median premium, and offers unnecessary frills, which you dont actually need, is a strict no no. We have all traditionally lived with routine medical expenses like Consultation expenses, Dentists bills, Medicine bills, and such costs are therefore manageable by most of us, unlike a huge hospitalization bill which could eat way more than a couple of months’ salary or savings.

Bottomline:  You should first look at covering ALL members of your family for the larger “unmanageable” costs, which could burn a hole in your overall financial planning before signing for any fancy product.

# 2 Don’t Compare Premiums:

Never start by comparing premiums. Health Insurance is more than a Mumbai-Delhi Air Ticket, which you can compare and buy from comparison/aggregator websites. Health Insurance is a long term complex contract coupled with complex services. This requires insights into the overall insurance contract (called policy wordings) over and above price comparison. Either you need to yourself get into comparing the features in detail, or take help of an unbiased health insurance advisor.

Bottomline:  Understanding the benefits and terms is more important than the cost you are paying.

# 3 Look for Maximum Renewal Age:

Maximum Renewal age is the age on which the coverage on your health insurance would be discontinued. 

Comparison of Renewal Ceasing Age in Health insurance in India

This could be for all members or for a specific proposer/member, depending on product to product. Remember, your core goal, when you buy Health Insurance is to save yourself from mounting healthcare costs right through your life. A product, which ceases renewal, while you are still alive and need it more than any time before, is a BAD product. Sift through all products and find out the maximum renewal age. Better, look for Lifetime products. Rule out all products, say, which do not cover your family members for a reasonable lifetime. As medical science progresses and becomes more accessible to the common man, Life expectancy in India will move higher from the current average of around 70. A product with a lower renewal ceasing age than 70 years is a complete no no.   

Bottomline:  An insurance product which does not work, when you most need it, is not insurance.

# 4 Look for Treatment wise limits & Copay: 

Look for treatment wise limits in the products. Treatment wise limits basically cap the amount you can claim for a particular surgery under the policy. Say, there could be limits for Cardiac treatments of Rs. 1.50 Lakhs or for Cataract for Rs. 20000 per eye. Such limits would cap your claim, even n when you have a large sum insured under the policy. You need to weigh this in, before you sign up. Some products I remember are United India’s Family Medicare, Star Health’s Red Carpet have such limits. Bajaj Allianz General and ICICI Lombard have a limit only for Cataract.

Comparison of Surgery Limits in various mediclaim products in India

Another condition, is the COPAY. Copay is basically is the share of admissable claim that the customer would have to pay from her own pocket. For instance, if the claim is of Rs. 50000, and the admissable claim is Rs. 48000. If the copay is 10%, the copay amount would be Rs. 4800. The Total amount you would have to pay is Rs. 6800/- (Rs. 2000 deduction in the policy + Rs. 4800 of Copay)

Copay is currently in

- Oriental Happy Family Floater at 10% of the Sum Insured upto Rs. 5 Lakhs Sum Insured.

- Bajaj Allianz has a copay of 10% for treatment at Non-Network Hospitals in their Health Guard products, and 20% in Silver Health.

- Star Senior Citizen Red Carpet has a copay of 30%. For Pre-existing the copay is 50%.

Bottomline:  Know what you will not get paid.

 

Health Insurance Advisor India

# 5 Understand Day wise Cash limit Health Products:

There are some products marketed and sold as Health Insurance (Aegon Religare Life, Tata AIG General are the popular ones) which provide a daily cash benefit for the no. of days one is hospitalization. Most surgeries require an average of 6-10 days, so at the Rs. 5000 per day limit multiplied by 10 Days would pay Rs. 50000 per hospitalization, irrespective of the actual charges incurred. An Angiop lasty in this will unknowingly burn a big hole in your pocket. Please avoid this product for your core healthcare expenditure risks or as an alternative to a Standard Health Insurance product. 

Difference between Health Insurance and Daily Cash Limit Products

This product is more like an add on cover.  

Important Note: Do not confuse the above with products that have specific limits on Room Rent. Room Rent Limits, to an extent, make sense both for the customer, as well as the Insurance Company, as they categorize people paying a higher premium in the higher eligibility bracket. This has been further discussed in detail below in this article.

