HEALTH INSURANCE.
HEALTH INSURANCE.
Everybody wants to lead a healthy life. However with the
changing lifestyle health problems have become very common. So one
needs to protect oneself from any such risk that may arise in life.
Moreover with the improvement in healthcare and the rising
inflation the cost of health care has also increased. So having a
health insurance policy has become essential.The termHealth
Insuranceis used to describe a form of insurance that pays for
medical expenses. It is used more broadly to include insurance that
covers disability or long-term nursing or custodial care needs. In
simple words, if you are covered under Health Insurance, you pay
some amount of premium every year to an insurance company and if
you have an accident or if you have to undergo an operation or a
surgery, the insurance company will pay for the medical expenses.It
takes just one visit to a hospital to make us realize how
vulnerable we are.It is a tough ordeal if you are diagnosed with an
illness and need to be hospitalized, no matter if you are rich or
poor, male or female, young or old. The list of lifestyle diseases
like heart problems, diabetes, stroke, renal failure, some cancers
just seems to get longer and more common these days. Thankfully
there are more specialty hospitals and specialist doctors but all
that comes at a cost. The super rich can afford such costs, but
what about an average middle class person? For an illness that
requires hospitalization / surgery, costs can easily run into 5
figures. A Health Insurance Policy can cover such expenses to a
large extent.
1.1 MEANING.
Health insurance is a system for the financing of medical
expenses by means of contributions or taxes paid into a common fund
to pay for all or part of health services specified in an insurance
policy or law. The key elements common to most health insurance
plans are advance payment of premiums or taxes, pooling of funds,
and eligibility for benefits on the basis of contributions or
employment.Health insurance insures you and your family against
sudden medical expenses. A Medical emergency can arise due to
sudden illness or injury with medical expenses rising, a health
insurance policy would help you sail through a bad patch. Your
medical expenses will be taken care of by the insurance company
provided you pay your premium regularly. The reduction or
elimination of the uncertain risk of loss for the individual or
household by combining a larger number of similarly exposed
individuals or households who are included in a common fund that
makes good the loss caused to any one member. Insurance reduces a
persons uncertainly concerning the timing and amount of possible
future expenses that may be incurred. It relies on the fact what is
unpredictable for an individual is highly predictable for a large
number of Individuals.Health insurance is obtainable to both
individual and groups (e.g. by a firm to cover its employees). In
each case the covered groups or individuals pay premiums or taxes
to protect themselves from high or unexpected healthcare expenses.
However premium for individual policy is costlier than that of the
group policy. An individual is the owner of his personal policy.
Whereas in group plans the sponsor is the owner of the policy and
the registered members are enclosed by the policy. You can take
benefit of group health insurance to overcome the shortage of your
individual insurance. People with no policy or are uninsurable due
to one or the other reason can take good advantage of the group
plans and be covered.By estimating the overall risk of healthcare
expenses a routine finance structure such as a monthly premium or
annual tax can be developed, ensuring that money is available to
pay for the healthcare benefits specified in the insurance
agreement. The benefit is administered by a central organization
such as a government agency, private business or not-for-profit
entity. The person or the insured should pay a regular fee called a
premium to the insurance company. In return the insurance company
will pay all or some medical expenses wanted when the insured
becomes injured, ill, or otherwise hospitalized.New India Assurance
Company Limited, stressing on the social security aspect of health
insurance, in their written note, stated; Basically the philosophy
behind the concept of Health Insurance is to provide protection
against uncertainty of illness /accident by spreading the risk
based on the principle that what is highly unpredictable for an
individual is predictable for a group of individuals. Thus,
insurance is a system by which Healthcare expenditure of few
unfortunate individuals, who suffer from illness/injury, is shared
by many fortunate ones who are insured and exposed to the same risk
but remain healthy. The case for health insurance rests on three
grounds: a) Illness can not be predicted; b) Financial burden of
hospitalization is high and cannot be planned; c) The proportion of
people requiring hospitalization due to illness or injury in any
large population is small thus enabling risk pooling. Pooling of
risks, resources, and benefits is the hall mark of any insurance
system.
DEFINITIONWorld health organization defines health as complete
physical, mental and social well being and not merely the absence
of disease and injury. As per WHO, a countrys Health Systems
comprise of all the organizations, institutions and resources that
are devoted to produce health actions.
According to ILO, The reduction or elimination of the uncertain
risk of loss for the individual or household by combining a larger
number of similarly exposed individuals or households who are
included in a common fund that makes good the loss caused to any
one member.
1.2 EVOLUTION OF HEALTH INSURANCE
The concept of health insurance was proposed in 1964 by Hugh the
Elder chamberlen form the Peter Chamberlen family. In the late 19th
century, early health insurance was actually disability insurance,
in the sense that it covered only the cost of emergency care for
injuries that could led to a disability. This payment model
continued until the start of the 20th century in some jurisdictions
(like California), where all laws regulating health insurance
actually referred to disability insurance. Patients were expected
to pay all other healthcare costs out of their own packets, under
what is known as the fee for-service business model. During the
middle to late 20th century, traditional disability insurance
evolved into modern health insurance. Over the last 50 years, India
has achieved a lot in terms of health insurance. Before
independence, the health structure was in dismal condition i.e.
high morbidity and high mortality and prevalence of infectious
diseases. Since independence, emphasis has been put on primary
health care and we made considerable progress in improving the
health status of the country. But still, India is way behind many
fast developing countries such as China, Vietnam and Sri Lanka in
health indicators. Health insurance, which remains highly
underdeveloped and less significant segment of the product
portfolios, is now emerging as a tool to manage financial needs of
people to seek health services. Healthcare in India is in a state
of enormous transition: increased income and health consciousness
among the majority of the classes, price liberalization, reduction
in bureaucracy, and the introduction of private healthcare
financing drive the change. The new economic policy and
liberalization process followed by Government of India since 1991
paved the way for privatization of insurance sector in the country.
The Insurance Regulatory and Development Authority (IRDA) bill,
passed in Indian parliament, is the important beginning of changes
having significant implications for the health sector. Health
Insurance is more complex than other segments of insurance business
because of serious conflicts arising out of adverse selection,
moral hazard, unavailability of data and information gap problems.
Proper understanding of Indian Health situation and application of
principles of insurance, keeping in view the social realities and
national objectives, are important.In India, Health Insurance is
not of recent origin. Concern for loss resulting from accident and
illness can be traced to ancient civilizations. In fact, one of the
earliest forms of health insurance may have been based on the
ancient custom of paying the doctor while in good health and
discontinuing payment during periods of illness. This custom
existed in South East Asian countries including India. The
development of health insurance in existing form in India is based
on pattern followed in Europe and America.Health Insurance or
medical insurance schemes had developed in India due to industrial
relations problems between the employer and the employees. The
Corporate Houses used to offer core and non-core benefits to the
employees. The insurance policies were granted to large Corporate
Houses purely on an accommodation basis. The cover usually offered
to the employees was in the nature of hospitalization and
domiciliary treatment for dental and non-surgical eye treatment.
The benefits used to be for very small amount. There was no scheme
for individuals and families. In 1981, the Apex Body of Public
Sector Insurance Companies i.e. GIC designed a limited cover for
individuals and families for covering their hospitalization needs.
This was replaced by a mediclaim policy in the year 1986 under a
market agreement to provide insurance benefits to individuals and
groups under a group mediclaim policy. The scheme so introduced was
modified in 1991 and 1996 in the light of experience and
suggestions received from the insuring public and medical
fraternity. The benefit provided under the policy was on
reimbursement basis on occurrence of a major calamity in the form
of accident/sickness to an insured person. The first Mediclaim
Insurance Scheme was introduced by GIC in 1986 for people not
covered under the above scheme. Prior to 1986, cover against
sickness and diseases were provided by extension of Personal
Accident Policy.
