Table Of Content

Introduction to Insurance 3
Contract of Insurance 4
Health Insurance 6
History of health insurance 6
Health Care Scenario in India9
Health Insurance in India 12
Classification of Health Insurance Scheme 13
Market-Based Systems 14
m!loyer Based Schemes 21
Central "o#ernment Health Scheme $C"HS% 24
&"'S ( Community-Based Health Insurance 26
Health Insurance Initiati#es )y State "o#ernments 31
Health Insurance *olicy 32
*rocedure +ollo,ed in Settlement of Claims 3-
.hird !arty administrators $.*/0s% 43
+uture of Health Insurance 44
Conclusion 46
1
List of Tables:
Table Topic
Pag
e
no. num
ber
1 Socio Economic Indicators 10
2 Achievement of India in Health Sector 11
3 *ercenta1e of total health e2!enditure funded throu1h !u)lic(social 12
insurance and direct 1o#ernment re#enue
4 Health Insurance Coverage in India 14
3 *ercenta1e 1ro,th in 1ross !remium in insurance com!anies in 2443-43 16
6 *remium Collection from health insurance se1ment 20
- 2istin1 infrastructure under SIS in India 22
5 *u)lic insurance schemes 24
9 &on-!rofit social insurance schemes in India 27
2
Introduction to Insurance
Insurance is a protection from risk as the man is perennially exposed to risk.
6ife may sto! suddenly ,ith a heart attack7 .he house may une2!ectedly catch fire
and )e 1utted the cro! may )e lost )y #a1aries of nature8 drau1ht8 disease or flood7 .he motor
car may )e )adly dama1ed in a road accident8 thus8 risk of different kinds res ultin1 in loss
are ine#ita)le in life7 Insurance !ro#ides an ans,er )y !ro#idin1 !rotection to !ersons from
such contin1encies7
Insurance is a coverage by contract where by one party (insurer) agree to indemnify
or guarantee another (insured) against loss by a specified contingent event or peril and or
an unfortunate event. .he aim of all ty!es or classes of insurance is to afford !rotection to the
insured from the risk8 ,hich he a!!rehends or antici!ates7 .he !rotection from insurance is
a#aila)le to the insurer not in !re#entin1 the e#ent ha!!enin1 )ut in indemnifyin1 the insured
from the loss he has sustained7 Insurance is a ma9or com!onent of the financial sector7 It is a
risk transfer mechanism8 ,here)y an insured transfers a risk e2!osure to an insurer in
consideration for the !ayment of !remium7
Health care insurance or health insurance is a contract )et,een a !olicyholder and a third-!arty
!ayer or 1o#ernment !ro1ram to reim)urse the !olicyholder for all or a !ortion of the cost of
medically necessary treatment or !re#enti#e care !ro#ided )y health care !rofessionals7 .he
su)9ect matter of insurance is *:'*:.;8 *:MI<M8 and 6I/BI6I.;7
Function of Insurance
.he function of insurance is t,o folds7 In the first instance it transfers or shifts a risk
from one indi#idual to a 1rou! and secondly8 the losses are shared8 on some e=uita)le )asis
)y all mem)ers of the 1rou!7 Insurance is a de#ice ,here-)y the risk of financial loss
accruin1 from death or disa)ility8 or dama1e to8 or destruction of !ro!erty o,in1 to !erils to
,hich they are e2!osed is !assed on to another7 .he insurer8 of course8 collects an a1reed rate
of contri)ution from a lar1e num)er of !eo!le and relie#es the insured !artly8 if not ,holly8
from the effects of loss )y !ayin1 the insurance mo ney7
3
Contract of Insurance
/ contract of insurance is an a1reement ,here)y one !arty called the Insurer
undertakes8 in return for an a1reed consideration8 called the *remium8 to !ay the other !arty
namely8 the Insured a sum of money or its e=ui#alent in k ind8 u!on the occurrence of
s!ecified e#ent resultin1 in loss to him7
.he *olicy is a document8 ,hich is an e#idence of the contract of insurance7 .he contract of
insurance is 1o#erned )y the la, of contract as em)odied in the Indian Contract /ct815-27
/ll insurance contracts must ha#e the follo,in1 fi#e essential elements in order that they
may )e le1ally enforcea)le7
1. Offer and acceptance: .he !erson ,ho ,ants to take u! co#er a1ainst !articular
!erils offers his risk throu1h a !ro!osal form to the insurance com!any7
2. Consideration: .he !remium !aid is the consideration and on its recei!t )y the
insurance com!any the contract of insurance comes into force7
3. Consensus Ad Idem: .he !arties to the contract must )e of the same mind and
there should )e a com!lete and un)iased a1reement )et,een the insurer and the
insured re1ardin1 the terms of the contract7 .he intention of the insured should ha#e
)een clearly understood )y the insurance com!any7
4. Capacity to Contract: Both the !arties must )e le1ally com!etent to enter into an
a1reement7 .he !arties to the contract should not )e of unsound mind7 .hey must
ha#e attained the a1e of ma9ority and should not ha#e )een declared as insol#ent7
5. Legality of the Object of the Contract: .he !ur!ose for ,hich the a1reement is
entered into should )e le1al and not o!!osed to !u)lic !olicy7
Basic Principles of Contract of Insurance
1. Insurable Inte rest
/ contract of insurance does not undertake to !re#ent the occurrences of the !eril
insured a1ainst7 >hat it !ro#ides is a !romise to make 1ood the financial loss caused )y
the o!eration of the insured !eril7
4
2. Utmost good faith
6a, re=uires )oth the !arties to the contract to o)ser#e 1ood faith8 ,hich means a)sence
of fraud7 Insurance contracts are su)9ected )y la, to a hi1her duty namely of utmost 1ood
faith7 .he !ro!oser has a duty to disclose to the insurer all material facts ,hich he kno,s and
,hich he ou1ht to kno,n7 / material fact is a fact ,hich affect the 9ud1ment of a !rudent
under,riter decidin1 ,hether to acce!t the risk and if so8 at ,hat rate of !remium and
su)9ect to ,hat terms and conditions7
3. Indemnity
Indemnity means com!ensation for loss or in9ury7 It also means security or !rotection
a1ainst loss or dama1e7 Insurance contracts !romise to make 1ood the loss or dama1e
limitin1 it to the amount of loss or dama1e su)9ect to the sum insured7
4. Subrogation and Contribution
Su)ro1ation is defined as the transfer of ri1ht and remedies of the insured to the insurer
,ho has indemnified the insured in res!ect of the loss7
5. Proximate Cause
.he o)9ect of insurance is to !ro#ide indemnity not for any loss )ut only for such losses
as are caused )y insured !erils7 .he !erils insured are clearly stated in the !olicy and the
lia)ility of the insurer arises only if the loss is caused )y these !erils7
Classification of Insurance
Insurance )usiness is )roadly classified into
Life Insurance and
General Insurance (or non life insurance! business

"eneral insurance )usiness is )roadly under the follo,in1 heads ?

1. Property Ins urance @ +ire8 theft8 n1ineerin1 and miscellaneous accident
Motor Insurance7
2. Liability Insurance @ m!loyees lia)ility8 !u)lic lia)ility8 !roducts lia)ility and
!rofessional indemnity8 !ecuniary Insurance0s8 fidelity 1uarantee credit insurance7
3. Personal accident and health Insurance"
4. Crop # cattle insurance7
5. $arine insurance7
Health Insurance
Health insurance has )ecome a necessity in today0s ,orld considerin1 the rise in the cost
of medical care and treatment and the hu1e !o!ulation of the country7 .he escalatin1 cost of
medical treatment today is )eyond the reach of the common man7 #en if an indi#idual is
healthy and has ne#er had any ma9or !ro)lem8 it is not !ossi)le to !redict ,hat may ha!!en in
the future7 .here is a 1ro,in1 !u)lic a,areness for )etter health care and desire to ha#e )etter
health care from !ri#ate medical !ro#iders7 In case of a medical emer1ency8 cost of hos!ital
room8 doctor0s fees8 medicines and related health ser#ices all add u! to a hu1e sum7 In such
times8 health insurance !ro#ides the much needed financial relief7
History of health insurance
Introduction
Some !eo!le think of health insurance as a recent de#elo!ment in human history7 But
concern for financial loss resultin1 from accident and illness can )e traced to ancient
ci#iliAations7 Health insurance8 limited !rimarily to disa)ility income in case of accident
e2isted in the early history of :ome7 .his tradition continued in uro!e in the Middle /1es8
and )y the 1-th century there ,ere la,s !ro#idin1 sickness insurance for seamen and
dismem)erment insurance for soldiers7
6
Health insurance today is a )road array of co#era1e !ro#idin1 for the !ayment of )enefits as
a result of sickness and in9ury7 It includes insurance for losses from medical e2!ense8
accident8 disa)ility8 and accidental death and dismem)erment $/BCB%7
%xpansion and Gro&th of Indi'idual (ealth Insurance
Pre-World War I
.he trend to,ard )roadened co#era1e continued in the early !art of the century7 +or e2am!le8
insurers e2tended disa)ility !ro#isions from 26 ,eeks to 32 ,eeks and then to 144 ,eeksD in
1913 they introduced lifetime disa)ility )enefits7 Insurers also )e1in ,ritin1 !olicies that they
had to rene,8 ,ith !remium rates that the insurers could not raise7 /t the same time8 ad#erse
conditions e2isted7 .he !olicies had hea#y restrictions and there ,as no coo!eration amon1
the insurers to im!ro#e the condition of the insurance )usiness7
Trends and e!elopments: "#"$-"#%&
.he health insurance )usiness e2!erienced little 1ro,th in the years immediately
follo,in1 >orld >ar I7 .he colla!se of the stock market in 'cto)er 19298 follo,ed )y the
"reat Be!ression8 affected the health insurance industry 1reatly7 6oss ratios clim)ed in the
field of sickness disa)ility co#era1e0s7 /ccidental death and monthly indemnity risks ,ere a
sta11erin1 source of loss7 .he industry0s !ro)lems ,ere com!ounded )y im!ro!er
under,ritin1 and inade=uate !remiums resultin1 from insufficient claim e2!erience7
Burin1 and after the Be!ression8 a ne, era of health insurance )e1an7 Some of
the inno#ations and chan1es that ,ere introduced in the 1934s included?