Bottomline:  All plans which are called Health Insurance, may not be what you are looking for.

 # 6 Zero in on a Coverage amount/Sum Insured:

Sum Insured is the total annual liability under the policy. Since this is a long term product, you should look at the maximum available cover you can afford. Remember, a sum insured of Rs. 2 to 3 Lakhs will have no value, by the time you start using it. As per a very recent report on Healthcare in India by Tower Watson, the medical inflation in India is rocketing anywhere between 17 to 20% annual.

Option of Upgrading Sum Insured:  The option of upgrading the cover at a later stage when you are older is dicey and complicated. There could be a requirement for a medical test. Moreover, if you or any of the family members contract a new disease in the interim, the ailment would excluded for the upgraded amount. Upgrade would be almost like taking a new policy at that age, which I would not recommend.

Bottomline: Look for the highest cover affordable. An I-will-upgrade-it-later option may not work.

 # 7 Premiums change, know how?

Premium in Health Insurance increases as per increase in your age, but, there’s something about the no. 45. Insurance Companies dislike this no. Have a look at the rate charts, and you will be surprised to see good jump in premiums after one crosses the age of 45 yrs. In some cases, the increase in premium is as high as 50%. You need to factor this, before you sign up Comparison of premium in Old Age for Health Insurance in India.

Ensure premium remains affordable in your retirement days, and does not kill your hard earned retirement savings.  

Note: you need to factor in that these premium charts can change even tomorrow, like they have changed earlier, but looking at the current charts for older brackets would get you a flavor of the company’s pricing philosophy for older age bands.

Note, the average premium in the chart is the average of premium paid by a person between the age of 30 and 65. The values being compared are only indicative. Future rise in premium due to loading, change in premium charts have not been taken to consideration.

Bottomline: Know how the premiums change in the long run.

  # 8 Credibility, Check.

Look at the history of the company. If it is a new company, you could look at the history of the promoters and their businesses. Generally, a company or set of promoters known for their ethics and excellent governance, venturing out into Insurance would be a decent bet. Get information from your advisor, on the overall claims experience, on responsiveness, about changes and number of changes in the product, since it was launched.  Too many or too large changes, indicates there could be more tomorrow.  

Bottomline: History in the best teacher.

  # 9 Products for older age/Senior Citizen family members.  

Most Insurers, including the ones ‘specialized’ in Health Insurance resist covering members above 45 years. Remember, you need to somewhere take responsibility of not covering your parents, earlier in their life, and not completely blame Insurance Companies for not covering them, now.

There is no perfect product available for Senior Citizens. All products for senior citizens are restrictive. You need to settle for a product, best affordable to you, even if it has co-pay, exclusions and other restrictions. Again, if your parents have existing ailments, then this becomes more complicated.

Comparison of Senior Citizen Mediclaims

Bottomline: There is no Perfect Product. Definitely not for a Senior Citizen.

  # 10 Finally, Ensure you have a Good Advisor:

I have always said this, ensure you spend good time in deciding, who is your intermediary. Once you have taken pain to finalize a good advisor, you are more than half way done. 

A Good advisor is one who would provide:

  1. Unbiased advice, without any special affiliation to any Insurance Company.
  2. Provides Routine services like Pickups, Renewals etc.
  3. Assists and Guides you at the time of Claims.

Health Insurance industry is witnessing huge changes both in products, price as well as processes, being an insider, it is sensible to have an expert on your side, who updates you on changes, their impact on your coverage and suggest change in course, in case necessary.

Bottomline: Insurance Company have their own vested interests. Have someone on your side.

Note: There are other terms & benefits comparable like Pre and Post Hospitalization, Benefits like No Claim Bonus/Discount, Loading on Premium due to Claims History, 1-2 or 4 year waiting Period for Specified Ailments, Pre-Existing Waiting Period. These have not been considered as they do not make a very big impact on the decision to purchase a long term Health Insurance product in India.