1.3 TOP HEALTH INSURANCE COMPANIES IN INDIA.
STAR HEALTH & ALLIED INSURANCE COMPANY LIMITED.Star Health
and Allied health Insurance Company Limited (Star Health) is a
joint venture between Oman healthInsurance Company, ETA Ascon Group
and a number of insurance veterans in the country. It is also the
first dedicated health insurance company in India. Known for its
innovation, Star has some very unique products like Diabetes Safe
which is for diabetic patients and Star Net plus which is designed
for HIV+ patients.Popular Products: Star Family Health Optima,
Senior Citizen Red Carpet MAX BUPA HEALTH INSURANCE.Max Bupa Health
Insurance is a joint venture between Max India Limited and Bupa
Group, one of the international healthcare providers. Formed in
2010, Max Bupa has brought changes in the health insurance market
in India with innovative and customer friendly products. Popular
products:Heart Beat Gold, Silver and Platinum.
APOLLO MUNICH.Apollo Munich Health Insurance Co. Ltd. is the new
name for Apollo DKV Insurance Co. Ltd. which is a partnership
between The Apollo Hospitals Group, and Germany based Munich Res
newest business segment, Munich Health. They also bring a change in
terms of customer friendly features like lifetime renewal and
portability benefits for existing policies which means you can buy
Apollos policy and get the continuation benefits of your existing
policy. Apollo Munich also covers maternity after a waiting
period.Popular Products: Easy Health Gold, Standard, Exclusive and
Premium. RELIANCE HEALTH INSURANCE.Reliance health insurance is one
of the private general insurance companies in India. They also have
a few good health insurance products, in their Health wise policy
range; critical illnesses are covered as a part of the policy.
There is also a choice of reducing waiting period for pre-existing
illnesses to 2 years from the industry standard of 4 years. It
covers those between the ages of 5-75.Popular Policy: Health wise
Family Floater ICICI LOMBARD.ICICI Lombard GIC Ltd. is the largest
private sector general insurance company in India. It has some good
health insurance plans - like Health Advantage which covers not
only hospitalization expenses but also outpatient expenses like
dental, upto a limit. Maternity cover is also available under this
product. The company has also added Health insurance Guide, an
interactive tool to help the customer select a plan to suit his
requirements.Popular Product:Health Advantage.
BAJAJ ALLIANZ GENERAL INSURANCE.Bajaj Allianz General Insurance
Company Limited is a joint venture between Bajaj Finserv Limited
and Allianz SE. Health insurance policies offered by them include
Health Guard (Mediclaim), Silver health (Senior Citizen) and Star
package (Family Floater), there are also other plans like Hospital
Cash which gives an amount on every day of hospitalization and
Critical Illness which gives a lump sum in the event that the
insured contracts one of the critical illnesses listed like cancer
during the policy period. Bajaj was the first company to come up
with a captive TPA with ensuing efficiencies.Popular Product:
Health Guard.
HEALTH INSURANCE FROM PUBLIC SECTOR GENERAL INSURANCE COMPANIES
ORIENTAL INSURANCEOriental insurance offers a number of health
insurance products including Individual mediclaim, Universal health
insurance scheme and family floaters to the customers.Their Happy
Family floater is a popular product because it doesnt require
medical check-up till the age of 60 (it is mandatory for everyone
over the age of 45 to take a health check-up in other
policies).Popular policy: Happy Family Floater UNITED INDIA
INSURANCE.Another of the public sector units, United India health
Insurance Company Limited also offers a wide range of health
insurance products like Family Medicare- Gold, Platinum, Senior
Citizen, Top-up and Super Top-up.Popular Policy:Family
Medicare.
NEW INDIA ASSURANCEIt is one of the first Indian owned companies
when it was formed in 1919. It offers different health insurance
products like Mediclaim policy, senior citizen policy andUniversal
health insurance policy.Popular Products:Mediclaim policy NATIONAL
INSURANCENationals Varishta Mediclaim is a popular product, it
covers everyone from the age from 6-80 with special features for
senior citizens.Popular product: Varishta Mediclaim.
1.4 NEED OF HEALTH INSURANCE.'Look to your health; and if you
have it, praise God, and value it next to a good conscience; for
health is the second blessing that we mortals are capable of; a
blessing that money cannot buy.'- IZAAK WALTON
Health insurance has become a necessity today because it plays a
major role in health care. This is because one never knows when
illnesses may strike. And in such cases hospitalization and
medication expenses can be unaffordable. Health insurance can prove
to be a source of support by taking care of the financial burden of
your family may have to go through. Advancement in science and
technology has brought about a revolutionary change in mans life.
It has reduced mortality rates and increased his life span but at
the same time has given rise to a number of other ills. Increasing
pollution levels especially in metros, stress and strain at
workplace, cut throat competition taking its toll are some of the
harsh realities. Health treatment nowadays is very costly. More
than the disease it is the cost of treatment that takes its toll.
To get rid of health worries health / medical insurance is the
answer. But over 70 per cent of these spends are out of pocket
which leads to lot of hardships. According to a survey by NSSO
(National Sample Survey Organization), 40 per cent of the people
hospitalized have either had to borrow money or sell assets to
cover their medical expenses. It is especially worse when the
patient needs specialized care. Expenses are exorbitant and the
situation leaves you mentally devastated also burning a deep hole
in your pocket. The family balance is affected, all those comforts
of life have to be given up and your family has to make up with
bare minimum necessities only. A significant proportion of
population may have had to forego treatment all together. Hence it
is imperative that the health insurance coverage is increased.
Increasing incidence of lifestyle diseases such as obesity,
diabetes mellitus, hyperlipidemia, hypertension and cardiovascular
diseases to name a few, and rising medical costs, further emphasize
the need for health insurance. Health insurance policy not only
covers expenses incurred during hospitalization but also during the
pre as well as post hospitalization stages like money spent for
conducting medical tests and buying medicines. The cover will be to
the extent of the sum insured.Health insurance takes care of you in
such circumstances. It will help you tackle such situations with
ease by providing you with timely and adequate medical care. The
financial burden of footing huge medical bills is taken care of by
health insurance. Besides if the accident causes life long
disability to the patient, the earning member of the family, the
insurance company will come to the rescue
Top Reasons why Getting a Health Insurance is ImportantTime is
very important to us in every possible way. It is the only thing we
have; it determines the value of everything. Anything can happen to
anybody at any given time. Since there are no surety as to when and
where something might happen, there is one thing that you can do to
make sure that even at bad times, ensure that you are not left
helpless at the time of taking care of your and your familys
treatment. Here comes the role of the insurance. Health Insurance
is there to take care of the needs of Hospitalization Here is the
10 benefits of getting a health insurance, determining its
importance:1. Preferred provider networkHospitalization does
necessarily means some tie up of the hospitals with the insurance
companies. An agreement is reached by the insurance companies with
the hospitals that they will undertake a particular treatment at an
agreed price. An open heart surgery or orthopedic surgery to take
care of fractures can be undertaken at a pre- determined rate. What
it does is lots of paper work is reduced, and the insured has
lesser tension. Hence Health insurance gives the requisite freedom
from unnecessary worries.
2. Insurance agents do the leg workInsurance companies appoint
agents to do their work of selling health insurance covers. Their
job does not end here. They also need to provide after sales
service. The services of the agents do come handy in times of need.
They are required to guide their clients through difficult period.
They take care of admission of the patients to a suitable service
provider, get the cashless facility approved and at times they go
beyond their limits to help them. They are at times known to give
mental support to the near and dear ones of the patient.
3. Cashless facilityBiggest constraint that affects timely
treatment is the non-availability of funds. For all sorts of
medical treatment cash payments need to be made immediately on
treatment. However, if one does not have the fund there will be no
treatment? To overcome such a situation the insurance companies
have come up with a noble way of doing things. The insured will not
need to shell lots of cash from his pocket to meet such situation.
The insurers will, directly or indirectly, pay off the legitimate
dues to the hospital authorities. Such a benefit is known as a
cashless facility. Each hospital has help desk wherein the patients
family members provide the necessary papers to avail of the
benefit. These help desks with the consent of the concerned doctor
pass on the request to the insurance company for approval.4.