1. m!hasis in !ri#ate insurance on reim)ursement for hos!ital8 sur1ical and medical
e2!enses7
2. Introduction of )lanket accident e2!ense !olicies7
3. Introduction of co#era1e for the entire family7
7
'ro(th )ears: "#%&-"#*&
/fter >orld >ar II8 health insurance as a ,hole entered a !eriod of dynamic 1ro,th
e2ceedin1 that of any other form of insurance7 *eo!le ,ere lookin1 for )road co#era1e
and 1uaranteed )enefits and to meet this need the indi#idual health industry e2!anded
hos!ital and medical e2!ense !olicies and made 1reater use of rene,a l 1uarantees7
.he )e1innin1 of a ne, decade in 1934 ,itnessed the continued 1ro,th and e2!ansion of
the indi#idual health insurance industry7 Contri)utin1 to the e2!ansion ,as an increasin1
!u)lic a,areness of the sta11erin1 loss of national income from accident and sickness7
In 1936 the <S Con1ress esta)lished the Social Security Bisa)ility Insurance
$SSBI% !ro1ram7 It also enacted t,o health insurance !ro1ram8 Medicare for the elderly and
Medicaid for the !oor7
Indi!idual +ealth Insurance Today
Chan1es in indi#idual health insurance e#ol#ed in res!onse to customer needs8
cost containment acti#ities and le1islati#e mandates7
Startin1 in the 1934s indi#idual health insurance for #arious e2!enses incurred for medical
care )ecame more readily a#aila)le for !ersons under a1e 637 *ri#ate insurers no, offer
indi#idual com!rehensi#e co#era1e8 inte1ratin1 )asic and ma9or medical co#era1e in a sin1le
!olicy ,ith a deducti)le and ,ith an unlimited ma2imum )enefit7
Emerging Trends
Insurers ha#e de#elo!ed health insurance !roducts to reflect chan1es in the
socioeconomic en#ironment7 Both the ran1e of )enefits and the sco!e of co#era1e
ha#e increased to meet chan1in1 needs7
Mana1ed care8 ,hich is fast )ecomin1 the leadin1 form of health insurance deli#ery8
inte1rates the financin1 and deli#ery of a!!ro!riate health care ser#ices7 *ro#iders in
mana1ed care !lans offer standardiAed health ser#ices to enrollees at set costs that
1enerally are lo,er than traditional fee- for-ser#ice arran1ements7
!
Health Care Scenario in India
Introduction
.he health care system in India is characteriAed )y multi!le systems of medicine8
mi2ed o,nershi! !atterns and different kinds of deli#ery structures7 *u)lic sector o,nershi!
is di#ided )et,een central and state 1o#ernments8 munici!al and *anchayat local
1o#ernments7 *u)lic health facilities include teachin1 hos!itals8 secondary le#el hos!itals8
first- le#el referral hos!itals $rural hos!itals%8 dis!ensariesD !rimary health centers $*HCs%8
su)-centers8 and health !osts7 /lso included are !u)lic facilities for selected occu!ational
1rou!s like or1aniAed ,ork force $SI%8 defense8 1o#ernment em!loyees $C"HS%8 rail,ays8
!ost and tele1ra!h and mines amon1 others7 .he !ri#ate sector $for !rofit and not for !rofit%
is the dominant sector ,ith 34 !er cent of !eo!le seekin1 indoor care and around 64 to -4 !er
cent of those seekin1 am)ulatory care $or out!atient care% from !ri#ate health facilities7 >hile
India has made si1nificant 1ains in terms of health indicators - demo1ra!hic8 infrastructural
and e!idemiolo1ical $See .a)les 1 and 2%8 it continues to 1ra!!le ,ith ne,er challen1es7 &ot
only ha#e communica)le diseases !ersisted o#er time )ut some of them like malaria ha#e
also de#elo!ed insecticide-resistant #ectors ,hile others like tu)erculosis are )ecomin1
increasin1ly dru1 resistant7 HIE ( /IBS ha#e of late assumed e2tremely #irulent !ro!ortions7
.he 1994s ha#e also seen an increase in mortality on account of non-communica)le diseases
arisin1 as a result of lifestyle chan1es7 .he country is no, in the midst of a dual disease
)urden of communica)le and non communica)le diseases7 .his is cou!led ,ith risin1 health
costs8 hi1h financial )urden on the !oor and erosion in their incomes7 /round 24F of all
!eo!le hos!italiAed in India in a sin1le year fall )elo, the !o#erty line due to hos!italiAation
$>orld Bank8 2442%7 /n analysis of financin1 of hos!italiAation sho,s that lar1e !ro!ortion
of !eo!leD es!ecially those in the )ottom four income =uintiles )orro, money or sell assets to
!ay for hos!italiAation $>orld Bank8 2442%7
.his situation e2ists in a scenario ,here health care is financed throu1h 1eneral ta2 re#enue8
community financin18 out of !ocket !ayment and social and !ri#ate health insurance schemes7
India s!ends a)out 479F of "B* on health7 .he !er ca!ita total e2!enditure on health in India is
<SG 238 of ,hich the !er ca!ita "o#ernment e2!enditure on health is <SG 47 Hence8 it is seen
that the total health e2!enditure is around 3F of "B*8 ,ith )reakdo,n of !u)lic e2!enditure
$479F%D !ri#ate e2!enditure $474F%7 .he !ri#ate e2!enditure can )e further
"
classified as out-of-!ocket $''*% e2!enditure $376F% and em!loyees(community financin1
$474F%7 It is thus e#ident that !u)lic health in#estment has )een com!arati#ely lo,7
In fact as a !ercenta1e of "B* it has declined from 173F in 1994 to 479F as at !resent7
+urthermore8 the central )ud1etary allocation for health $as a !ercenta1e of the total Central
)ud1et% has )een sta1nant at 173F ,hile in the states it has declined from -74F to 373F7
)able *" Socioeconomic indicators
Land area 2F of ,orld area
Burden of disease (+! 21F of 1lo)al disease )urden
Population 16F of ,orld !o!ulation
Urban , -ural 25?-2
Lite racy rate (+! 63735
Sanitation (+! :ural @ 974D <r)an @ 4973
Safe drin.ing &ater supply (+! :ural @ 95D <r)an @ 9472
Po'erty (+! Belo, !o#erty line @ 26
-ural / 01"234 Urban / 05"60
Po'erty line (-s"! :ural @ 32-736D <r)an @ 434711
10
)able 0" 7chie'ements, *38* 0222
1931 1951 2444
9emographic changes
6ife e2!ectancy 367- 34 6476 $:"I%
Crude )irth rate 4475 3379 $S:S% 2671 $99 S:S%
Crude death rate 23 1273 $S:S% 57- $99 S:S%
Infant mortality rate 146 114 -4 $99 S:S%
%pidemiology
Malaria -3 27- 272
$cases in million%
6e!rosy cases !e 148444 3571 3-73 37-4
!o!ulation
Small !o2 $no of cases% H44855- radicated
"uinea ,orm $no7 of cases% H398-92 radicated
*olio 29-49 263
Infrastructure
SC(*HC(CHC -23 3-8363 18638151 $99-:HS%
Bis!ensaries C hos!itals $all% 9249 238333 438322 $93@96-
CBHI%
Beds $*#t C *u)lic% 11-8195 3698493 58-48161 $93-96-
CBHI%
Boctors $/llo!athy% 618544 28658-44 38438944 $95-99-
MCI%
&ursin1 !ersonnel 158434 1843855- -83-8444 $99-I&C%
In li1ht of the fiscal crisis facin1 the 1o#ernment at )oth central and state le#els8 in
the form of shrinkin1 !u)lic health )ud1ets8 escalatin1 health care costs cou!led ,ith
demand for health-care ser#ices8 and lack of easy access of !eo!le from the lo,- income
1rou! to =uality health care8 health insurance is emer1in1 as an alternati#e mechanism for
financin1 of health care7
11
Health Insurance in India
Health insurance can )e defined in #ery narro, sense ,here indi#idual or 1rou!
!urchases in ad#ance health co#era1e )y !ayin1 a fee called I!remiumI7 But it can )e also
defined )roadly )y includin1 all financin1 arran1ements ,here consumers can a#oid or
reduce their e2!enditures at time of use of ser#ices7 .he health insurance e2istin1 in India
co#ers a #ery ,ide s!ectrum of arran1ements and hence the latter- )roader inter!retation of
health Insurance is more a!!ro!riate7
Health insurance is #ery ,ell esta)lished in many countries7 But in India it is a ne,
conce!t e2ce!t for the or1aniAed sector em!loyees7 In India only a)out 2 !er cent of total
health e2!enditure is funded )y !u)lic(social health insurance ,hile 15 !er cent is funded
)y 1o#ernment )ud1et7 In many other lo, and middle income countries contri)ution of
social health insurance is much hi1her $see .a)le 3%7
)able 5" Percentage of total health expenditure funded
through public:social insurance and direct go'ernme nt
re'enue
Country Social (ealth Go'ernment Budget
Insurance
/l1eria 3- 36
Boli#ia 24 33
China 31 13
Jorea 23 14
Eietnam 2 24
India 2 15
,ource: /s cited in &aylor et al72442
It is estimated that the Indian health care industry is no, ,orth of :s7 968444 crore
and e2!ected to sur1e )y 148444 crore annually7 .he share of insurance market in a)o#e
fi1ure is insi1nificant7 'ut of one )illion !o!ulation of India 313 million !eo!le are estimated
to )e insura)le and ha#e ca!acity to s!end :s7 1444 as !remium !er annum7 Many 1lo)al
insurance com!anies ha#e !lans to 1et into insurance )usiness in India7 Market research8
detailed !lannin1 and effecti#e insurance marketin1 is likely to assume si1nificant
12
im!ortance7 "i#en the health financin1 and demand scenario8 health insurance has a ,ider
sco!e in !resent day situations in India7 Ho,e#er8 it re=uires careful and si1nificant effort
to ta! Indian health insurance market ,ith !ro!er understandin1 and trainin17
.he a)o#e 1ra!h sho,s shar! rise in the !enetration of the Health Insurance in India after
19997 .his ,as due to the !olicy chan1e )y I:B/ $Insurance re1ulatory and de#elo!ment
)oard of India% and !ri#ate !layers ,ere allo,ed to enter the health insurance se1ment7
Classication of Health Insurance Scheme
.here are #arious ty!es of health co#era1e in India7 Based on o,nershi! the e2istin1
health insurance schemes can )e )roadly di#ided into cate1ories such as?