 Health Insurance Advisor India

An open letter from a Health Insurance Customer

Dear Insurance Company,

Hi, I am your Mediclaim Customer. I am 30 years old, married, have a kid. I own a house in the suburbs of Mumbai and have recently bought a small car. I am well read, and hence fairly aware of basics of financial planning and securing my future. Yes, I believe in Insurance. I bought my first insurance policy (term life) when I was 23 years old. Yes, I know, I am the type of customer, who you vie for – I am the one who appears as “Sec A2” - target customer right at the top of all your sales spreadsheets and presentations. 

I have been your customer since 2007. It started off pretty well. I received fairly good service from your end. But…lately, I have been very uneasy with our relationship. In fact, I think I have lost trust in you. OK. Stop getting surprised; I know you are  part of a group valued in Multi billion dollars ; I know you have presence in 100s of countries worldwide, you surpass all the solvency norms set by the regulator, and yes, your claims settlements are improving . But I have still lost trust in you. Can you help? Please give me your 5 minutes to explain.

Health Insurance Advisor India

4 years back, when I was 26 years old, I decided to buy my own health insurance policy. I had a cover in my dad’s policy, but my calculations showed that I was not covered adequately. I therefore approached a health insurance broker. He did a good job, helping me compare various mediclaim policies available in the market, and took me through how this whole mediclaim thing works. I signed up for the most attractive one (the one which had the best features and the lowest price).  I was proud I had done my homework, just like my dad would.

2 renewals had passed, when I received the 3rd years' Renewal Notice. The renewal notice talked about increase in premium by a shocking 500%, with the reason “adverse claims ratio and Medical Inflation” mentioned on the letter. A premium of Rs. 3000 for 2 Lakhs coverage for a family of 3, has increased to Rs. 13000! OK, I understand Medical  inflation, but I am sure it wouldn’t have been grown more than 50%, then how was the remaining 450% increase in premium to be understood? Did I have a role to play in the adverse claims ratio you faced? Could I have helped avoiding it? At first, I was sure, the premium mentioned was a printing error, but when I realized it was correct, I felt cheated and went berserk. I called the Broker (who himself was shocked, and worried), set up con-calls with the Insurance Company’s representatives, escalated the matter to the regional office, all I received were templated/recorded answers....Phew...I finally gave up.

I refused to renew the policy with this company, and heroicly pledged not to deal with this organization ever. My Broker suggested I port my mediclaim policy to another player. This time, I made sure this player was an ethical, reliable name. I finally zeroed on to a large Insurance company which had an alliance with supposedly “the world’s largest insurance company”. 

I moved on.

Cut to today, I recently received a call from my Broker, the health insurance company had removed the No Claim Bonus of Discount completely from my renewed policy this year, without citing any reasons at all. I got this strange feeling of déjà vu.  Forget prior information, I was expecting some communication from this big brand, but there was none. 

In this world of extreme transparency and hyper competition, I am amazed at this unusual apathy shown by the best of world Health Insurance Companies in India.

When I called the Insurance Company representative, all he said is that Medical Insurance is a “yearly contract”, and terms are subject to change on renewal.  A yearly contract!??!!? Whoa? When this medical policy was sold (twice by different providers) to me, I was explained various clauses in details like 2 years waiting periods, 4 years continuous renewals and the USP – “lifetime guaranteed renewal”. How can a mediclaim which assures lifetime renewal be a yearly contract?? Isn’t this a classic paradox?

OK, I know you are busy….So let me stop complaining, forget the past, and give you one more chance, the last one. Let me plan for my all critical post retirement/old age Healthcare costs. So now I understand the mediclaim policy is a yearly contract. I understand, you are making losses, you are unable to control the claims in Health Insurance and you are “forced” to make these “small” changes in the contract, every year. And yes, I should feel fortunate, that second time on, you atleast did not increase the premium by 500%.

I understand all that, but looking at the rampant changes you have been making in the policy wordings and process, I am really in a fix. I am now not sure what the policy would evolve into when I reach my old age. The way things are moving, the one thing, I am sure of is that the policy would be gravely different from what it is today (I am sure, a money making product for you, by then)

So, How do I predict the policy conditions and plan my post retirement healthcare expenditure?