Avoidance of delay in medical treatmentThough medical science has
developed rapidly over the years but this does not necessarily mean
that they are available to common people at an economical price. In
most of the cases it is very costly. Such costs, as usual, do
discourage commoners to take timely action. However, when health
insurance is affordable it does definitely help in taking timely
actions and thus the avoidance of suffering.5. Regular check
upsInsurance companies are quiet aware that if the general health
condition of the population that they cater are not good then the
claim amounts will be woefully big. Such situation can ruin their
financial base and may make them loss making organisation. To take
care of such a situation each of the insurance companies provides
the benefit of a regular health check up at a regular interval,
subject to a certain cap. Health check up at a regular interval
helps in reducing the incidence of ill health. Thus such incentive
encourages the insured and his family members to have a healthy
life.6. Peace of mindNow- a-days men are subjected to lots of
tension. The fear of something wrong happening to him and to his
near and dear ones, subjects him to even more pressure. One of the
biggest worry is the health problem. Low premium for Health
insurance provides some relief to the otherwise tensed life of
individuals.Insured, which has taken cover, knows that he is
insured against the treatment of illness. Though insurance cover
may at times not cover the whole amount of the bill but it does
certainly covers a major part of the cost and therefore the burden
is not so unbearable. This assurance gives the insured the peace of
mind that the insured so deserves.
7. Health care for the employeesIndustries, the world over,
employ a huge number of employees. Who are these people? They are
the people who are exposed to many sorts of adverse situations as
far as health is concerned. Some may fall ill while working for an
industry. Labour laws ensure that the employees are provided with
proper treatment. Accidents may happen and is it right that
employers should leave their employees to take care of their
illnesses? No, it is not right. Laws have been promulgated
likeWorkmensCompensation, etc. Health insurance is a social
security measure. Most of the employers do take cover for the
family members of their workmen, to keep them motivated.8. Access
to health care at an affordable rateHealth is of primary concern to
all concerned. It is the duty of all to ensure that Health care is
made accessible to near and dear ones.To make this possible general
insurance companies have come out with variations of health
insurance. The premiums are reasonably priced so that common people
can afford it.The concept of health insurance is nothing but one of
sharing. Premiums are calculated based on the probability of a
certain situation arising in a population and the likely payout
needed by the insurance companies.
To be able to estimate the reliability of a report, the methods
which it is based upon have to be considered. Hence, this
chapter,methodology, will give the reader aninsight into my
research process, selection and data collection.
2.1 OBJECTIVE OF THE STUDY.
The main objective of research is to identify the awareness
consumption patterns of the people. About what they think about
Health Insurance and are they aware or not about its benefits. The
objective of present study can be accomplished by conducting a
systematic research.The following are the objectives of the study:
To understand the position of health insurance in India. To
understand the different schemes of health insurance by different
companies. To find out the future of Insurance sector in India. To
study the need of health insurance. To check the awareness among
people regarding health Insurance. To study about benefits provided
by various insurance plan. To find out conclusion and give
Suggestions.
2.2 SCOPE OF STUDY.
Is mostly to identify weather the customers are aware of
insurance or not and how much they are willing to pay for
theirfamilies. and what are the different perceptions having
towardsinsurance policies.
SIGNIFICANCE OF THE STUDY.This dissertation presents review of
health insurance situation in India - the opportunities it
provides, the challenges it faces and the concerns it raises. A
discussion of the health insurance for senior citizens and for low
income people is also done.The paper covers following areas: Health
insurance scenario in India Health insurance for the low income
people. Types of Health Insurance schemes in India. Major companies
providing Health insurance. Need of Health Insurance. Role of
Regulators in Health Insurance. Health Insurance products available
in India.
2.3 DATA COLLECTION.
Market research requires two kinds of data that is primary data
and secondary data.
Primary Sources:Primary data is collected using a well
structured questionnaire, surveys etc. Survey is carried out in 2
steps1) Firstvisit2) Appointment or personal interview
SECONDARY SOURCES:Secondary Data is data collected by someone
other than the user.Common sources of secondary data includes
organizational records and qualitative methodologies or qualitative
research.The data for study has been collected through various
sources: Books Newspapers Internet sources
2.4 LIMITATION OF THE STUDY. Due to time constraint, a detailed
study could not be done. The projection is purely based on verbal
meetings and may be influenced by unprecedented factors. The
analysis and conclusion made by me as per my limited understanding
and there may be something variation in the actual situation.
3.1HEALTH INSURANCE IN INDIA: CURRENT SCENARIO.
Health care has always been a problem area for India, a nation
with a large population and larger percentage of this population
living in urban slums and in rural area, below the poverty line.
The government and people have started exploring various health
financing options to manage problem arising out of increasing cost
of care and changing epidemiological pattern of diseases. The
control of government expenditure to manage fiscal deficits in
early 1990s has let to severe resource constraints in the health
sector. Under this situation, one of the ways for the government to
reduce under funding and augment the resources in the health sector
was to encourage the development of health insurance. In the light
of escalating health care costs, coupled with demand for health
care services, lack of easy access of people from low income group
to quality health care, health insurance is emerging as an
alternative mechanism for financing health care. Indian health
financing scene raises number of challenges, which are: Increase in
health care costs High financial burden on poor eroding their
incomes Need for long term and nursing care for senior citizens
because of increasing nuclear family system. Increasing burden of
new diseases and health risks Due to under funding of government
health care, preventive and primary care and public health
functions have been neglected
In the above scenario, exploring health financing options became
critical. Naturally, health insurance has emerged as one of the
financing options to overcome some of the problems of our system.
In simple terms, health insurance can be defined as a contract
where an individual or group purchases in advance health coverage
by paying a fee called premium. Health insurance refers to a wide
variety of policies. These range from policies that cover the cost
of doctors and hospitals to those that meet a specific need, such
as paying for long term care. Even disability insurance, which
replaces lost income if you cannot work because of illness or
accident, is considered health insurance, even though it is not
specifically for medical expenses. Health insurance is very well
established in many countries, but Health Insurance in India still
remains an untapped market.In a country where less than 15 per cent
of population has some form of health insurance coverage, the
potential for the health insurance segment remains high. It seems
that there is an urgent need to ramp up the health insurance
coverage in the country as out-of-pocket payments are still among
the highest in the world. Reasoning out the low health insurance
coverage in India, Antony Jacob, CEO, Apollo Munich Health
Insurance, said, Only about 12-13 per cent of population has some
form of health insurance coverage, including those who are covered
through some form of government schemes. People are yet to accept
health insurance as a financial tool for medical emergencies. They
usually procrastinate when it comes to buying health insurance
unless they are faced by a challenging situation. Although the
Indian health insurance market still lags behind other countries in
terms of penetration yet the health insurance segment is rising. It
continues to be one of the most rapidly growing sectors in the
Indian insurance industry with gross written premiums for health
insurance increased by 16 per cent from Rs 13,212 crore in 2011-12
to Rs 15,341 crore in 2012-13. The health insurance premium has
registered a compounded annual growth rate (CAGR) of 32 per cent
for the past eight financial years. Health insurance segment still
remains an unexplored territory in India. Jacob at Apollo Munich
Health Insurance asserted, Health insurance has become one of the
most prominent segments in the insurance space today and is
expected to grow significantly in the next few years. As spending
on healthcare in India is expected to double in a couple of years,
we believe that health insurance will eventually become the biggest
contributor in the non-life segment. Furthermore, in the present
scenario, the health insurance industry is dominated by four public
sector entities (National, New India, Oriental, and United India)
that together have 60 per cent market share. The rest of the share
is with 17 private sector players, of which four are standalone
health insurance players (Star Health, Apollo Munich, Max Bupa, and
Religare Health). ICICI Lombard continued to be the largest private
sector non-life insurance company, with market share of 9.74 per
cent.