-ar.et-based systems /pri!ate and !oluntary0
1mployer based insurance schemes
-ember organi2ation /3'O or cooperati!e0-based systems
'o!ernment or state-based systems
13
.he health care demand is risin1 in India no, days7 It is estimated that only 14 !er cent of
health insurance market has )een ta!!ed till today7 Still there is a sco!e of rise u! to 33
!ercent in near future7
!ar"et#$ased Systems
*" $ediclaim scheme
.he 1o#ernment insurance com!anies started first health insurance in 19568 under the name
mediclaimD thereafter Mediclaim has )een re#ised to make it attracti#e !roduct7 Mediclaim is a
reim)ursement )ase insurance for hos!italiAation7 It does not co#er out!atient treatments7 +irst
there is used to )e cate1ory-,ise ceilin1s on items such as medicine8 room char1es8 o!eration
char1es etc7 and later ,hen the !olicies ,ere re#ised these ceilin1s ,ere remo#ed and total
reim)ursements ,ere allo,ed ,ith in the limit of the !olicy amount7 .he total limit for !olicy
co#era1e ,as also increased7 &o, a !erson )et,een 3 months to 54 years of a1e can )e 1ranted
mediclaim !olicy u! to ma2imum co#era1e of :s7 3 lakh a1ainst accidental and sickness
hos!italiAations durin1 the !olicy !eriod as !er latest 1uidelines of "eneral Insurance
Cor!oration of India7 .his scheme is offered )y all the four su)sidiary com!anies of "IC7
Mediclaim scheme is also a#aila)le for 1rou!s ,ith su)stantial discount in !remium7 .he ta)le 4
)elo, indicates the share of #arious forms of health co#era1e in India7
)able ;,
(ealth insurance co'erage in India
Schemes Beneficiaries (In
million!
.he m!loyees State Insurance Scheme $SIS% 2373
Central "o#ernment Health Scheme $C"HS% 4731
:ail,ays Health Scheme 5
Befense em!loyees 676
2-ser#icemen -73
Minin1 and !lantations $!u)lic sector% 4
Health insurance $*u)lic sector non- life com!anies% 14
Health insurance $*ri#ate sector non- life com!anies% 475
Health se1ment of 6ife insurance com!anies $*u)lic 47232
14
and !ri#ate sector%
State s!onsored schemes K473
m!loyer run facilities(reim)ursement schemes of 6
!ri#ate sector
m!loyer run facilities(reim)ursement schemes of K5
!u)lic sector
Community health schemes 3
)otal <=8
,ource: "u!ta and .ri#edi
.he current statistics on health insurance indicate that out of 1 )illion !o!ulation only a)out
2 million of !o!ulation is co#ered )y Mediclaim scheme7 .he reason for lack of !o!ularity of
this scheme could )e se#eral7 .he health insurance !roducts are 1enerally com!licated and it
is su11ested that "IC and its su)sidiary com!anies ,ho deal in non-life insurance market
,hich is dominated )y mandated insurance such as accident8 fire and marine8 do not ha#e
e2!ertise in marketin1 health insurance and therefore this scheme is not !o!ular7 Health
insurance also re!resents #ery small !ercenta1e of o#erall )usiness of "IC and its
su)sidiaries hence they ha#e also not focused their attention in this area7 .he "IC com!anies
ha#e little interest and mean to monitor the scheme7 It should also )e reco1niAed that )ecause
of technicalities of health ser#ice )usiness there are num)er of cum)ersome rules ,hich ha#e
ham!ered the acce!tance of the scheme7 It is also re!orted that in num)er of cases the
a!!licants of older a1es ha#e )een refused to )ecome mem)er of mediclaim scheme due to
unnecessary conser#atism of the com!anies7
/nother area of less !o!ularity of the Mediclaim is the lack of a!!ro!riate marketin1
efforts in sellin1 these !roducts7 .o !o!ulariAe the schemes it is im!ortant that !ro!er
marketin1 is done7 .o make the scheme more acce!ta)le 1o#ernment has e2em!ted the
!remium !aid )y indi#iduals from their ta2a)le income7 .his !ro#ides 24-44F su)sidy on
the !remium to ta2!ayers7
Mediclaim has !ro#ided a model for health insurance for the middle class and the rich7 It
co#ers hos!italiAation costs8 ,hich could )e catastro!hic7 But 1i#en the !remium is on hi1her
side it as remained limited to middle class8 ur)an ta2 !ayers se1ment of the !o!ulation7 .here
are also !ro)lems and ne1ati#e unintended conse=uences of this scheme7 .here are re!orted
1
fraud and mani!ulation )y clients and !ro#iders8 ,hich ha#e im!lications for the 1ro,th and
de#elo!ment of this sector7 .he monitorin1 systems are ,eak and there are chances that if the
doctor and !atient collude ,ith each other8 they can do more harm to the system7 .here is
also element of ad#erse selection !ro)lem as the scheme is #oluntary7 /s the scheme
reim)urses char1es ,ithout limit it also ,ill !ushed u! the !rices of ser#ices in the !ri#ate
sector7
Ho, successful has Mediclaim )een in India from a )usiness !ers!ecti#eL >hile the details
on the !erformance of the Mediclaim in its early years are not a#aila)le8 durin1 1999-24448
the last year )efore the entry of !ri#ate com!anies8 some 273 million Mediclaim !olicies
,ere sold8 addin1 u! to a total health !remium of :s7 244 crores7 $"ina Sin1h8 2441%47 >ith
the entry of the !ri#ate !layers8 the health )usiness has also increased shar!ly7 .he health
!remium has sho,n an im!ressi#e ei1ht- fold 1ro,th in the last fi#e years reachin1 :s7 1-32
crores in 2444-437 .his statistics clearly reflects the contri)ution of the health se1ment to the
o#erall 1ro,th of insurance sectorD ,hile insurance sector is 1ro,in1 as a ,hole8 the health
se1ment is contri)utin1 to this 1ro,th to a 1reat e2tent7
.he ta)le 3 )elo, indicates8 in the year 2443-448 the 1ross !remium of health se1ment
increased )y 33 !ercent com!ared to 19 !ercent in Motor insurance and - !ercent in +ire
insuranceD for the !u)lic sector com!anies at least8 the health insurance se1ment has sho,n
the most 1ro,th7 Burin1 2444-438 health insurance se1ment continued to to! the list8
ho,e#er at a slo,er rate of 25 !ercent7
)able 8,
Percentage gro&th in gross pre mium in insurance companies in 022528
02252; 022;28
Insure r
Fire $arine %ngg" $otor (ealth )otal Fire $arine %ngg" $otor (ealth )otal
Public 5"55 *5"50 ;";; *5";6 0="=3 6"86 *";6 0"=8 ;"5* 3"52 *1"13 8";5
sector
&e, - -21794 157-9 5746 34792 371- 2734 -2731 -37-1 5723 2-733 4735
India 1479-
&ational -1763 -13714 - 297-3 42736 1572- 3743 34793 4765 19742 26725 11794
19762
16
<nited 476- -11732 -6746 375- 14753 3733 -6769 -1573-
India
'riental -1762 -4741 --743 12725 -75- 1742 -3761 14744
Pri'ate 65"8= *02"=8 ;5"8* =6"61 *52"50 61";2 0="12 ;="86
sector
)otal 6"81 5"30 5"3; *="66 58"*5 *0"52 8"53 *2"00
14742 --7-9 3724 -37--
375- 14754 6753 -731
62";= 12"53 **;"0* 81"58
*1"=8 *6"*5 01"3* *0"15
.here are many other ne,
!roducts de#elo!ed )y the "IC
#iAD
1. Bha#ishya /ro1ya
*olicy8 ,ith a sin1le
sum insured7 It is a
deferred treatment !lan
for lon1 term health
care of old a1e7 .he
sum insured can )e
enhanced in multi!les
of :s7 148444 startin1
from :s7 348444 on
,ards at a cost of 24F
an additional !remium8
four years )efore the
commencement of the
retirement a1e7
2. Senior citiAens unit
!lan $SC<*%- launched
as a 9oint #enture !lan
of the unit trust of India
and the &e, India
/ssurance com!any8
,hich is linked to an
annuity retirement !lan8
!ro#i
din1
hos!i
taliAa
tion
)enef
it u!
to
:s7 3
lakhs
7 It is
a
com)
ined
limit
of
life
time
for
in#es
tors
and
their
s!ou
se7
3. Ca
nc
er insurance8 limited to mem)ers of
the Indian cancer society7 /nother
cancer !olicy is cancer Insurance
!olicy for the mem)er of cancer
!atients /id association7
0" Pri'ate Insurance schemes
1) Ba>a> 7llian?,
Ba9a9 /lliance offers three health
insurance schemes namely8 Health
"uard8 Critical Illness *olicy and
Hos!ital Cash Baily /llo,ance
*olicy7
The ealth !uard scheme is a#aila)le
to those a1ed 3 to -3 years $not
allo,in1 entry for those o#er 33 years
of a1e%8 ,ith the sum assured ran1in1
from :s 144 4444 to 344 4447 It offers
cashless )enefit and medical
reim)ursement for hos!italiAation
e2!enses $!reand !ost-
hos!italiAation% at #arious hos!itals
across India $su)9ect to e2clusions and
conditions%7 In case the mem)er o!ts
for hos!itals )esides the em!anelled
ones8 the e2!enses incurred )y him are
reim)ursed ,ithin 14 ,orkin1 days
from su)mission of all
the documents7 >hile
!re-e2istin1 diseases
are e2cluded at the
time
of
taki
n1
the !olicy8 they are co#ered from the
3th year on,ards if the
1
7
!olicy is continuously rene,ed for four years and the same has )een declared ,hile
takin1 the !olicy for the first time7 'ther disco unts and )enefits like ta2 e2em!tion8
health check- u! at end of four claims free year8 etc7 can )e a#ailed of )y the insured7
The "ritical Illness policy !ays )enefits in case the insured is dia1nosed as sufferin1
from any of the listed critical e#ents and sur#i#es for minimum of 34 days from the
date of dia1nosis7 .he illnesses co#ered include? first heart attackD Coronary artery
disease re=uirin1 sur1ery? strokeD cancerD kidney failureD ma9or or1an trans!lantationD
multi!le sclerosisD sur1ery on aortaD !rimary !ulmonary arterial hy!ertension8 and
!aralysis7 >hile e2clusion clauses a!!ly8 !remium rates are com!etiti#e and hi1h-sum
insurance can )e o!ted for )y the insured7
The ospital "ash #aily $llowance %olicy !ro#ides cash )enefit for each and e#ery
com!leted day of hos!italiAation8 due to sickness or accident7 .he amount !aya)le
!er day is de!endant on the selected scheme7 Be!endant s!ouse and children $a1ed 3
months @ 21years% can also )e co#ered under the *olicy7 .he )enefits !aya)le to the
de!endants are linked to that of insured7 .he *olicy !ays for a ma2imum sin1le
hos!italiAation !eriod of 34 days and an o#erall hos!italiAation !eriod of 34(64
com!leted days !er !olicy !eriod !er !erson re1ardless of the num)er of
confinements to hos!ital(nursin1 home !er !olicy !eriod7
.he other scheme !ro#ided includes Sil#er health !olicy8 Health
insurance !olicy8 Star *acka1e !olicy8 etc7
2) ICICI Lombard,
ICICI 6om)ard offers "rou! Health Insurance *olicy7 .his !olicy is a#aila)le to those
a1ed 3 @ 54 years8 $,ith children )ein1 co#ered ,ith their !arents% and is 1i#en to
cor!orate )odies8 institutions8 and associations7 .he sum insured is minimum :s 13 444(-
and a ma2imum of :s 344 444(-7 .he !remium char1ea)le de!ends u!on the a1e of the
!erson and the sum insured selected7 / sla) ,ise 1rou! discount is admissi)le if the
1rou! siAe e2ceeds 1447 .he !olicy co#ers reim)ursement of hos!italiAation e2!enses
incurred for diseases contracted or in9uries sustained in India7 Medical e2!enses u! to 34
days for *re-hos!italiAation and u! to 64 days for !ost-hos!italiAation are also
admissi)le7 2clusion clauses a!!ly7 Moreo#er8 fa#ora)le claims e2!erience is reco1niAed
)y discount and con#ersely8 unfa#ora)le claims
1!