Till when, and to what extent you would keep changing the terms? How do I assure myself, that the terms would be favorable for someone like me who bought his policy at 26, paid you premium, without claims for 14 years, from someone who is 40 that time and is buying a fresh policy??

Now, I am getting really confused. When you sold the product you encouraged me to buy these, clearly calling them "long term investment", and now, on renewal you are calling it a “yearly contact”.

Would you continue to guarantee lifetime renewals, or would you add restrictions on co-pay, remove no claim bonus, remove all large hospitals from the cashless network or worse, spike the rates by 500% every year, when I am growing older?.

 Now, it's all boiling down to plain trust. How should I trust a selectively transparent, for-profit organization like you? 

Is Mediclaim a policy with long term commitments or is it a yearly contract?

Would love to hear an answer. Can you help?

 

Thanks,

Your Health Insurance Customer.

Though, the concern being raised is real, please do note that, this is a work of fiction by the writer.  The Insurance companies described in this post, do not add up to targeting any specific company.

Health Insurance Companies India

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.

 

Worried about health insurance?

“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.

Hospitals overcharging Patients under Cashless Claims is under the media buzz since a few days.

Here is a quick post which reasons why Hospitals overcharge Cashless Claims:

No Contracted Rates with Hospitals:

TPAs do not have contract binding rates (treatment-wise) with Hospitals in their network. Globally, TPAs contract treatment-wise rates with each Hospital in their network. Treatment wise fixed rates would remove the disparities and anomalies that Hospitals currently enjoy. The core of the issue is TPAs lack negotiation power with Hospitals.

Why do TPAs lack negotiating power?

In India, more than 70% of the total hospital billing is still out-of-pocket and not through Insurance Companies or TPAs. Hospitals are overflowing with patients and therefore don’t depend on TPAs for their revenues. (Imagine a 100 employee TPA bidding to negotiate with a Hinduja, Apollo, Fortis or an Escorts?)

1). Insurance Companies under demands from Large Corporate Customers to list a large hospital, unconditionally pressure, TPAs to include certain hospitals into their network, without rates.

2). Add to this, TPAs are also under pressure to have a large and geographically wide list of close to 3500-4000 hospitals under their network. Due to such a large spread of hospital payments in the network, they cannot guarantee revenue to hospitals, which is the trump card for Health Claims Administrators worldwide.

3). Every division of a Government Insurance Company in a bid to offer the option of a TPA to large customers, use services of 6-8 TPAs. Customers are therefore spread across larger no. of TPAs.

4). Customers (especially Corporate/Group) want to decide their hospital. TPAs currently don’t take the healthcare responsibility of recommending hospitals. Hospitals therefore get 'business' on the decision of the consumer and not the administrator.

Delayed payments to Hospitals:

This is the justification each hospital will give. Insurance Companies (mostly Govt. and some Private) due to their internal deep rooted inefficiencies have been guilty of delaying payments to TPAs. TPAs being small sized companies depend on funding from Insurance companies and therefore in turn delay payments of the Hospitals. Some Hospitals in need of liquid cash, have been known to discount their authorized cashless claims with Banks and Financial Institutions, ofcourse at a cost. Every Hospital would be ready to reduce their costs if they are committed to payments in say, 30 days. 

Recently a new Insurance company has been sucessful in negotiating better rates with Hospitals on the contracted committments to pay on time, with interest penalties.

Lack of Uniform Grading:

There is no regulating apex body or uniform grading of hospitals in India, which makes contracting of rates with Hospitals all the more subjective and unscientific. Rates charges are merely based on location and popularity and not on the quality and consistency of the care and treatment.

Recommended Solution:

Apart from the recent kneejerk delisting/reduction in number of hospitals (to ones which agree to contracted rates), by Insurance companies, here are some solutions our experts recommend. 

1). Health Insurance premiums have grown by 10 times in 5 years. Insurance companies should work towards increasing their negotiating capabilities with Hospitals, by bringing revenue dynamics into picture.  

2). Govt. Insurance Companies should reduce the fragmented way in which it engages TPAs. This will bring more business to lesser no. of TPAs, and hence bring administrative and financial control on claims.