3.2 TYPES OF HEALTH INSURANCEHealth Insurance TypesHealth
insurance can be broken down into two broad categories:Traditional
and Managed care. Within those categories, there are four basic
types of plans: Traditional indemnity plans, which are now often
called fee-for-service plans; Health Maintenance Organizations
(HMOs) Preferred Provider Organizations (PPOs) Point-Of-Service
plans (POS);No one type of health care plan is better than the
other. It really depends on your needs and preferences. Some people
enjoy the autonomy offered by fee-for-service plans, while others
prefer the low costs associated with closed-panel HMOsTraditional
Health InsuranceUp until about 30 years ago, most people had
traditional indemnity coverage. These days, it's often known as
"fee-for-service." Indemnity plans are a bit like auto insurance:
you pay a certain amount of your medical expenses up front in the
form of a deductible and afterward the insurance company pays the
majority of the bill.Advances in modern medicine increased the cost
of providing health care and made it possible for people to live
longer. Those advances caused many insurance companies to look for
ways to reduce their costs of doing business, giving managed care
the boost it enjoys today.Fee-for-serviceIndemnity plans or
fee-for-service allow you to direct your own health care and visit
almost any doctor or hospital you like. The insurance company then
pays a set portion of your total charges. Indemnity plans are also
referred to as "fee-for-service" plans.How does an fee-for-service
plan work?Under a fee-for-service plan, you may see whatever
doctors or specialists you like, with no referrals required. Though
you may choose to get the majority of your basic care from a single
doctor, your insurance company will not require you to choose a
primary care physician. It may also require that you pay up front
for services and then submit a claim to the insurance company for
reimbursement.You'll likely be required to pay an annual deductible
before the insurance company begins to pay on your claims. Once
your deductible has been met, the insurance company will typically
pay your claims at a set percentage of the "usual, customary and
reasonable (UCR) rate" for the service. The UCR rate is the amount
that healthcare providers in your area typically charge for any
given service.In a nutshell, fee-for-service coverage offers
flexibility in exchange for higher out-of-pocket expenses, more
paperwork and higher premiums.A fee-for-service plan may be right
for you if: You're looking for the greatest level of freedom
possible in choosing which doctors or hospitals to visit. You don't
want to designate primary care physicians or get referrals to get
specialists. You want to freely visit any physician you
chooseManaged care.Managed care has been around in one form or
another since the 1930s, but it really took off in the last 10
years. As it grew, it evolved, leaving us with three basic types of
managed care plans. Today, the majority of people with private
health insurance have some type of managed care.Although there are
important differences among the different types of managed care
plans, there are some similarities. All managed care plans involve
an arrangement between the insurer and a selected network of health
care providers, and they offer policyholders significant financial
incentives to use the providers in that network. There are usually
explicit standards for selecting providers and a formal procedure
to assure quality care.Health Maintenance Organizations (HMOs)HMO
means "Health Maintenance Organization." HMO plans offer a wide
range of healthcare services through a network of providers who
agree to supply services to members. With an HMO you'll likely have
coverage for a broader range of preventive healthcare services than
you would through another type of plan.How does an HMO plan work?As
a member of an HMO, you'll be required to choose a primary care
physician (PCP). Your PCP will take care of most of your healthcare
needs. Before you can see a specialist, you'll need to obtain a
referral from your PCP. Though there are many variations, HMO plans
typically enable members to have lower out-of-pocket healthcare
expenses. You may not be required to pay a deductible before
coverage starts and your co-payments will likely be minimal. You
also typically won't have to submit any of your own claims to the
insurance company. However, keep in mind that you'll likely have no
coverage for services rendered by out-of-network providers or for
services rendered without a proper referral from your PCP. An HMO
plan may be right for you if: You're shopping for a plan with lower
premiums You want a plan without a deductible and don't mind having
an out-of-pocket limit You need preventive care services such as
coverage for checkups and immunizations
Preferred Provider Organizations (PPOs)PPO plans, or "Preferred
Provider Organization" plans, are one of the most popular types of
plans in the Individual and Family market. PPO plans allow you to
visit whatever in-network physician or healthcare provider you wish
without first requiring a referral from a primary care
physician.How does a PPO plan work?As a member of a PPO plan,
you'll be encouraged to use the insurance company's network of
preferred doctors and you usually won't need to choose a primary
care physician. No matter which healthcare provider you choose,
in-network healthcare services will be covered at a higher benefit
level than out-of-network services. It's important to check if you
provider accepts your health plan so you receive the highest level
of benefit coverage. You will probably have an annual deductible to
pay before the insurance company starts covering your medical
bills. You may also have a co-payment of about $10 - $30 for
certain services or be required to cover a certain percentage of
the total charges for your medical bills.A PPO plan may be right
for you if: You want the freedom to choose almost any medical
facility or provider for your healthcare needs You want a portion
of out-of-network claims to be covered by your insurance company
You don't want to get referrals before visiting a specialist.
Point-of-Service (POS)A Point of Service (POS) plan has some of
the qualities of HMO and PPO plans with benefit levels varying
depending on whether you receive your care in or out of the health
insurance company's network of providers.How does a POS plan
work?POS plans combine elements of both HMO and PPO plans. Like an
HMO plan, you may be required to designate a primary care physician
who will then make referrals to network specialists when needed.
Depending upon the plan, services rendered by your PCP are
typically not subject to a deductible and preventive care benefits
are usually included. Like a PPO plan, you may receive care from
non-network providers but with greater out-of-pocket costs. You may
also be responsible for co-payments, coinsurance and an annual
deductible.A POS plan may be right for you if: You're willing to
play by the rules and possibly coordinate your care through a
primary care physician Your favorite doctor already participates in
the network.
3.3 VARIOUS HEALTH INSURANCE PRODUCTS AVAILABLE IN INDIA .
The existing health insurance schemes available in India can be
broadly categorized as: 1. Voluntary health insurance schemes or
private-for-profit schemes 2. Mandatory health insurance schemes or
government run schemes (namely ESIS, CGHS) 3. Insurance offered by
NGOs/Community based health insurance 4. Employer based schemes
1. Voluntary health insurance schemes or private-for-profit
schemes: In private insurance, buyers are willing to pay premium to
an insurance company that pools similar risks and insures them for
health related expenses. The main distinction is that the premiums
are set at a level, which are based on assessment of risk status of
the consumer (or of the group of employees) and the level of
benefits provided, rather than as a proportion of consumers income.
The most popular health insurance cover offered by GIC is Mediclaim
policy
Mediclaim policy: - It was introduced in 1986. It reimburses the
hospitalization expenses owing to illness or injury suffered by the
insured, whether the hospitalization is domiciliary or otherwise.
It does not cover outpatient treatments. Government has exempted
the premium paid by individuals from their taxable income. Because
of high premiums it has remained limited to middle class, urban tax
payer segment of population. Some of the various other voluntary
health insurance schemes available in the market are :- Asha deep
plan II , Jeevan Asha plan II, Jan Arogya policy, Raja Rajeswari
policy, Overseas Mediclaim policy, Cancer Insurance policy,
Bhavishya Arogya policy, Dreaded disease policy, Health Guard,
Critical illness policy, Group Health insurance policy, Shakti
Shield etc. At present Health insurance is provided mainly in the
form of riders. There are very few pure health insurance policies
under voluntary health insurance schemes.
2. Mandatory health insurance schemes or government run schemes
(namely ESIS, CGHS) Employer State Insurance Scheme (ESIS):-
Enacted in 1948, the employers state insurance (ESI) Act was the
first major legislation on social security in India. The scheme
applies to power using factories employing 10 persons or more and
non-power & other specified establishments employing 20 persons
or more. It covers employees and the dependents against loss of
wages due to sickness, maternity, disability and death due to
employment injury. It also covers funeral expenses and
rehabilitation allowance. Medical care comprises outpatient care,
hospitalization, medicines and specialist care. These services are
provided through network of ESIS facilities, public care centers,
non-governmental organizations (NGOs) and empanelled private
practitioners. The ESIS is financed by three way contributions from
employers, employees and the state government.
Even though the scheme is formulated well there are problem
areas in managing this scheme. Some of the problems are :-
Remuneration compared to corporate hospitals. Rising costs and
technological advancement in super specialty treatment. Management
information is not satisfactory. The patients are not satisfied
with the services they get Low utilization of the hospitals In
rural areas, the access to services is also a problem.All these
problems indicate an urgent need for reforms in the ESIS
Scheme.