e2!erience attracts loadin1 on rene,al !remium7 'n !ayment of additional
!remium8 the !olicy can )e e2tended to co#er maternity )enefits8 !re-e2istin1
diseases8 and reim)ursement of cost of health check-u! after four consecuti#e
claims- free years7 .he Earious !lans !ro#ided are? Health /d#anta1e *lus
Insurance8 +amily +loater *lan8 etc7
3) -oyal Sundaram Group, .he Shakthi Health Shield !olicy offered )y the :oyal
Sundaram 1rou! can )e a#ailed )y mem)ers of the ,omen0s 1rou!8 their s!ouses and
de!endent children7 &o a1e limits a!!ly7 .he !remium for adults a1ed u! to 43 years
is :s 123 !er year8 for those a1ed more than 43 years is :s 1-3 !er year7 Children are
co#ered at :s 63 !er year7 <nder this !olicy8 hos!ital )enefits u! to :s - 444 !er
annum can )e a#ailed8 ,ith a limit !er claim of :s 3 4447 'ther )enefits include
maternity )enefit of :s 3 444 su)9ect to ,aitin1 !eriod of nine months after first
enrolment and for first t,o children only7
4) Cholamandalam Gene ral Insurance, .he )enefits offered $in association ,ith the
*aramount Health Care8 a re- insurer% in case of an illness or accident resultin1 in
hos!italiAation8 are cash- free hos!italiAation in more than 1 444 hos!itals across
India8 reim)ursement of the e2!enses durin1 !re- hos!italiAation $64 days !rior to
hos!italiAation% and !ost- hos!italiAation $94 days after dischar1e% sta1es of treatment7
'#er 134 minor sur1eries that re=uire less than 24 hours hos!italiAation under day
care !rocedure are also co#ered7 2tra health co#ers like 1eneral health and eye
e2amination8 local am)ulance ser#ice8 hos!ital daily allo,ance8 and 24 hours
assistance7
.here are many other !ri#ate insurers also7 .he data of the !remium collection of the
#arious health insurance com!anies is 1i#en in the ta)le 6 )elo,?
1"
)able 6
Premium Collection from health insurance segment
20
+rom the a)o#e ta)le it can )e seen that there is a 1reat )oost in the
!remium collection from the health insurance se1ment7
Employer $ased Schemes
*" %mployee State Insurance (%SI! Sche me
<nder the SI /ct8 1945 SI Scheme !ro#ides !rotection to em!loyees a1ainst loss of ,a1es
due to ina)ility to ,ork due to sickness8 maternity8 disa)ility and death due to em!loyment
in9ury7 It also !ro#ides medical care to em!loyees and their family mem)ers ,ithout fee for
ser#ice7 >hen im!lemented for the first time in India at t,o centers namely Belhi and
Jan!ur simultaneously in +e)ruary 19328 it co#ered a)out 172 lakh em!loyees7 *resently the
scheme is s!read o#er 22 states and <nion territories across India co#erin1 91lakh em!loyees
and more than 334 lakh )eneficiaries7 .he /ct com!ulsorily co#ers? $a% all !o,er usin1 non-
seasonal factories em!loyin1 14 or more !ersonsD $)% all non-!o,er usin1 factories
em!loyin1 24 or more em!loyees and $c% ser#ice esta)lishments like sho!s8 hotels
restaurants8 cinema8 road trans!ort and ne,s !a!ers are co#ered7 SIC is a cor!orate semi-
1o#ernment )ody headed )y <nion Minister of 6a)or as Chairman and the Birector "eneral
as chief e2ecuti#e7 Its mem)ers are re!resentati#es of central and state 1o#ernments8
em!loyers8 em!loyees8 medical !rofession and !arliament7
21
.he financin1 of the scheme is done )y m!loyees State Insurance Cor!oration $SIC%
,hich is made u! of contri)utions from? $a% em!loyees ,ho contri)ute at the rate 17-3 !er
cent of their ,a1es $if daily ,a1e is :s723 or less8 his contri)ution is ,ai#ed%D $)%
em!loyers ,ho contri)ute at the rate of 47 -3 !er cent of total ,a1e )ills of their em!loyees
to contri)ution on )ehalf and for em!loyees ha#in1 daily ,a1e of:s7 23 or lessD and $c%
State "o#ernments contri)utes 1273 !er cent of total sharea)le e2!enditure ,orked out )y
!rescri)ed ceilin1 on e2!enditure ,hich is :s7 644 !er insured !erson !er annum and
e2!enditure incurred outside(o#er and a)o#e the !rescri)ed limit7
.he State "o#ernment runs the medical ser#ices of this scheme of social insurance meant
for em!loyees co#ered under the SI /ct 19457 .his scheme - com!ulsory and contri)utory
in nature - !ro#ide uniform !acka1e of medical and cash )enefits to insured !ersons is
im!lemented throu1h s!ecial SI hos!itals and dia1nostic centers8 dis!ensaries and !anel
doctors7 .he e2istin1 facilities under the SIS are !ro#ided in .a)le -7
.he deli#ery of medical care is throu1h ser#ice $direct% system and(or !anel $indirect%
system7 It !ro#ides allo!athic medical care8 )ut medical care )y other systems like ayur#edic
and homeo!athy in the states is also !ro#ided as !er the state 1o#ernment decision7 .he
medical care consists of !re#enti#e8 !romoti#e8 curati#e and reha)ilitati#e ty!es of ser#ices
are !ro#ided )y the scheme throu1h its o,n net,ork or throu1h arran1ements ,ith re!uted
1o#ernment or !ri#ate institutions )y conce!t of !ro!er referral system and re1ionalisation7
)able 1" %xisting infrastructure under
%SIS in India
Particulars
&o7 of Centers 632
&o7 of Insured *ersons(+amily 548438444
<nits
SI Hos!itals 123
&um)er of SI Hos!ital Beds 238334
SI Bis!ensaries 18443
Insurance Medical 'fficers 68224
Insurance Medical *ractitioners 28944
22
*re#enti#e ser#ices include immuniAation8 maternal and child health8 family ,elfare
ser#ices7 *romoti#e ser#ices include health education and health check- u! cam!s7 Curati#e
ser#ices include? dis!ensary care8 hos!ital care8 maternity care8 su!!orti#e ser#ices includin1
dia1nostic centre8 dru1s8 dressin1s8 sur1ical !rocedures8 dental care8 !rosthesis and other
a!!liances7 :eha)ilitati#e ser#ices include? !hysical reha)ilitation8 economical reha)ilitation8
and !ro#ision of artificial aids $social8 !sycholo1ical reha)ilitation%7
#en thou1h the scheme is formulated ,ell there are many !ro)lem areas in mana1in1
this scheme7 Some of the !ro)lems are?
6ar1e num)er of em!loyers try to a#oid )ein1 co#ered under the scheme8
/ lar1e num)er of !osts of medical staff remains #acant )ecause of hi1h turno#er and
len1thy recruitment !rocedures8
.here is duality of control8
:isin1 costs and technolo1ical ad#ancement in su!er s!ecialty treatment8
Mana1ement information system is not satisfactory7
.here is lo, utiliAation of the hos!itals
.he ,orkers are not satisfied ,ith the ser#ices they 1et7
In rural area the access to ser#ices is also a !ro)lem7
Some of the state 1o#ernments ha#e to su)sidiAe the scheme hea#ily e#en thou1h the
SI Cor!oration8 ,hich is the financial arm of the system8 has much sur!lus funds7 /ll
these !ro)lems indicate an ur1ent need for reforms in the SI scheme $Eora8 2444%7
Some of the o!tions for reforms in SI scheme could )e? makin1 the scheme autonomous-
mana1ed )y ,orkers and em!loyers ,hile 1o#ernment only retails controls throu1h a 1uidin1
frame,ork as is the case ,ith "erman Sickness +unds7 Secondly the scheme should )e made
o!en for non-or1aniAed sector throu1h fi2ed income )ased contri)ution7 .his ,ill e2tend the
)enefits of the scheme to many more !eo!le7 .he 1o#ernment should set the !atient care
standards and monitor outcomes as ,ell as !atient satisfaction7 .he mana1ement of the health
23
facilities also needs to )e im!ro#ed su)stantially7 .he financial mana1ement of the scheme
also needs im!ro#ement7
Central %o&ernment Health Scheme 'C%HS(
Since 19348 all em!loyees of the Central "o#ernment $!resent and retired%D some
autonomous and semi- 1o#ernment or1aniAations8 M*s8 9ud1es8 freedom fi1hters and
9ournalists are co#ered under the Central "o#ernment Health Scheme $C"HS%7 .his scheme
,as desi1ned to re!lace the cum)ersome and e2!ensi#e system of reim)ursements $"'I8
1994%7 It aims at !ro#idin1 com!rehensi#e medical care to the Central "o#ernment
em!loyees and the )enefits offered include all out!atient facilities8 and !re#enti#e and
!romoti#e care in dis!ensaries7 In!atient facilities in 1o#ernment hos!itals and a!!ro#ed
!ri#ate hos!itals are also co#ered7 .his scheme is mainly funded throu1h Central
"o#ernment funds8 ,ith !remiums ran1in1 from :s 13 to :s 134 !er month )ased on salary
scales7 .he co#era1e of this scheme has 1ro,n su)stantially ,ith !ro#ision for the non-
allo!athic systems of medicine as ,ell as for allo!athy7 Beneficiaries at this moment are
around 432 4448 s!read across 22 cities7
.he C"HS has )een criticiAed from the !oint of #ie, of =uality and accessi)ility7
Su)scri)ers ha#e com!lained of hi1h out-of-!ocket e2!enses due to slo, reim)ursement and
incom!lete co#era1e for !ri#ate health care $as only 54F of cost is reim)ursed if referral is
made to !ri#ate facility ,hen such facilities are not a#aila)le ,ith the C"HS%7
)able =" Public insurance schemes
SIS $m!loyees State C"HS $Central "o#ernment
Insurance Scheme% Health Scheme%
Contri)ution m!loyees? 47-3F of ,a1es7 *ay(!ension Contri)ution
m!loyers? 17-3F of ,a1es7 $:s(month% $:s(month%
/ll contri)utions are de!osited K38444 13
)y the em!loyer7 3441@6444 44
State 1o#ernments contri)ute a 64441@14444 -4
minimum of 1273 Fon SIS 14441@13444 144
e2!enditures in their H13444 134
res!ecti#e States $"ar1 1999)8 .he )ulk of resources $53F%
24
!7 34%7 See also section 39/ $"o#t7 of India8
199918 !!7 31-32%
:eim)ursement Boes not allo, reim)ursement of medical
treatment outside of allotted facilities7 +or
e2am!le8 the m!loyees State Insurance /ct
1945 states that entitlement to medical )enefits
does not entitle the insured to
Mclaim reim )ursement for medical treatment
e2ce!t under re1ulations0 $"o#t7 of
India8 199918 !7 34% and SI $"eneral%
:e1ulations8 $"o#t7 of India8 199918 !7 136%
ntitlement Be!endin1 on Mallotment0 as !er the SI /ct
177'utt!attiientt mediicall carre att
diis!ensarriies orr !anell clliiniics88
2. Consultation ,ith s!ecialist and su!!ly of
s!ecial medicines and tests in addition to
out!atient careD
3. Hos!italiAation8 s!ecialists8 dru1s and s!ecial
diet7
4. Cash )enefits? *eriodical !ayments to
any insured !erson in case of sickness8
!re1nancy8 disa)lement or
2
come from 1eneral re#enues of the Central
"o#ernment $"ar1 1999)8 !7 34%
1. :eim)ursement of consultation fee8 for u!