3). Insurance Companies should lobby with the Central Government and Ministy of Health and Welfare to bring in an apex body which enables self regulation and grading of Hospitals and other Healthcare providers.

4). Selection of Hospital Network should be based on quality of Healthcare. Like the "gatekeeper model" in the west, TPAs should be empowered to take responsibility of healthcare beyond negotiation of rates. They should be in a position to recommend the healthcare provider to the customer.  

5). Insurance Companies and TPAs should take into account demography and economics and scientifically fix a schedule of treatment-wise limits for cashless claims, in its policy condition.This way, Insurance Companies or TPAs would pay upto the limit and leave negotiation of the amount charged over the limit to the Customer. 

Do let us know if you have any questions or feedback. Write to Medimanage @ email [at] medimanage [dot] com.

 

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!

In the high-performance-high-aspirations age we live, more and more Indians live as nuclear families in distant cities away from their own parents.

Long gone are the days, when Dada-Dadis or even Nana-Nanis used to be the doting baby care guides. In a way, Baby Care today has become a case of trial-n-error internet browsing or picking up a famous book recommended by your nearest book shop.

What better a gift for first time mothers, on Mother’s Day, than a well-researched simple guide to manage their most valuable little ones?

The Book – The Great Indian Guide for Baby Care was launched on the eve of Mother’s Day (8th May) by renowned Pediatric Cardiologist Dr. Abdul Rasheed of Asian Heart Institute Mumbai.

With contributions from leading pediatrics and gynecologists, the well researched eBook has been compiled in lucid language keeping in mind the challenges of today’s young mother.  The eBook uniquely blends global best practices in Infant Baby Healthcare with a rich Indian flavor, perfect for the Indian Household.

The 109 page book is produced by www.medimanage.com; a free web-based Preventive Health Magazine. “We found that most books available in the market today are western, outdated or too thick for today’s tired mommies to go through. That’s when our online magazine thought of writing a simple eBook” Says Mahavir Chopra, Head – eBusiness, Medimanage.com

The eBook, currently available in English, can be personalized as a gift and downloaded from the website at the following link

http://www.medimanage.com/e-book-sign-in.aspx for free.

About Medimanage.com

Medimanage.com (http://www.medimanage.com) is a free India-centric online health magazine focused on day-to-day preventive health. The website provides lucid original content on 9 important aspects of Preventive Health, right from Weight and Diet to Parents’ Health and Health Insurance.  The website was launched in October last year, by Medimanage Health Services Pvt. Ltd. – A Preventive Health Management Company headquartered in Mumbai.

“The articles in the website as much as the chapters in this book are written by professional writers often in layman’s language or even in story form, so that they appeal to readers and encourage a healthy lifestyle.” – Says KS Sankar –Editor-in-Chief of the Website.

 

Keeping with our tradition of simple to-the-point health tips, here's our message this World Health Day 2010!

Do give us your feedback on the message/creative by putting comments below.

Medimanage World Health Day

Cheers!

Mahavir Chopra

From Biscuits, Cooking Oil, Instant Noodles, Toothpaste, Chewing Gums... there are one too many advertisers in India, attaching the word - Health, Healthy,without any responsibility. In fact, if you visit McDonalds, even their  table pamphlets talk about health with great prominence!

Ads which claim that a change in cooking oil can help your kid pass with flying colors in the exams. Biscuits which make you lighter and more energetic.Toothpastes with Namak, which can help you prevent toothaches. Most of these claims are completely questionable.

Advertisers abroad, need to prove their health claims for their products. They go through rigorous approvals, before they can proclaim anything as healthy - whereas we are in a free for all scenario!

You would be surprised to know that Nestle's Maggi projecting itself as a Healthy Snack, is banned in various developed countries including the UK. In fact, they have even been fined Nestle for such stuff.

Alas, Large companies of even the size of Nestle, continue to discriminate and have double standards in their marketing policies.

Sad there isnt any active regulation correcting such stuff in India, trying to curb such malpractices by giant organizations with ironically huge "Corporate Social Responsibility" Budgets!

Can we do something?

 

 
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