Central Government Health Insurance Scheme (CGHS):- Established
in 1954, the CGHS covers employees and retirees of the central
government and certain autonomous and semi autonomous and
semi-government organizations. It also covers Members of
Parliament, Governors, accredited journalists and members of
general public in some specified areas. Benefits under the scheme
include medical care, home visits/care, free medicines and
diagnostic services. These services are provided through public
facilities with some specialized treatment (with reimbursement
ceilings) being permissible at private facilities. Most of the
expenditure is met by the central government as only 12% is the
share of contribution.
Universal Health Insurance Scheme (UHIS):- For providing
financial risk protection to the poor, the government announced
UHIS in 2003. Under this scheme, for a premium of Rs. 165 per year
per person, Rs.248 for a family of five and Rs.330 for a family of
seven , health care for sum assured of Rs. 30000/- was provided.
This scheme has been made eligible for below poverty line families
only. To make the scheme more saleable, the insurance companies
provided for a floater clause that made any member of family
eligible as against mediclaim policy which is for an individual
member. In spite of all these, the scheme was not successful.
The reasons for failing to attract rural poor are many :- The
public sector companies who where required to implement this scheme
find it to be potentially loss making and do not invest in
propagating it. To meet the target, it is learnt that several field
officers pay the premium under fictious names. Identification of
eligible families is a difficult task Poor find it difficult to pay
the entire premium at one time for future benefit, foregoing
current consumption needs. Paper work required to settle the claims
is cumbersome In 2004, the government also provided an insurance
product to the Self Help Group (SHG) for a premium of Rs.120 and
sum assured of Rs.10000/-. However, the intake is negligible. The
reasons for poor intake are similar to those cited above.
3. Insurance offered by NGOs/Community based health insurance.
Community based schemes are typically targeted at poorer population
living in communities. Such schemes are generally run by charitable
trusts or non-governmental organizations (NGOs). In these schemes
the members prepay a set amount each year for specified services.
The benefits offered are mainly in terms of preventive care, though
ambulatory and inpatient care is also covered. Such schemes tend to
be financed through patient collection, government grants and
donations. Increasingly in India, CBHI schemes are negotiating with
for profit insurers for the purchase of custom designed group
insurance policies. Some of the popular Community Based Health
Insurance schemes are: - Self-Employed Womens Association (SEWA),
Tribuvandas Foundation (TF), The Mullur Milk Co-operative,
Sewagram, Action for Community Organization, Rehabilitation and
Development (ACCORD), Voluntary Health Services (VHS) etc.
4. Employer based schemes.Employers in both public and private
sector offers employer based insurance schemes through their own
employer. These facilities are by way of lump sum payments,
reimbursement of employees health expenditure for out patient care
and hospitalization, fixed medical allowance or covering them under
the group health insurance schemes.
3.4 BENEFITS OF HEALTH INSURANCE.
There are quite a number of benefits of having a health
insurance plan as compared to the regular insurance schemes. In
fact, a health insurance will provide you with a great financial
coverage. Every year, the health care cost increases and thus you
ought to have health insurance or make certain that you are always
in good health which might be difficult to achieve under certain
living conditions.Health insurance is very important for both the
individuals as well as families. This is because if reduces the
financial burden that might arise in case of an unexpected medical
emergency.Further down are a few benefits of health insurance.
PreventionOne of the most significant advantages of having health
insurance is the ability to prevent diseases through early
detection and doctor recommended lifestyle changes. This prevention
not only keeps citizens healthier, but it also saves money on the
expense of the health care that would otherwise be required to deal
with the problem when it arises.
Peace of MindHaving health insurance leads to peace of mind for
those who have it. If a nagging problem (such as an unusual pain),
persists in someone with health insurance they can go to the doctor
without significant out-of-pocket expense and get it checked out
even if it leads to diagnostic testing.
Less Lost TimePeople with health insurance who get sick can take
a sick day from work, visit the doctor, get treated and possibly be
back to work in a day or two if the illness is minor. It is an
advantage to the employee and employer for this quick and easy
access to medical attention, since it reduces their lost time on
the job.
The chance of hospitalizationIf the doctors discover that you
require to be hospitalized, the health insurance also covers these
costs as well as the costs of treatment throughout your stay in
that particular hospital.
Protect your family's financial futureHealth coverage costs
money but not having it could cost a lot more. Unforeseen medical
needs, combined with high health care costs, could leave you with
large medical bills if you're not insured. Having health insurance
coverage helps reduce the chance that you'll have to dip into
savings to pay for unexpected medical costs. It's hard to know how
much you'll spend on health care each year. But having a health
plan gives you financial protection for sudden, expensive medical
costs.
Scheduled Regular Check-UpsRegular health check-ups without
health coverage will eat most of the individuals budget if it also
includes any special services or hospitalization. Health coverage
on the other hand makes it pretty easy with insurance company
providing for all these charges rather than emptying the
individuals pockets for general health issues.
Pre-hospitalization and Post-hospitalization expensesInsurance
policies also cover pre-hospitalization and post-hospitalization
expenses like doctor's consultation fees, expenses incurred on
tests etc. However, the health insurance companies cover these
expenses generally up to a certain period of time before or after
hospitalization.
Tax BenefitThe premium paid towards health insurance is also
eligible for tax benefit under section 80 D of the Income Tax Act.
Factors affecting the premium cost- The premium paid towards the
insurance policy depends on various factors like age and prior
medical history. The older the individual the higher will be the
premium. Moreover past claim history also affects the premium
rates.
Increases Savings:If there is any chance that the employer
provides health coverage it is sure that the individuals will not
have to spend much of their savings further all the saved money can
be used for any other emergencies. Also the coverage provided by
employer will see that it will be included in entire income however
if this coverage plan has been purchased individually it would
lessen the taxes by increasing the savings from taxes.
3.5 THIRD PARTY ADMINISTRATORS.
The Third Party Administrators are intermediaries who connect
insurance companies, policyholders and health care providers.
TPAs are intermediaries in health insurance sector. They
facilitate access of the policy holders through a network of
hospitals. They maintain the database of the policy holders and
issue them the identity cards with unique identification number.
TPAs handle all the post policy issue procedures including claim
settlement.TPAs have fulltime medical practitioners under their
employment who take decisions on whether a particular ailment is
covered under the policy or not.TPAs are beneficial for both i.e.,
for the insurer and the insured. The insurer substantially reduces
the administrative cost and the insured gets professional
services.TPA license is granted to companies registered under
companies act 1956. They have to fulfill certain conditions laid
down by IRDA. Such license is usually granted for a period of 3
years. TPAs are entitled to receive commission from insurers on
mutually agreeable terms. However as per the IRDA guidelines, such
commission cannot exceed 15% of the premium amount.TPAs have to tie
up with different hospitals who offer hospitalization services. A
single TPA may tie up with multiple insurers and likewise a single
insurer can empanel multiple TPAs.With the advent of TPA, the
insurance companies aim at ensuring higher efficiency,
standardization of charges, greater awareness and penetration of
health insurance to a larger section of the people.
Services offered by the TPAThe TPA undoubtedly aims to give the
health insurance industry the required boost in India. ID card: TPA
provides ID cards to all their policyholders in order to validate
their identity at the time of admission. 24 hours customer support
services: The TPA provide assistance through their 24 hrs call
center that provides information regarding policyholder's data,
provider network, claim status, benefits available with existing
cardholder, etc All these details are furnished on request.
Cashless Hospitalization: Each policyholder is provided with a list
of empanelled hospitals where in he/she can avail cashless
hospitalization. Claim Management: On behalf of the insurance
companies TPA administers and settles claims for hospitals and
policyholders.
List of Third Party Administrators in India. Parekh Health
Management Pvt. Ltd. Medi Assist India Pvt. Ltd. MD India
Healthcare Services Pvt. Ltd. Paramount Health Services Pvt. Ltd.
E-Meditek services Ltd Heritage Health Services Pvt. Ltd. Universal
Medi-Aid Services Ltd. Focus Healthcare Pvt. Ltd. Medicare TPA
Services Pvt. Ltd. Family Health Plan Ltd. Raksha TPA Pvt. Ltd. TTK
Healthcare Services Private Limited Anyuta TPA in Healthcare East
West Assist Pvt. Ltd.3.6 ROLE OF REGULATORS .