to four consultations in a total s!ell of ten days
$on referral%
2. Cost of medicines7
3. Char1es for a ma2imum of ten in9ections7
:eim)ursement for s!ecified diseases or
ailments7
1. +irst- le#el consultation and !re#enti#e
health care ser#ice throu1h dis!ensaries and
hos!itals under the scheme
2. Consultation at a C"HS dis!ensary (
!olyclinic or C"HS ,in1 at a reco1niAed
hos!ital7
3. .reatment from a s!ecialist throu1h
referral8 emer1ency treatment in !ri#ate
hos!itals and outside India7
death resultin1 from an
em!loyment in9ury7
li1i)ility m!loyees $and de!endants% m!loyees of the Central
,orkin1 in esta)lishments "o#ernment $e2ce!tin1
em!loyin1 ten or more !ersons rail,ays8 /rmed +orces
$,ith !o,er% or t,enty or !ensioners and Belhi
more !ersons $,ithout !o,er% /dministration%8 !ensioners8
and earnin1 less than :s7 6 ,ido,s of Central
344 !er month7 $"ar1 1999a8 "o#ernment em!loyees8
!753% Belhi *olice em!loyees8
Befence em!loyees and
de!endants residin1 in 24
s!ecified locations $See
"o#t7 of India8 #arious
!u)lications%
)%OS * Community#$ased Health Insurance
Community-)ased funds refer to schemes ,here mem)ers !re!ay a set amount each year
for s!ecified ser#ices7 .he !remia are usually flat rate $not income-related% and therefore
not !ro1ressi#e7 Makin1 !rofit is not the !ur!ose of these funds8 )ut rather im!ro#in1 access
to ser#ices7 'ften there is a !ro)lem ,ith ad#erse selection )ecause of a lar1e num)er of
hi1h-risk mem)ers8 since !remiums are not )ased on assessment of indi#idual risk status7
2em!tions may )e ado!ted as a means of assistin1 the !oor8 )ut this ,ill also ha#e ad#erse
effect on the a)ility of the insurance fund to meet the cost of )enefits7
Community-)ased schemes are ty!ically tar1eted at !oorer !o!ulations li#in1 in communities8 in
,hich they are in#ol#ed in definin1 contri)ution le#el and collectin1 mechanisms8 definin1 the
content of the )enefit !acka1e8 and ( or allocatin1 the schemes8 financial resources $Such
schemes are 1enerally run )y trust hos!itals or non1o#ernmental or1aniAations $&"'s%7 .he
)enefits offered are mainly in terms of !re#enti#e care8 thou1h am)ulatory and in-!atient care is
also co#ered7 Such schemes tend to )e financed throu1h !atient collection8 1o#ernment 1rants
and donations7 Increasin1ly in India8 CBHI schemes are ne1otiatin1 ,ith the for !rofit insurers
for the !urchase of custom desi1ned 1rou! insurance
26
!olicies7 Ho,e#er8 the co#era1e of such schemes is lo,8 co#erin1 a)out 34-34 million
indicates that many community-)ased insurance schemes suffer from !oor desi1n and
mana1ement8 fail to include the !oorest-of-the !oor8 ha#e lo, mem)ershi! and re=uire
e2tensi#e financial su!!ort7 'ther issues relate to sustaina)ility and re!lication of such
schemes7 / com!arison of #arious health insurance schemes ) y &"'s is 1i#en )elo, in
ta)le 97
)able 3" @onprofit social insurance schemes in India
@ame Location $embe rs )ype of
Insurance
17 /CC':B( .amil &adu $"udalur% - 336 Health Insurance
/SH>I&I Health $199-% $,ith &I/%
Insurance Scheme
27 /1a Jhan Health "u9arat $Sidh!ur% 44 444 Health insurance
Ser#ices3 $199-%
37 /!ollo Hos!ital .amil &adu $Madras% 14 444 Health Insurance
/ssociation $/H/% $1993% $,ith "IC%
47 /SS+/ .amil &adu $Madurai% &7&7 Cattle Insurance
$/ssociation of Sar#a Health Insurance
Se,a +arms%
37 Coo!erati#e /ndhra *radesh 26 444 Beath :elief +und
Be#elo!ment $Hydera)ad% $6ife Insurance%
+ederation $CB+%
67 "oal!ara >est Ben1al 1 24- Health Insurance
Coo!erati#e Health $Shantiniketan% $199-%
Society
-7 Jottar Social .amil &adu 34 444 Health Insurance
Ser#ice Society $Janyakumari%
$JSSS%
57 Mallur Health Jarnataka - 444 Health Insurance
Coo!erati#e
97 Mathadi Hos!ital Maharashtra 134 444 Health Insurance
27
.rust $Bom)ay(Mum)ai%
147 Medino#a Health >est Ben1al $Calcutta% 33 444 Health Insurance
Card Scheme
117 &a#sara9an .rust "u9arat 14 444 Health Insurance
$,ith &I/%
/ccidental
Insurance $,ith
6IC%
&utrition
6e1al /id
Bru1s
+i1ht /1ainst
Corru!tion
127 &e, 6ife .amil &adu &7&7 Health Insurance
137 'r1aniAation for .amil &adu $Mysore% 1 13- Health Insurance
Be#elo!ment of /ccidental
*eo!le $'B*% Insurance $,ith
&IC%
147 *ra1ati .hrift and @ 414 Beath :elief +und
Credit Society
137 :ai1arh Madhya *radesh -3 444 Health Insurance
/m)ika!ur Health $:ai1arh Bistrict%
/ssociation $:/H/%
Medical Insurance
Scheme
167 Saheed >est Ben1al 6 544 Health Insurance
Shi)sankar Sa)a $Burd,an%
Samity $SSSS%
1-7 Se)a Coo!erati#e >est Ben1al $Calcutta% 3 444 Health Insurance
Health Society families $,ith "IC%
157 Self m!loyed "u9arat $/hmeda)ad% 448444 Inte1rated
>omen0s /ssociation Insurance Scheme
2!
$S>/% Health Insurance
6ife Insurance
$,ith 6IC%
/ccident $,ith
&I/%
/sset Insurance
Maternity Benefit
197 Jastur)a Hos!ital Maharashtra $>ardha 19 43- Health Insurance
Scheme8 Se,a1ram Bistrict% $199-%
247 Social >ork and :a9asthan $/9mer% 24 444 Health Insurance
:esearch Centre
$S>:C% $defunctL%
217 Society for Maharashtra 1 244 Health Insurance
*romotion of /rea $Bom)ay(Mum)ai% cou!les /ccident
:esources Centre Housin1$,ith
$S*/:C% 'IC%
227 Students Health >est Ben1al $Calcutta% 334 444 Health Insurance
Home
237 .ri)hu#andas "u9arat $/nand% 544 444 Health Insurance
+oundation
247 .ri#andrum Jerala Craft C "ear
Bistrict +ishermen0s $.hiru#anantha!uram% +und $loan )asis%
+ederation $.B++% Contin1ency +und
$death8 accidents8
loss of ,ork%
237 <rmal :ural :a9asthan $Bikaner C &7&7 Health Insurance
Health and :esearch Nodh!ur%
Be#elo!ment .rust
$defunctL%
267 Eoluntary Health .amil &adu 164 444 Health Insurance
Ser#ices Medical /id
*lan
2"
,ource: *atrick Jrause $2444%8 M&on-!rofit Insurance Schemes for the
<nor1aniAed Sector in India08 Social *olicy Bi#ision 428 >orkin1 *a!ers
&o7 22 e8 ".O
Some e2am!les of community-)ased health insurance schemes are discussed herein7
,elf-1mployed Women4s Association /,1WA05 "u9arat? .his scheme esta)lished in
19928 !ro#ides health8 life and assets insurance to ,omen ,orkin1 in the informal
sector and their families7 .he enrolment in the year 2442 ,as 93 4447 .his scheme
o!erates in colla)oration ,ith the &ational Insurance Com!any $&IC%7 <nder
S>/0s most !o!ular !olicy8 a !remium of :s 53 !er indi#idual is !aid )y the
,oman for life8 health and assets insurance7 /t an additional !ayment o f :s 338 her
hus)and too can )e co#ered7 :s 24 !er mem)er is then !aid to the &ational Insurance
Com!any $&IC% ,hich !ro#ides co#era1e to a ma2imum of :s 2 444 !er !erson !er
year for hos!italiAation7 /fter )ein1 hos!italiAed at a hos!ital of one0s choice $!u)lic
or !ri#ate%8 the insurance claim is su)mitted to S>/7 .he res!onsi)ility for
enrolment of mem)ers8 for !rocessin1 and a!!ro#in1 of claims rests ,ith S>/7 &IC
in turn recei#es !remiums from S>/ annually and !ays them a lum!sum on a
monthly )asis for all claims reim)ursed7 $:anson J C /charya /8 2443%7
/nother CBHI scheme located in "u9arat is that run )y the Tribhu!andas
6oundation /T605 /nand7 .his ,as esta)lished in 24418 ,ith the mem)ershi!
