Transcript of Health Insurance Scenario in India- Issues and Concerns KGPL Ramadevi Deputy Director IRDA :...
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- Health Insurance Scenario in India- Issues and Concerns KGPL
Ramadevi Deputy Director IRDA : Hyderabad
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- STRUCTURE STRUCTURE I.Introduction II.Milestones: Laws &
Regulations III.A decade after opening up of Market IV.Issues and
Concerns I.External Constraints II.Internal Hazards V.Pathways to
the Future VI.Conclusion
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- INTRODUCTION Complex Insurable characteristics : Health
Insurance Property Loss exposure (Fire) Health Loss exposure Pure
RiskYes FortuitousYesDepends on the cause of loss/ to certain
extent Definite and measurableYesDepends on the cause of loss Large
number of similar exposure units Yes Independent and not
catastrophicYesYes. To certain extent Premiums are economically
feasibleyesUsually
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- Benefits Of Health Insurance Pay for SUDDEN losses Manage
CASHFLOW Uncertainty Efficient use of INSUREDS RESOURCES Better
PURCHASING Power Reduce social BURDEN Increase LIFE SPAN and
Improve QUALTIY OF LIFE
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- MILE STONES: Legal aspects of Health insurance Formation of
IRDA. Priority in Registration: giving special thrust to health
insurance under Sec. 2AA of the Insurance Act, 1938 that at the
time of registration to carry on life insurance or general
insurance business, it shall give preference on an application if
it agrees to provide health cover to individuals or groups of
individuals. 2000- Defined health insurance business or health
cover under Reg. 2(f) of IRDA (Registration of Insurance Companies)
Regulations 2000. Other relevant regulations: IRDA Third Party
Administrators- Health Services Regulations, 2001 IRDA Protection
of policyholders interests, 2002 IRDA Advertisements and
Disclosures Regulations, 2002 IRDA (Micro Insurance) Regulations
Constitution of various Groups/Sub-groups & their
recommendations
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- RECOMMENDATIONS OF SUB-COMMITTEES Sub-group on Health Insurance
Data 1. Collection of existing data 2. Collection of future data in
standardized formats 3. Training of personnel in ICD 10 coding
Sub-group on Product Innovation & definition of pre-existing
disease 1.Innovations in the product development 2.Distinction made
between pre-existing disease and condition and common definitions
recommended Sub-group on registration of stand-alone Health
Insurers 1.Reduction in the Capital 2.Besides health, it was
recommended that companies be allowed to write Personal Accident
and Travel Insurance Sub-group on Health Insurance products for
Rural sector 1.Inclusion of OPD and preventive care Various Working
Groups on Health Insurance with stakeholders and industry bodies
like CII, FICCI 1.Standardization of formats, definitions,
procedures.
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- A DECADE AFTER OPENING OF INSURANCE SECTOR Before YEAR 2000
Only 4 General insurers 1 Life insurer Only one mediclaim and a few
CI riders After YEAR 2000 16 more general insurance companies 3
stand alone health insurers TPAs as Service providers Cashless
facility across spectrum Innovative products Hospital cash Critical
illness Top UP Comprehensive covers both on indemnity and benefit
based
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- A DECADE AFTER OPENING OF INSURANCE SECTOR (Cont) File and Use
guidelines Group insurance and Advertisement guidelines
Standardizing PED definition Standardizing policy definition &
forms Circulars on renewability Circular on Senior citizens
Circular on Free look period Circular on Portability
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- DECADE OF BUSINESS GROWTH
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- CURRENT STATUS- 2011
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- CHANNEL-WISE PERFORMANCE 2011
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- HEALTH INSURANCE IN THE LIBERALISED MARKET Growth in Health
Insurance premium Product Development Customer Service Market
share
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- SOME ISSUES OF CONCERN Risk Pooling: Law of large numbers,
Critical mass shall be available for sharing of losses Health care
providers : No regulations Adverse selection vs risk selection IIB
reports on Cashless facility utilisation Moral hazard versus
induced demand Deductible & co-payment reduce to some extent
Morale hazard The claim amounts are the cumulative savings of the
policyholders and shall not be mis-utilised.
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- EXTERNAL CONSTRAINTS FACED IN SPREAD OF HEALTH INSURANCE
Adverse Selection Growing number of litigations Rising costs of
Claims Unregulated health care providers Fragmented Insurance
measures Changes in Government policy
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- Internal Hazards of Health Insurance Responsible role of
Intermediary Poor Underwriting norms Violation of the group
insurance norms Challenges for Servicing High Risk groups Lack of
spread, support & know-how for covering OPD &
general/chronic illness Uncontrollable costs Legal & Regulatory
changes raising expectations and costs of insurance Proper Products
design and delivery of services
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- DESIGN & STRUCTURE OF HEALTH INSURANCE PRODUCTS INFORMATION
SYMMETRY: PROSPECTUS VS PROPOSAL POLICY DOCUMENT (PROMISE)
DEFINITIONS (Meanings limiting/expanding cover) SCOPE OF COVER
(Circumstances of payment) CONDITIONS (Steps needed to enforce the
policy) EXCLUSIONS (Limitations) PRICING UNDERWRITING GUIDELINES
CLAIM DOCUMENTS CERTIFICATIONS UNDER FILE & USE
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- PORTABILITY What is Portability Option given to policyholder to
switch from one insurer to another with continuing credits. What is
the credit and How it helps? Standard Health insurance excludes
PEDs upto certain waiting periods. Under portability, the existing
credits of PEDs can be continued even when there is a switch over
from one insurer to another. Is it guaranteed renewal? The
policyholder must apply well in advance and the insurer must
respond within the stipulated time period Whether premium remains
the same? It may vary depending on the plan of the incumbent
insurer
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- THE PATHWAY TO FUTURE Winning the trust of policyholders
Controlling unethical practices Efficient & Quick service
Dynamic responsibility of regulator Role of Councils Rights &
responsibilities of policyholder Role of Government 7.
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- CONCLUSION Providing health insurance to more than billion
population is only possible if all stakeholders come together. Act
in a prudent and responsible manner so that there can be a gamut of
possible solutions for health care financing viz. Govt. sponsored
social insurance schemes for not so good risks Employee sponsored
schemes as social security Voluntary Group Schemes for communities
Individual insurance schemes on equitable principles By way of
innovative Schemes for long term managed care Maintaining the
financial health of insurers Protecting the interests of
policyholders Growth of the industry with healthy competition &
proper market conduct
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- Thank You