The government has established Insurance Regulatory and
Development Authority (IRDA) which is the statutory body for
regulation of the whole insurance industry. They would be granting
licenses to private companies and will regulate the insurance
business. As the health insurance is in its very early phase, the
role of IRDA will be very crucial. They have to ensure that the
sector develops rapidly and the benefit of the insurance goes to
the consumers. But it has to guard against the ill effects of
private insurance. The main danger in the health insurance business
we see is that the private companies will cover the risk of middle
class who can afford to pay high premiums. Unregulated
reimbursement of medical costs by the insurance companies will push
up the prices of private care. So large section of India's
population who are not insured will be at a relative disadvantage
as they will, in future, have to pay much more for the private
care. Thus checking increase in the costs of medical care will be
very important role of the IRDA. Secondly, IRDA will need to evolve
mechanisms by which it puts some kind of statue in place that
private insurance companies do not skim the market by focusing on
rich and upper- class clients and in the process neglect a major
section of India's population. They must ensure that companies
develop products for such poorer segments of the community and
possibly build an element of cross-subsidy for them. Government
companies can take the lead in this matter and catalyze new
products for the poor and lower middle class as they have done in
the past. Thirdly the regulators should also encourage NGOs,
Co-operatives and other collectives to inter into the health
insurance business and develop products for the poor as well as for
the middle class employed in the services sector such as education,
transportation, retailing etc and the self employed. This could be
run as no-profit-no loss basis similar to the scheme pioneered by
Indian Medical Association for its members. Special licenses will
have to be given to NGO for this purpose without insisting on the
minimum capital norms, which are for commercial insurance
companies.As Health Insurance is in its very early phase, the role
of IRDA will be very crucial. It has to ensure that this sector
develops rapidly and benefit of insurance goes to the consumers. It
has to guard against the ill effects of privatization. Unless
privatization and development of health insurance is managed well
it may have negative impact of health care, especially to a large
segment of rural population in the country. If it is well managed
then it can improve access to care and health status in the country
rapidly. Experience from other countries suggest that the entry of
private firms into the health insurance sectors, if not properly
regulated , does have adverse consequences for the cost of care,
equity, consumer satisfaction, fraud and ethical standards. Some of
the areas of concern which the regulator has to look into are:
Many times the insurance claims are rejected due to small
technical reasons. This leads to disputes. Various conditions
included in the insurance policy contract is not negotiable and
these are binding on consumer. There no analysis on what is fair
practice and what is unfair practice.IRDA has stipulated
regulations for both life and non-life insurance companies in many
aspects of business but the same is lacking in respect of health
insurance business. IRDA will have to evolve mechanism so that the
private insurance companies do not skim the market by focusing on
rich and upper class clients and in the process neglect a major
section of Indias population. IRDA should ensure and encourage
different organizations and private insurers to develop products
for the poorer segment of the community and if possible build an
element of cross subsidy for them.The IRDA will have a significant
role in regulating the health insurance sector and safe guarding
the interests of the policy holders by minimizing the unintended
consequences.
3.7 HEALTH INSURANCE FOR SENIOR CITIZENS.According to the new
guidelines by IRDA, every health insurance provider has to offer
coverage to individuals upto 65 years of age.These senior citizen
health insurance policies are for people aged between 65 years and
80 years. The points of senior citizen health insurance comparison
can be max age at renewability, coverage of specific diseases and
waiting periods.For example Varistha Medicalim policy covers
Hospitalization and Domiciliary Hospitalization Expenses as well as
expenses for treatment of Critical Illness, if opted for. The
Critical Illnesses covered are Coronary Artery Surgery, Cancer,
Renal Failure and Stroke. The senior citizen mediclaim policy can
be renewed upto 90 years of age. Senior Citizen Health Insurance
Plans in IndiaGeneral insurance companies offer medical insurance
for senior citizens in India and have niche products to cater to
this segment in our society. Some of the senior citizen health
insurance plans are Silver Health from Bajaj Allianz, Varistha
Mediclaim offered by National Insurance, Red Carpet Health
Insurance from Star Health Insurance, Optima Restore from Apollo
Munich, Complete from ICICI Lombard and Gold from Max Bupa. These
senior citizen mediclaim policies ensure that you are financially
protected during your golden years and are able to keep pace with
sky rocketing medical costs.What does the Senior Citizen Health
Insurance Plan cover? Hospitalization Cover: Expenses incurred as a
patient after admission of more than 24 hrs. The expenses include
room charges, doctor fees, nursing fees, cost of medicine and
drugs, etc. Day care expenses which arise from use of special
equipments or procedures like chemotherapy, dialysis, etc. Medical
expenses prior and post of hospitalization, the number of days will
vary across insurers. Ambulance charges for transporting the
insured subject to maximum limit3.8 CONSUMER AND SOCIAL PERSPECTIVE
ON HEALTH INSURANCE.With the liberalization of insurance and entry
of private companies in this business it is very important that
specific interventions are developed which focus on increasing the
consumer awareness about insurance products. One of the major
challenges after privatization of insurance would be how to develop
such mechanisms, which help making consumers aware about the
various intricacies of insurance plans. With Consumer Protection
Act coming in force it has become easy for aggrieved consumers to
complain and seek redressal for their problems. Consumer
organizations such as CERC of Ahmedabad have been helping consumers
to get due justice in disputes with the insurance companies. Most
of the time the conditions and various points included in insurance
policy contracts is not negotiable and these are binding on
consumers. Many times insurance companies do not strictly follow
the conditions in all cases and this create confusion and disputes.
(Shah M 1999) The most important area of dispute and unfair
treatment is the knowledge and implications of pre-exiting
conditions. A number of cases of litigation are disagreement on
these pre-existing conditions.This is also because some chronic
conditions such as high blood pressure and diabetes can increase
the risk of many other disease of organs such as heart, kidney,
vascular and eyes diseases. The patients with these pre-existing
conditions are denied claims for treatment of complications. This
is not fair and leads to disputes. Health insurance is typically
annual and has to be renewed yearly. Policy, which is not renewed
in time lapses and a new policy has to be taken out. Medical
conditions detected during the interim period are treated as
pre-existing condition for the new policy, which is not fair.
Courts, however, have ruled that even if there is delay in renewing
the policies it should be considered as renewed policy. In case two
doctors give different reports one favouring consumer and other
insurance company, the insurance company generally follows the
later opinion. There are several such consumer-related issues,
which need to be addressed in health insurance. Consumer
organizations have to play very active role in future development
of the health insurance sector in India.3.9 IMPLICATIONS OF
PRIVATIZATION ON HEALTH INSURANCE.