)ein1 restricted to mem)ers of the /M<6 Bairy Coo!erati#es7 Since then8 o#er 1
44 444 households ha#e )een enrolled under this scheme8 ,ith the .+ functionin1
as a third !arty insurer7
The -allur -il. Cooperati!e in Jarnataka esta)lished a CBHI scheme in 19-37
It co#ers - 444 !eo!le in three #illa1es and out!atient and in!atient health care are
directly !ro#ided7
/ similar scheme ,as esta)lished in 19-2 at ,e(agram5 >ardha in Maharashtra7 .his
scheme co#ers a)out 14 394 !eo!le in 12 #illa1es and mem)ers are !ro#ided ,ith
out!atient and in!atient care directly )y Se,a1ram7
30
The Action for Community Organi2ation5 7ehabilitation and e!elopment
/ACCO705 &il1iris8 .amil &adu ,as esta)lished in 19917 /round 13 444 /di#asis
$tri)als% are co#ered under a 1rou! !olicy !urchased from &e, India /ssurance7
/nother scheme located in .amil &adu is Jadamalai 8alanjia 9attara ,angam
/889,05 Madurai7 .his ,as esta)lished in 2444 and co#ers mem)ers of ,omen0s
self-hel! 1rou!s and their families7 Its enrolment in 2442 ,as around 3 -148 ,ith
the JJES functionin1 as a third !arty insurer7
The 9oluntary +ealth ,er!ices /9+,05 Chennai8 .amil &adu ,as esta)lished in
19637 It offers slidin1 !remium ,ith free care to the !oorest7 .he )enefits include
discounted rates on )oth out!atient and in!atient care8 ,ith the EHS functionin1
as )oth insurer and health care !ro#ider7 In 19938 its mem)ershi! ,as 124 -137
Ho,e#er8 this scheme suffers from lo, le#els of cost reco#ery due to !ro)lems of
ad#erse selection7
7aigarh Ambi.apur +ealth Association /7A+A05 Chhatis1arh ,as esta)lished in
19-28 and functions as a third !arty administrator7 Its mem)ershi! in the year 1993
,as -2 4447
Health Insurance Initiati&es by State %o&ernments
In the recent !ast8 #arious state 1o#ernments ha#e )e1un health insurance initiati#es7 +or
instance8 the /ndhra *radesh 1o#ernment is im!lementin1 the /aro1ya :aksha Scheme since
24448 ,ith a #ie, to increase the utiliAation of !ermanent methods of family !lannin1 )y
co#erin1 the health risks of the acce!tors7 /ll !eo!le li#in1 )elo, the !o#erty line and those
,ho acce!t !ermanent methods of family !lannin1 are eli1i)le to )e co#ered under this
scheme7 .he "o#ernment of /ndhra *radesh !ays a !remium of :s -3 !er acce!tor7 .he
)enefits to )e a#ailed of8 include hos!italiAation costs u! to :s7 4444 !er year for the
acce!tor and for his ( her t,o children for a total !eriod of fi#e years from date of the family
!lannin1 o!eration7 .he co#era1e is for common illnesses and accident insurance )enefits are
also offered7 .he hos!ital )ill is directly reim)ursed )y the Insurance Co m!any8 namely the
&e, India /ssurance Com!any7
31
.he "o#ernment of "oa alon1 ,ith the &e, India /ssurance Com!any in 1955 de#elo!ed a
medical reim)ursement mechanism7 .his scheme can )e a#ailed )y all !ermanent residents of
"oa ,ith an income )elo, :s 34 444 !er annum for hos!italiAation care8 ,hich is not
a#aila)le ,ithin the 1o#ernment system7 .he non-a#aila)ility of ser#ices re=uires
certification from the hos!ital Bean or Birector Health Ser#ices7 .he o#erall limit is :s 34
444 for the insured !erson for a !eriod of one year7
/ !ilot !ro9ect on health insurance ,as launched )y the "o#ernment of Jarnataka and the
<&B* in t,o )locks since 'cto)er 24427 .he aim of the !ro9ect ,as to de#elo! and test a
model of community health financin1 suited for rural community8 there)y increasin1 the
access to medical care of the !oor7 .he )eneficiaries include the entire !o!ulation of these
)locks7 .he !remium is :s 34 !er !erson !er year8 ,ith the "o#ernment of Jarnataka
su)sidiAin1 the !remium of those )elo, !o#erty line and those )elon1in1 to Scheduled
Castes( Scheduled .ri)es7 .his !remium entitles them to hos!italiAation co#era1e in the
1o#ernment hos!itals u! to a ma2imum of :s 2 344 !er year8 includin1 hos!italiAation for
common illnesses8 am)ulance char1es8 loss of ,a1es at :s7 34 !er day as ,ell as dru1
e2!enses at :s 34 !er day7 :eim)ursements are made to an insurance fund ,hich has )een
set u! )y the &"' ( *:I ,ith the su!!ort of <&B*7
.he "o#ernment of Jerala is !lannin1 to launch a !ilot !ro9ect of health insurance for the
34F families li#in1 )elo, the !o#erty line7 .he scheme ,ould )e associated ,ith a
1o#ernment insurance com!any7 Currently8 ne1otiations are under ,ay ,ith the I:/ to seek
ser#ice ta2 e2em!tion7 .he !ro!osed !remium is :s 234 !lus 3F ta27 .he ma2imum )enefit
!er family ,ould )e :s 24 4447 .he amount for the !remium ,ould )e reco#ered from the
dru1 )ud1et $:s 144%8 the *:I $:s 144% and from the )eneficiary $:s 62734% ,hile the
)enefits a#aila)le ,ould include co#er for hos!italiAation8 deli#eries in#ol#in1 sur1ical
!rocedures $either to the mother or the ne,)orn%7 Instead of !ayment )y the )eneficiary8
Smart Card facility ,ould )e offered7 .his scheme ,ould )e a!!lica)le in 216 1o#ernment
hos!itals7
Health Insurance Policy
/ health insurance !olicy is a contract )et,een an insurer and an indi#idual or a
1rou!8 in ,hich the insurer a1rees to !ro#ide s!ecified health insurance at an a1reed-u!on
32
!rice the !remium7 Be!endin1 on the !olicy8 the !remium may )e !aya)le either in a lum!
sum or in installments7 Health insurance usually !ro#ides either direct !ayment or
reim)ursements for e2!enses associated ,ith illnesses and in9uries7
1 Cost
.he cost and ran1e of !rotection !ro#ided )y the health insurance ,ill de!end on the
insurance !ro#ider and the !articular !olicy !urchased7 .hese days8 most com!anies 1i#e the
)enefit of health insurance to the em!loyees7 Ho,e#er8 in case your em!loyer does not offer
a health insurance !lan8 it is ad#isa)le to o!t for a health insurance scheme7
1 Aho can a'ail the PolicyB
Health insurance can )e a#ailed )y !eo!le a1ed )et,een fi#e and se#enty fi#e $.he
u!!er and lo,er a1e limits may #ary sli1htly de!endin1 on the !olicy%7 .he health insurance
scheme could either )e a !ersonal scheme or a 1rou! scheme s!onsored )y your em!loyer7
1 Ahat it co'ersB
In antici!ation of une2!ected e#ents that create the need for medical 1oods and
ser#ices8 the health insurance does not co#er certain ailments7 It does not co#er ailments
in the first year after the !olicy is taken7 It co#ers hos!italiAation char1es for?
o Heart attacks
o Strokes
o *rolon1ed illnesses
o 6oss of lim)8 eye8 or other !arts of the )ody due to accident
o In9uries
o Maternity e2!enses
15 Medicines
2 Points to be .no&n
;ou should understand the !olicy8 and )ecome familiar ,ith common health insurance
!ro#isions8 includin1 limitations8 e2clusions8 and riders7 It is #ery im!ortant to kno, ,hat
your !olicy co#ers and ,hat you ha#e to !ay yourself7 Health Insurance !olicies 1enerally
co#er )oardin18 nursin1 and dia1nostic e2!enses8 ,hich include room rent char1ed at the
33
hos!ital or nursin1 home8 fees of the sur1eon8 anesthetist8 doctor8 etc7 Some !olicies e#en
offer fi2ed cash amount for each day you stay at any hos!ital for treatment7 If you ha#e a
!ersistent health !ro)lem and then decide to take insurance8 it mi1ht not )e co#ered7
2!enses on hos!italiAation8 incurred in the first 34 days after takin1 a !olicy are also not
entitled8 e2ce!t in case of an in9ury from accident7 .reatment of certain diseases is not
co#ered durin1 the first year of your !olicy7 .he list of diseases may #ary form one health
!olicy to another7
Claims Settle ment Procedures
Claim settlement is one of the most im!ortant tasks of any insurance com!any7 *ro!er
settlement of claims re=uires a sound kno,led1e of the la,8 !rinci!les and !ractices
1o#ernin1 insurance contracts and in !articular8 a thorou1h kno,led1e of the terms and
conditions of the standard !olicies and #arious e2tensions and modifica tions there under7
.he !rocedure in res!ect of claims under #arious classes of insurance follo,s a common
!attern and may )e considered under three )road headin1s?
1. *reliminary
2. In#esti1ation
3. Settlement7
.he follo,in1 is the 1eneral !rocedure follo,ed in settlement of any kind of
insurance claims?