The privatization of insurance sector and constitution of IRDA
envisage improving the performance of state insurance sector in the
country by increasing benefits from competition in terms of lowered
costs and increased level of consumer satisfaction.However, the
implications of the entry of private insurance companies in health
sector are not very clear. There are several contentious issues
pertaining to development in thissector and these need critical
examination. Role of private insurance varies depending on the
economic, social and institutional settings in a country or a
region.Critics of private insurance argue that privatization will
divert scarce resources away form the pool, escalate health costs,
allow cream skimming and adverse selection.According to this view,
private health insurance largely neglects the social aspect of
health protection. In the contrast, supporters of private health
insurance claim that private insurance can bridge financing gaps by
offering consumers value for money and help them avoid waiting
lines, low quality care and under the table payments-problems often
observed when households can use public health facilities for free
or participate in mandatory social insurance schemes. Both the
arguments are correct in the sense, private health insurance can be
valuable tool to compliment or supplement existing health financing
options only if they are carefully managed and adapted to local
needs and preferences.India, with relatively developed economy and
a strong middle class population, offers most promising environment
for private health insurance development. Currently, private health
insurance plays only a marginal role in health care systems but it
is gradually gaining importance.Private health insurance is
certainly not the only alternative or the ultimate solution to
address alarming health care challenges in India. However, it is an
option that warrants and already receives-growing consideration by
policy makers in the country. Thus the question is not if this tool
will be used in the future but whether it will be applied to the
best of its potential to serve the needs of the countrys health
care system.4.1 WAYS TO FILE HEALTH INSURANCE CLAIMS
The following documents are needed in order to register the
claims for a health insurance policy: Properly filled and signed
claim form Reports and receipts of diagnostic tests accompanied by
doctor's notes Discharge certificate of the hospital Receipts and
bills from consultants, anesthetists, or specialists with diagnosis
certificate Illness related documents right from the day it was
detected - this includes consultations with the physician and the
insured's medical history and reports Surgeon or doctor's
certificate that states the complete recovery of the insured Bills,
cash memos, and receipts from the healthcare facility - this needs
to be backed up with proper prescriptions Providing previous
policies' details to the third party administrator - accidents are
regarded as exceptionsIf the hospitalization is planned the
following procedures need to be followed:
Getting in touch with the 3rd party administrator for the
particular policy and providing them the information about
hospitalization Making sure that the healthcare facility is in the
network - even if the hospital or nursing home is not in the
network the money will be provided Verification of coverage terms
Contacting the TPA (third party administrator) regarding the
availability of cash less facility. If the hospitalization is not
planned the processes mentioned below have to be adhered to:
The TPA has to be informed as early as possible and the claim
form has to be collected and filled up properly The claim form
along with necessary documents has to be submitted within 7 days of
the insured's recovery Procure all the treatment related documents
from the hospital once treatment is completed Bills have to be paid
by the insured initially - the insurance company will only
reimburse them The policy document has to be read properly to
understand which expenses are included
There is a possibility that the claimant may be rejected if the
disease is not covered by the plan. In such circumstances the
claimant needs to send a letter to the organization within 15 days
to file a complaint. If the payment is incomplete the claimant
needs to contact the TPA and find out the reasons for the same. In
majority of such cases it has been seen that if additional papers
are provided the remainder of the claim is settled.
4.2 CLAIM SETTLEMENT PROCESS IN HEALTH INSURANCE.
Health insurance product is meant to insure and pay for
unplanned and expensive medicalexpenses. Taking health insurance is
first step in insuring against medical expenses. Thesettlement of
medical expensesagainst the health insurance product is the later
onprocess of paying for the medical expenses. So after taking
health insurance product it is advisable to be aware of the medical
expenses settlement process. Settlement process can be cashless or
reimbursementA bit on how health insurance claims processing works.
In most cases, the Insurance companies appoint a third part
administrator (TPA) for claims processing. That means once the
health insurance policy is sold, the insurer passes on the baton to
the TPA. In case of a claim, the insured has to get in touch with
the TPA for all verification and formalities.
There are 2 ways by which health insurance claims are settled:
Cashless: For availing cashless treatment (only at authorized
network hospitals), the TPA has to be notified in advance (for
planned hospitalization) or within the stipulated time limits (for
emergencies). The insurance desk at hospitals usually helps with
all paper work. The claim amount need to be approved by the TPA,
and the hospital settles the amount with the TPA/ Insurer.
Typically there will be exclusions and such amount will have to be
settled directly at the hospital.
Reimbursement: Reimbursement facility can be availed at both the
network and non-network hospitals. Here the insured avails the
treatment and settles the hospital bills directly at the hospital.
The insured can claim reimbursement for hospitalization by
submitting relevant bills/ documents for the claimed amount to the
TPA.
In a reimbursement plan, the patient can be admitted in any
hospital, which may or may not be in the network hospitals list,
wherein the money spent on the treatment is compensated by the
insurance company at a later stage. To make a reimbursement claim,
documents related to the treatment like bills, original test
reports, etc. have to be produced while filing a claim. The health
insurance provider then starts processing the claim and determines
the amount that will be reimbursed.To seek reimbursement from your
health insurance provider, you have to submit the following
documents: Discharge summary Hospital and pharmacy bills Doctor's
prescriptions Diagnosis reports
Hence, policies with cashless hospitalization enable the policy
holder to receive immediate medical attention without having to
worry about payments and processing .However, the hospitals one can
go to need to be within the network of the insurance company. In
the case of reimbursement plans, one can go to any hospital, but at
a later stage, the reimbursement needs to be filed for and
claimed.While both forms of health insurance policies are common
today, the cashless hospitalization facility is a more convenient
way to combat medical emergencies.
4.3 HOW HEALTH INSURANCE COVERAGE WORKS.When you have insurance,
you pay some costs and your insurance plan pays some others. Here
are some of the ways that the payments break down: Premium: A
premium is a fixed amount you pay to your insurance plan, usually
every month. You pay this even if you don't use medical care that
month. Deductible: If you need medical care, a deductible is the
amount you pay for care before the insurance company starts to pay
its share. Once you meet your deductible, your insurance company
begins to cover some costs of your care. Some plans have lower
deductibles, like $250. Some have higher deductibles, like $2000.
Many plans providepreventive services, and sometimes other care,
before you've met your deductible. Copayment: A copayment is a
fixed amount you'll pay for a medical service after you've met your
deductible. For example, after meeting your deductible you may pay
$25 for a visit to the doctor's office that would cost $150 if you
didn't have coverage. The health plan pays the rest. Coinsurance:
Coinsurance is similar to copayment, except it's a percentage of
costs you pay. For instance, you may pay 20% of the cost of a $100
medical bill. So you would pay $20 and the health plan would pay
the rest.
4.4 HEALTH INSURANCE PREMIUM.
Following are the factors that are considered significant in
determining a health insurance policy's premium: Age - the older
the insured, the higher the premium Policy terms - if the term
period is higher the premium will come down Earlier medical history
- if the insured does not have a disease already premium will be
lower Claim free years - the more claim free years a person has the
lower the premium will be Work atmosphere of insured - pilots and
miners need to pay more than teachers or clerks. The logic is that
in occupations perceived as more hazardous there are greater
chances that the insured will encounter health problemsCoinsurance:
As per this arrangement, a certain percentage of insurance will be
paid by the company. This has a direct effect on the premium
Copay: This benefit is provided in case of individual health
insurance plans. Hereby, insurance providers share the medical
expenses like fees for doctor and medicine charges.
4.5 HOW TO SELECT THE BEST HEALTH INSURANCE PLAN.
Health insurance provides financial security when you need it
the most.Which health insurance plan is right for you depends on
numerous factors, mainly your age, and in case you are employed, do
you get insurance from your employer or you need to buy it on your
own. Regardless of your situation, here are some easy-to-follow
guides for what you need to consider to choose the best health
insurance policy. Buy health insurance when young and healthy
-Typically, people tend to consider buying a health insurance
policy in the middle of their life spans when they are in their
forties or fifties. By that time, health risks might have increased
with growing age. Further, all health insurance policies come with
a waiting period for 2-3 years for certain pre-existing
diseases.
Choose an adequate sum insured -You need to ensure that your
health insurance plan offers you with adequate health care coverage
by giving due consideration to factors like your age, age of all
your family members, increased health care costs, etc.
Individual insurance policy Vs family floater policy -You must
also consider whether you want to buy individual policies for all
family members or a family floater policy for all. In case of a
young nuclear family, it is better to opt for a family floater
policy that extents coverage to two adults and two children.
Compared to individual plans, family floater plans come at a
marginally incremental premium.
Understand the limits and exclusions - In order to offer
effective coverage, each health insurance plan has certain broad
exclusions along with waiting periods. Thus, you should refer to
your policy documents to determine which health care services are
covered and to what extent. Furthermore, you should make it a point
to ask for sample policy wordings so as to get in depth knowledge
about certain definitions, terms and conditions, exclusions and
benefits being offered while comparing different insurance policies
offered by other companies.
Claim limitation related to treatment -You should carefully note
the treatment-respective limits in the health insurance plan you
choose. Certain policies cap the amount you can claim for a
particular surgery. Such limits would restrict your claim, even if
there is a large sum insured under your policy.