I" @otice of Loss
It is most essential that early notification of the loss )e recei#ed )y the insurer as !er the
time limits !ro#ided for in the !olicy document7 Belay ,ould ad#ersely affect the insurer0s
!osition7 .herefore8 non- fulfillment of this !ro#ision in insurance a1reement ,ill relie#e the
lia)ility of insurer if the non-com!liance materially affects the insurer0s !osition7 Ho,e#er8
,hether there is delay in notification or not8 this is ultimately decided )y the Court of 6a, is
case of any dis!ute de!endin1 on the indi#idual case and facts7
34
In case of health insurance it is essential that the !olicy holder if falls sick should
notify the insurer and the /1ent(Broker immediately $,ithin 24 hours time% after the
admission into the Hos!ital 1i#in1 as many details as !ossi)le of the disease(sym!toms8
the treatin1 Boctor8 the address of the Hos!ital for electi#e admissions7
In case of emer1encies8 the intimation or notice of ill health and other !articulars may )e sent
,ithin reasona)le time not e2ceedin1 one ,eek7
.he a)o#e intimations( notices are mandatory re=uirements for claimin1 reim)ursement
under the "IC norms7 .hese !rocedures may #ary from insurer to insurer de!endin1 on
the nature of the contract7
II" Procedure
.he insurer ,ill check the follo,in1 on recei!t of intimation of loss or dama1e from
the insured7
1. nforcement of the !olicy on the date of occurrence of the loss or dama1eD
2. :ecei!t of the notice of loss ,ithin the sti!ulated time !eriod as mentioned in the
!olicy document7
3. 6oss or dama1e )y a !eril8 ,hich is co#ered under the insurance !olicy7
'nce the a)o#e #erification is made8 the loss is allotted a num)er and entered in the Claims
:e1ister7 / se!arate file is o!ened for the claim ,ith a co!y of the !olicy8 or rele#ant e2tracts
thereof filed ,ith the claim !a!ers7 .hereafter8 a claim form is issued to the insured7
III" Claim Forms
ach class of insurance ,ill ha#e different contents in its claim form7 In 1eneral8 the claim
form is desi1ned to elicit full information re1ardin1 the circumstances of the loss8 such as
date of loss8 time8 cause of loss8 e2tent of loss7 .his information is necessary to enforce
contri)ution and su)ro1ation7
In health insurance8 the insured should su)mit the duly filled in !rescri)ed claim form
to the insurer alon1 ,ith all the !ertinent documents in ori1inal #iA78 ori1inal dischar1e
summary( death summary8 ori1inal )ills of hos!italiAation !ayments etc78 all the in#esti1ation
3
re!orts in ori1inal includin1 films of P- ray8 C"8 C. Scan8 M:I etc7 .hese are a1ain the
mandatory re=uirements for claimin1 reim)ursement ,hich should )e done ,ithin se#en $-%
days from the date of dischar1e from the Hos!ital7
IC" 7ssessment of Loss
'n recei!t of the duly filled in claim form from the insured8 the insurer decide a)out
in#esti1ation and assessment of the loss7 If the loss is small8 the in#esti1ation to determine the
cause and e2tend of loss is done )y an 'fficer of the insurer7 In#esti1ation of lar1e8
com!licated claims is entrusted to inde!endent !rofessional sur#eyors7 Sometimes it may )e
,ai#ed and the loss settled on the )asis of the claim form and e#idences !ro#ided7 In case of
an a!!ointment of a sur#eyor8 the sur#eyor is !ro#ided ,ith all the rele#ant information
!ertainin1 to the claim7 .he intimation of a!!ointment of Sur#eyor ,ill )e sent to the insured7
C" Sur'eyors and Loss 7ssessors
<nder Insurance /ct8 e#ery insurer8 in res!ect of a loss ,hich has occurred in India and
re=uirin1 to )e !aid or settled in India e=ual to or e2ceedin1 :s7248 444 on any !olicy of
insurance shall )e admitted and settled only after a re!ort on the loss from a !erson ,ho
holds a license to act as a sur#eyor7
In case of *ersonal /ccident claims8 the insured is re=uired to su)mit a re!ort from the
attendin1 doctor s!ecifyin1 the cause of accident or the nature of illness as the case may
)e and the duration of disa)lement7 Be!endin1 on the conditions laid out in the !olicy8 the
insurer reser#es the ri1ht to arran1e for an inde!endent medical e2a mination7
.hird *arty claims in#ol#in1 !ersonal in9uries are assessed on the )asis of medical o!inion of
a medical !ractitioner7
CI" Claims 9ocume nts
+or the !ur!ose of !ro#idin1 further e#idence and to su)stantiate the claim8 the insured
needs to su)mit documents other than claim form and sur#eyor re!ort7 .hese documents
include !olice re!ort and !ost mortem re!ort in case of a !ersonal accident !olicy claim etc7
36
CII" Final Settlement
'nce the a)o#e formalities are fulfilled8 the claim is !rocessed on the follo,in1 )asis?
Claim form
Inde!endent sur#eyors re!ort8 medical o!inion etc
Earious su!!orti#e documents furnished )y the insured and
/ny other e#idence secured )y the insurer7
If the claim is in order8 settlement is made )y !ayment in the form of a crossed che=ue in
fa#or of the insured7 .he !ayment is entered in the claims re1ister and in the rele#ant !olicy
record7 If there is any com!any- insurance8 a!!ro!riate reco#eries are made from the
com!any-insurer7
CIII" 9ischarge Coucher
Be!endin1 on the !olicy8 a dischar1e #oucher is e2ecuted )y the insured certifyin1 the
amount recei#ed from the insured and other !articulars of his full and final claim
settlement ,hich dischar1es the insurer form any further o)li1ations on the !olicy7
Procedure +ollo,ed in Settlement of Claims
$ediclaim
Mediclaim insurance is a co#er ,hich takes care of medical e2!enses follo,in1
hos!italiAation ( domiciliary hos!italiAation of the insured in the follo,in1 situations?
Sudden illness
/ccident or sur1ery re=uired in res!ect of any disease ,hich has arisen durin1
the !olicy !eriod7
Claim,
.he claim is !aya)le ,hen treatment is 1i#en to the insured from a re1istered hos!ital or
nursin1 home7 Ho,e#er8 in the case of non-re1istered hos!ital or nursin1 home the treatment
can )e co#ered under the !olicy su)9ect to hos!ital(nursin1 home on conformation of the
follo,in1?
37
.he hos!ital(nursin1 home should ha#e 13 in!atient )eds
It should ha#e =ualified nursin1 staff round the clock
Qualified doctors round the clock
+ully e=ui!!ed o!eration theatre
.he #ery !ur!ose of Mediclaim !olicy is to !ro#ide reim)ursement in res!ect of
treatment taken in the hos!ital ( nursin1 home8 the !olicy also !ro#ides reim)ursement in
res!ect of domiciliary hos!italiAation $treatment taken at home%7
Ho,e#er8 for a claim su)mitted for domiciliary hos!italiAation the follo,in1
conditions should )e satisfied?
Medical treatment should )e for more than 3 days7
.he treatment should )e such for an illness(disease(in9ury ,hich in the normal
course ,ould re=uire treatment and care in the hos!ital(nursin1 home )ut actually
taken ,hilst confined at home due to any of the follo,in1 circumstances?
1. Condition of the !atient is such that he(she cannot )e mo#ed to the
hos!ital(nursin1 home or
2. .he !atient cannot )e mo#ed to hos!ital(nursin1 home for lack of
accommodation there in7
In the instance of death of the !atient8 the insurance com!any ,ill insist u!on
a succession certificate from a court of la, for dis)ursin1 the claim amount in
the name of the nominee7 In case of any dis!ute8 the insurer can de!osit the
claim amount in the court for dis)ursement to ne2t le1al heirs of the !olicy
holder7
Claim +orms
Claim form is a fundamental document ,hich is the )asis for the settlement of a claim on any
insurance !olicy7 .he o)9ecti#e of a claim form is to !ro#ide the rele#ant information
re=uired )y the insurer to facilitate the !rocess of decision- makin1 in a !olicy claim
settlement7
3!
ach class of insurance ,ill ha#e different contents in its claim form7 In 1eneral8 the claim
form is desi1ned to elicit full information re1ardin1 the circumstances of the loss8 such as
date of loss8 time8 cause of loss8 e2tent of loss7
.he other =uestions #ary from one class of insurance to another7 If the insurance is su)9ect to
M!ro-rata a#era1e08 a =uestion is asked on the #alues of the !ro!erty at the time of loss7
In those classes of !olicies8 ,hich are contracts of indemnity8 a =uestion is asked to ascertain
the other !olicies held )y the insured co#erin1 the same su)9ect matter and ,hether a ny
third !arty ,as res!onsi)le for the loss7 .his information is necessary to enforce
contri)ution and su)ro1ation7
Sim!le fillin1 and su)mittin1 a claim form does not constitute an admission of lia)ility )y
the insurer7 /ll the corres!ondence sent )y insurer in this re1ard are also sent M,ithout
!re9udice0 to their ri1hts7 .o this effect in e#ery claim form insurer ,ill make it a !oint to
!rint the a)o#e in )old ,ords7
Group $ediclaim Policy Form
CL7I$ FD-$ FD- G-DUP $%9ICL7I$ PDLICE
$.he issue of this form is not to )e taken as an /dmission of 6ia)ility%
*lease 1i#e the follo,in1 information correctly and com!letely7
Claim &o7 RRRRRRRRRRRRRRRRR
*" @ame of the Insured
$i% &ame of the Insured m!loyee
$ii% Salary :oll &o7
$iii% - mail id - mail id
$i#% *olicy &o7
0" Betails of the Insured *erson in res!ect
of ,hom claim is made?
$i% If family mem)er8 name C relationshi!
to the insured em!loyee?
3"
$ii% *resent com!leted a1e
$iii% 'ccu!ation?
$i#% :esidential address
5" &ature of disease ( illness contracted
or in9ury suffered?
;" Bate of in9ury sustained or disease ( illness
first detected
8"$i% &ame and address of the hos!ital ( &ursin1
Home ( Clinic
$ii% Bate of admission
$iii% Bate of dischar1e?
6"$i% /mount of *re and *ost Hos!italisation
2!enses incurred
$ii% .otal /mount Claimed
1" If the claim is for domiciliary
hos!italiAation8 !lease indicate?
$i% Bate of commencement of treatment
$ii% Bate of com!letion of treatment
$iii% &ame C address of attendin1 Medical
$i#% !ractitioner
$#% Qualification
.ele!hone &o7
In su!!ort of the a)o#e claim8 I enclose follo,in1 documents S*lease indicate )y $ T %U
1. Bills8 :ecei!t and Bischar1e Certificate ( card from the Hos!ital(&ursin1 Home7
2. Cash memos from the Hos!ital ( Chemist$s%8 su!!orted )y the !ro!er !rescri!tion7
40
3. :ecei!t and *atholo1ical test re!orts from a *atholo1ist su!!orted )y the note from
the attendin1 Medical *ractitioner ( Sur1eon demandin1 such *atholo1ical tests7
4. Sur1eons certificate statin1 nature of o!eration !erformed and sur1eon0s )ill and
recei!t7
5. /ttendin1 Boctor0s ( Consultant0s ( S!ecialist0s ( /nesthetist0s )ill and recei!t and
certificate re1ardin1 dia1nosis8 ,hiche#er is !rescri)ed C there)y e2!enses incurred7
9eclaration
I here )y a1ree8 affirm and declare that?
1. .he statements(information 1i#en(stated )y me(us in this claim form are true8
correct and com!lete7
2. &o material information ,hich is rele#ant to the !rocessin1 of the claim or ,hich
in any manner has a )earin1 on the claim has )een ,ithheld or not disclosed7
3. If I ha#e 1i#en(made any false or fraudulent statement(information8 or su!!ressed or
concealed or in any manner failed to disclose material information8 the !olicy shall )e
#oid and that I shall not )e entitled to all(any ri1hts to reco#er thereunder in res!ect
of any or all claims8 !ast8 !resent or future7
4. .he recei!t of this claim form(other su!!ortin1(related documents does not
constitute or )e deemed to constitute an a1reement )y the Com!any of the claim and
the Com!any reser#es the ri1ht to !rocess or re9ect or re=uire further(additional
information in res!ect of the claim7
In case of $aternity Benefits %xtension
I here)y declare that at the time of deli#ery co#ered )y this claim8 I did not ha#e more than
t,o li#in1 children7 I here)y ,arrant the truth of fore1oin1 !articulars in e#ery res!ect and
I a1ree that if I ha#e made or shall make any false or untrue statements8 su!!ression or
concealment8 my ri1ht to claim reim)ursement of the said e2!enses shall )e a)solutely
forfeited not,ithstandin1 any other action that the Com!any may take a1ainst me under the
41
rules7 I further declare that in res!ect of the a)o#e treatment8 no )enefits are admissi)le
under any other Medical Scheme or insurance7
In case of -eimbursement of Cost of (ealth Chec.Up %xtension
I confirm that no claim has )een made )y my family mem)ers or me for the !ast 4 !olicy
!eriods nor any claim is !ro!osed to )e lod1ed for the said !eriod7
Place,
9ate, Signature of Insured
%mployee
Im!ortant?