Hospital network of the insurance company -It is important to
take time in obtaining and reviewing the details of the hospital
network of the insurance company. An insurer with an extensive list
of hospitals in its network across cities should be a prime
consideration.
Fill up the proposal form yourself -The questions asked in a
proposal form are comprehensive as well as personal in nature, thus
one should make it a point to fill up a health insurance proposal
form on their own. Furthermore, for the insurer to be able to
underwrite the policy in an appropriate manner, it is required that
you fill all details correctly. You should never hide any
information or overwrite on the proposal form. Inadequate
information or exclusion of medical conditions during the proposal
time can lead to issues of delayed or non-payment of claims during
times of need.
Read and understand the policy wordings -It is of utmost
importance that you read the policy wordings and other documents
carefully so as to reap maximum benefits from your respective
health insurance policy. Every health insurer provides a policy
wording document that contains details about the policy.QUESTIONS1.
Are you aware of Health Insurance Schemes?OPTIONSNO. OF
RESPONDENTS
Yes100
No0
INTREPRETATION: According to the survey 100 percent of the
customers are aware of the health insurance schemes.
1. Do you have Health Insurance Policy?OPTIONSNO. OF
RESPONDENTS
Yes42
No8
INTERPRETATION:According to the survey 42 percent of the
respondents agreed to have Health insurance policy and 8 percent of
the respondents do not have health insurance policy.
1. How much is the Medical cost annually?OPTIONSNO. OF
RESPONDENTS
40,000-60,00018
60,000-80,00023
1,00,000 and Above9
INTERPRETATION:According to the survey 18 percent of the
customers annually incurs medical cost of between 40,000-60,000, 23
percent of the customer incurs medical costs between 60,000-80,000
and 9 percent of the customer incurs medical costs between 1,00,000
and Above.
1. Your views on Health Insurance Scheme?OPTIONSNO. OF
RESPONDENTS
A.Level of satisfaction of the scheme26
B.Quality service provided19
C.Agent and customer Relationship15
INTERPRETATION:According to the survey 26 percent of the
customers are satisfied with the schemes, 15 percent of the
customers are provided with quality service and 19 percent of the
customers enjoys better agent and customer relationship.
1. Is taking insurance for health is worth?OPTIONSNO. OF
RESPONDENTS
Yes38
No12
INTERPRETATION:According to the survey 38 percent of the
customers believes that taking health insurance is worth and 12
percent of the customers are of the opinion that taking a health
insurance policy is not worth.
1. Which insurance policy is better?OPTIONSNO. OF
RESPONDENTS
A.Life13
B.Health32
C.Other5
INTERPRETATION:According to the survey 13 percent of the
customers are of the opinion that life insurance policy is better,
32 percent of the customers prefer health insurance policy as
better option and 5 percent of the customers are of the opinion
that other insurance policy is better.
1. Do I have to get private health insurance?OPTIONSNO. OF
RESPONDENTS
Yes36
No14
INTERPRETATION:According to the survey 36 percent of the
customer agreed to get private health insurance and 14 percent of
the customers did not agree to get private health insurance.
1. What do you feel after investing in Health Insurance
plans?OPTIONSNO. OF RESPONDENTS
A.Good17
B.Averagely satisfied with the investment decision26
C.Cheated7
INTERPRETATION:According to the survey 17 percent of the
customers feels good after investing in health insurance plans, 26
percent of the customers are averagely satisfied with the
investment decision and 7 percent of the customer are cheated.
1. Reasons of Investing in Health Insurance Plans?OPTIONSNO. OF
RESPONDENTS
A.Returns0
B.Recommended by Family and Friends21
C.Needs to save Tax2
D.Offers Multiple benefits like
investment+Insurance+Taxsaving15
E.Schemes are good12
INTERPRETATION:According to the survey 0 percent of the
customers invest in health insurance plans for returns, 21 percent
of the customers invest as they are recommended by family and
friends, 2 percent of the customers invest inorder to save tax, 15
percent of the customers invest in health insurance as they are
attracted to the multiple benefits offered like investment
+insurance +tax saving, 12 percent of the customers invest as they
find good health insurance schemes.
1. What would you like more in Health Insurance Policies?
OPTIONSNO. OF RESPONDENTS
A.More benefits22
B.More security26
C.Others2
INTERPRETATION:According to the survey 22 percent of the
customers would like to have more benefits, 26 percent of the
customers are interested to have more security in the health
insurance policies and 2 percent of the customers would like to
have other reasons in health insurance policies.
1. Insurance Purchased directly from an insurance company (By
this person or another family member)?OPTIONSNO. OF RESPONDENTS
Yes35
No15
INTERPRETATION:According to the survey 35 percent of the
customers purchased directly from an insurance company, 15 percent
of the customer did not purchased directly from an insurance
company.
1. How are the charges of Health Insurance policies?OPTIONSNO.
OF RESPONDENTS
A.High 19
B.Average27
C.Low4
INTERPRETATION:According to the survey 19 percent of the
customers experiences high charges for health insurance policies,
27 percent of the customers experiences average charges for health
insurance policies and 3 percent of the customer experiences low
charges for health insurance policies.
5.2 QUESTIONNAIRE.
NAME: - ____________________E-Mail ID: -
___________________MOBILE NO:- _________________
TOPIC:-HEALTH INSURANCE
QUESTIONNAIRE:-1. Are you aware of Health Insurance Schemes? Yes
No1. Do you have Health Insurance Policy? Yes No1. How much is the
medical cost annually?1. 40,000-60,0001. 60,000-80,0001. 1,00,000
and Above
1. Your views on Health insurance scheme?1. Level of
satisfaction of the scheme1. Quality service provided1. Agent and
customer relationship1. Is taking insurance for Health is worth?
Yes No
1. Which insurance policy is better?1. Life1. Health 1.
Other
1. Do I have to get private health insurance? Yes No1. What do
you feel after investing in Health insurance plans?1. Good1.
Averagely satisfied with the investment decision1. Cheated
1. Reasons of investing in Health insurance plans?1. Returns1.
Recommended by Family and Friends1. Needs to save tax1. Offers
multiple benefits like investment+ Insurance +Tax saving1. Schemes
are good
1. What would you like more in Health insurance policies?1. More
benefits1. More security1. Others
1. Insurance purchased directly from an insurance company (By
this person or another family member)? Yes No
1. How are the OF charges Health insurance policies?1. High1.
Average1. Low
CHAPTER 6. CONCLUSION.
In India, people has limited experience of health insurance.
Given that government has liberalized the insurance industry,
health insurance is going to develop rapidly in future. Health
insurance is insurance against the risk of incurring medical
expenses. By estimating the overall risk of health care expenses,
an insurer can develop a routine finance structure, such as monthly
premium or payroll tax, to ensure that money is available to pay
for the health care benefits specified in the insurance agreement.
The challenge is to see that it benefits the poor and the weak in
terms of better coverage and health services at lower costs without
the negative aspects of cost increase and over use of procedures
and technology in provision of health care. The experience from
other places suggest that if health insurance is left to the
private market it will only cover those which have substantial
ability to pay leaving out the poor and making them more
vulnerable. Hence India should proactively make efforts to develop
Social Health Insurance patterned after the German model where
there is universal coverage, equal access to all and cost
controlling measures such as prospective per capita payment to
providers. Given that India does not have large organized sector
employment the only option for such social health insurance is to
develop it through co-operatives, associations and unions. The
existing health insurance programmes such as ESIS and Mediclaim
also need substantial reforms to make them more efficient and
socially useful. Government should catalyze and guide development
of such social health insurance in India. Researchers and donors
should support such development.
6.1 BIBILOGRAPHY
Book refered :Insurance ProductsBy Indian Institute Of Banking
And Finance.
WEBSITES:http://www.medindia.net/http://www.medimanage.com/
http://www.medindia.net/ http://business.mapsofindia.com/
https://www.healthcare.gov/
http://www.ehealthinsurance.com/http://benefitof.net/benefits-of-health-insurance/
http://www.actuariesindia.org/
An%20overview_J%20Anitha.pdfhttp://listdose.com/
http://www.policybazaar.com/http://www.cccindia.co/
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