Since it is a !re-re=uisite for admission of claims under the !olicy that the Hos!ital ( &ursin1
Home ( Clinic ,here the Insured *erson ,as admitted8 is re1istered ,ith 6ocal /uthorities8
it is necessary for the claimant to ensure that the Hos!ital ( &ursin1 Home ( Clinic indicates
the same on the Bill-cum-:ecei!t issued )y them7
$.o )e filled in )y the m!loyer(Insured%
>as the in9ured !erson in res!ect of ,hom claims )ein1 made ;es(&o
a)sent from ,orkL
If so8 !lease furnish the details of such a)sence
I ( >e here)y declare that the !articulars made )y the in9ured !erson in the claim from are
true to the )est of our kno,led1e and )elief7
Place ,
9ate , Signature of the Insured
42
Third party administrators 'TP-.S(
.he health infrastructure in India is facin1 challen1e of meetin1 the health 1oals and
com!le2ities emer1in1 from the chan1in1 disease !attern7 .he !roliferation of #arious
healthcare technolo1ies and increase in cost of care has necessitated the e2!loration of health
financin1 o!tions to mana1e !ro)lems arisin1 out of increasin1 healthcare costs7 Health
insurance is emer1in1 fast as an im!ortant mechanism to finance the healthcare needs of
!eo!le7 +urther8 the uncertainty of disease or illness is accentuatin1 the need for insurance
system that ,orks on the )asic !rinci!le of !oolin1 of risks of une2!ected costs of !ersons
fallin1 ill and needin1 hos!italiAation )y char1in1 !remium from a ,ider !o!ulation )ase of
the same community7 Ho,e#er8 the com!le2ity of health insurance industry has )een much
talked a)out )ut less understood8 es!ecially in Indian scenario7 >ith the ad#ent of .hird *arty
/dministrators $.*/s% this sector has assumed a ne, dimension7 .*/s are !resumed to
infuse ne, mana1ement system and enrich kno,led1e )ase of mana1in1 healthcare ser#ices
and costs7 .heir !resence is aimed at ensurin1 hi1her efficiency8 standardiAation and
im!ro#in1 !enetration of health insurance in the country7 .*/s !otentially ha#e a ,ider role
to !lay in standardiAation of char1es and mana1in1 cash- less ser#ices in health insurance7
.here are =uestions that in ,hat ,ays the .*/ is 1oin1 to influence the de#elo!ments in the
health sector7 .he influence of .*/s to a lar1e e2tent ,ould )e determined )y their acti#ities8
the ,ay they or1aniAe their ser#ices and their re#enue 1eneration model7 In !resent form8
.*/s earn their ma9or re#enue from fees char1ed as commission on insurance !remium7
Insurance :e1ulatory and Be#elo!ment /uthority $I:B/%8 the re1ulatory )ody for insurance
sector in India has standardiAed this rate7 Besides this8 .*/s ha#e a !otential source of
re#enue from )enefit mana1ement8 medical mana1ement8 !ro#ider net,ork mana1ement8
claim administration and information and data mana1ement7 Ho,e#er8 the insurance sector
still faces challen1e of institutionaliAin1 the .*/ ser#ices and there is su)stantial sco!e for
im!ro#ements7
.hird *arty /dministrator $.*/% ,as introduced throu1h the notification on .*/-
Health Ser#ices :e1ulations8 2441 )y the I:B/7 .heir )asic role is to function as an
intermediary )et,een the insurer and the insured and facilitate the cash- less ser#ice of
insurance7 +or this ser#ice they are !aid a fi2ed !er cent of insurance !remium as
commission7 .his commission is currently fi2ed at 376 !er cent of !remium amount7
.he core !roduct or ser#ice of a .*/ is ensurin1 cashless hos!italiAation to !olicyholders7
Intermediation )y .*/s ensures that !olicyholders 1et hassle-free ser#ices8 insurance
com!anies !ay for efficient and cost-efficient ser#ices8 and healthcare !ro#iders 1et their
43
reim)ursement on time7 By doin1 this it is e2!ected that .*/s ,ould de#elo! a!!ro!riate
systems and mana1ement structures aimin1 at controllin1 costs8 de#elo!in1 !rotocols to
minimiAe unnecessary treatments(in#esti1ations8 im!ro#e =uality of ser#ices and ultimately
lead to lo,er insurance !remiums7
'*:/.I'&S '+ .H .*/?
.he entire o!eration of the .*/ can )e classified in se#en different sta1es ,hich starts ri1ht
from recei#in1 the data of !olicyholder from the insurance com!any to claims settlement7
.he sta1es of the o!erational acti#ities are?
1 :ecei!t of data
2 *re!aration of IB cards7
3 <!datin1 master mem)er file
4 Hos!italiAation !roducer @ &on - net,ork hos!ital7
5 Hos!italiAation !rocedure @ &et,ork hos!ital7
6 Claims !rocessin1 !rocedure
7 *ost hos!italiAation claims !rocess7
.here are around 25 .*/0s in India8 some of these are?
Safe#a$ %ediclaim Services &'icense (o)026*
Alan+it Health Care 'imited &'icense (o) 021*
E %edite+ Solutions 'td &'icense (o) 007*, etc)
+uture of Health Insurance
"i#en the situation8 there are fe, issues of concern or )arriers to,ards im!lementin1 a
social health insurance scheme in India7 .hese are enumerated )elo, alon1 ,ith the !ossi)le
,ay ahead7
India is a lo,-income country ,ith 26F !o!ulation li#in1 )elo, the !o#erty line8 and 33F
illiterate !o!ulation ,ith ske,ed health risks7 Insurance is limited to only a small !ro!ortion
of !eo!le in the or1aniAed sector co#erin1 less than 14F of the total !o!ulation7 Currently8
there no mechanism or infrastructure for collectin1 mandatory !remium amon1 the lar1e
informal sector7 #en in terms of the e2istin1 schemes8 there is insufficient and inade=uate
information a)out the #arious schemes7 Bata 1a!s also !re#ail7 Much of the focus of the
e2istin1 schemes is on hos!ital e2!enses7
44
.here continues to )e lack of a,areness amon1 !eo!le a)out health insurance7 In s!ite of
e2istin1 re1ulation in some States8 the !ri#ate sector continues to o!erate in an almost
unhindered manner7 .he 1ro,th of health insurance increases the need for licensin1 and
re1ulatin1 !ri#ate health !ro#iders and de#elo!in1 s!ecific criteria to decide u!on
a!!ro!riate ser#ices and fees7 Health insurance !er se8 suffers from !ro)lems like ad#erse
selection8 moral haAard8 cream-skimmin1 and hi1h administrati#e costs7 .his is cou!led ,ith
the fact that in the a)sence of any costin1 mechanisms8 there is difficulty in calculatin1 the
!remium7 .here is also a need to e#ol#e criteria to )e used for decidin1 u!on tar1et 1rou!s8
,ho ,ould a#ail of the SHI scheme(s and also to address issues relatin1 to ,hether indirect
costs ,ould )e included in health insurance7 Health insurance can im!ro#e access to 1ood
=uality health care only if it is a)le to !ro#ide for health care institutions ,ith ade=uate
facilities and skilled !ersonnel at afforda)le cost7
4
Conclusion
In India has limited e2!erience of health insurance7 "i#en that 1o#ernment has
li)eraliAed the insurance industry8 health insurance is 1o in1 to de#elo! ra!idly in future7 .he
challen1e is to see that it )enefits the !oor and the ,eak in terms of )etter co#era1e and
health ser#ices at lo,er costs ,ithout the ne1ati#e as!ects of cost increase and o#er use of
!rocedures and technolo1y in !ro#ision of health care7 .he e2!erience from other !laces
su11est that if health insurance is left to the !ri#ate market it ,ill only co#er those ,hich
ha#e su)stantial a)ility to !ay lea#in1 out the !oor and makin1 them more #ulnera)le7 Hence
India should !roacti#ely make efforts to de#elo! Social Health Insurance !atterned after the
"erman model ,here there is uni#ersal co#era1e8 e=ual access to all and cost controllin1
measures such as !ros!ecti#e !er ca!ita !ayment to !ro#iders7 "i#en that India does not ha
#e lar1e or1aniAed sector em!loyment the only o!tion for such social health insurance is to
de#elo! it throu1h co-o!erati#es8 associations and unions7 .he e2istin1 health insurance
!ro1rams such as SIS and Mediclaim also need su)stantial reforms to make them more
efficient and socially useful7 "o#ernment should catalyAe and 1uide de#elo!ment of such
social health insurance in India7 :esearchers and donors should su!!ort such de#elo!ment7
.akin1 a look at the #arious ste!s and strate1ies that need to )e follo,ed )y
com!anies that ho!e to con=uer the Indian health insurance market8 ,e see that the four
main challen1es facin1 the industry are !roduct inno#ation8 distri)ution8 customer ser#ice8
and in#estments7 +le2i)le !roducts and ne, technolo1y ,ill !lay a crucial role in reducin1
the cost and8 therefore8 the !rice of insurance !roducts7 +indin1 the niche markets8 ha#in1 the
ri1ht !roduct mi2 throu1h add-on )enefits and riders8 effecti#e )randin1 of !roducts and
ser#ices and !roduct differentiation from com!etitorsV offerin1 ,ill )e a fe, challen1es faced
)y ne, com!anies7 Inar1ua)ly the !otential market for insurance )uyers is tremendous in
India and offers 1reat sco!e for 1ro,th7 >hile estimatin1 the !otential of the Indian
insurance market ,e are often tem!ted to look at it from the !ers!ecti#e of macro-economic
#aria)les like the ratio of !remium to "B* $,hich is indeed com!arati#ely lo, in India% but
the fact is that the number of potential buyers of insurance in India is certainly attractive.
46
$ibliography
Irda 9ournals of march0458 Becem)er045
htt!?((,,,7irdaindia7or1(
htt!?((,,,7med#arsity7com
htt!s?((,,,7)a9a9allianA7com(
htt!?((,,,7icicilom)ard7com(
htt!?((,,,7royalsundaram7in(
htt!?((,,,7cholainsurance7com(
htt!?((,,,7scri)d7com
htt!?((en7,iki!edia7or1(
/nnul re!orts from irda
htt-.//###)+ohinoor)ac)in
and search engines Google and yahoo
47