Professional Documents
Culture Documents
Health
Health is a state of complete physical, mental and social wellwellbeing and not merely the absence of disease or infirmity.
HEALTH INSURANCE
An insurance that pays the cost of medical, surgical and hospital expenses related to medical treatments of sudden,single episodes,fairly short-term and curable illnesses or injuries short(commonly known as acute conditions) OR, An insurance that protects an insured against financial loss resulting from medical treatment.
The Indian Life Assurance Companies Act,1912 was the first statutory measure to regulate life business. With a view of protecting the interest of the Insurance Public, the earlier legislation was consolidated and amended by the Insurance Act,1938. In 1993, the Government set up a committee under the chairmanship of Shri R.N.Malhotra to propose recommendations for reforms in the insurance sector. Following the Malhotra Committee report in 1999, the Insurance Regulatory and Development Authority (IRDA) was constituted as an autonomous body to regulate and develop the insurance industry.
Formal systems of Health Insurance in India began with the inception of Employees State Insurance Scheme (ESIS), to provide comprehensive health services through a network of own dispensaries and hospitals. The ESIS was soon followed by a scheme for the central government employees, the Central Government Health Scheme (CGHS), in 1954. A major innovation in the post-2000 period, is the availability of postcashless facility through the agency of TPA (Third Party Administrator) or through direct tie-ups of the insurers with the tiehospitals, where the insured need not make payments to the hospitals and the same is settled directly by the insurer with the hospital.
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Ideally, it is an amount on average of around 1,50,000- 2,50,000 1,50,000It depends upon the current earning capacity of the person, without disturbing his routine expenses. Group discounts can be availed if all the family members are covered in a single policy.
Hospitalization Expenses:
Room and Boarding expenses Nursing Expenses Fees of the Medical Practitioner Expenses on account of anesthesia, blood, oxygen, operation theatre charges, surgical appliances, medicines and drugs, diagnostic material, X-ray, Dialysis, chemotherapy, radiotherapy, cost of pacemaker, cost of organs and similar expenses.
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Day Care Treatment: The policy may cover expenses incurred towards technologically he advanced treatment that does not require hospitalization for 24hrs or more.
Domiciliary Hospitalization: Cover for treatment administered at home, subject to specific conditions PrePre- and Post Hospitalization: It covers the expenses of medical expenses for treatment up to 30 days before and up to 60 days after the hospitalization.
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2008-09
,3 61 10, 66 2
Standalone Non-life
10,000,000
25 8,6 37 ,
Life
Standalone Total
8,000,000
6,000,000
96 5,1 66 ,
Non-life Life
4,000,000
2,000,000
356419
40,078
798588
332,541
169703
153,097
100.00%
2007-08
2008-09
609,037
Non-life
600,000.00
496,901
500,000.00
Life Total
Standalone Non-life Life
400,000.00
319,757
300,000.00
200,000.00
2007-08
2008-09
100,000.00
1,116
2788
8968
Standalone Non-life
0.00
2006-07
2007-08
2008-09
Life Total
Subject Term Premium Guaranteed Diseases Covered Death Benefit Coverage Type Max. Entry age Max. Maturity age
Observations 1 to 30 years From 1 year to 5 years From 5 to 100. Focus on rampant diseases With introduction of Sec 80(D), most products do not have death benefit Only life assured to Dependent members Non linked to linked 50 to 65 years 65 to 75 years
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15.30%
4.60% 3.60%
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80.00%
57.30% 54.20%
49.28%
60.00%
%
40.00%
45.80%
40.70% 32.30%
29.60%
25.00%
20.00%
18.22%
14.50%
12.70%
11.65%
12.90%
0.00%
AUSTRALIA
CANADA
CHINA
INDIA
UNITED KINDOM
USA
General government expenditure on health as % of total expenditure on health Private expenditure on health as % of total expenditure on health Private Out-of-pocket expenditure as % of expenditure on health
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6 6 .4 0 %
3 9 .10 %
. Given the health financing and demand scenario, health insurance has a wider scope in present day situation in India. However, it requires careful and significant efforts to tap Indian health insurance market.
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Indian Railways 0.59% Pvt.Health Insurance 1.42% ESIS 3.19% CGHS 3.35% Community Insurance 4.19%
Low penetration of Insurance and Low Govt. expenditure in India . . . Has resulted in high Out-of-Pocket spend Out-ofSource: Business World (India) Oct 2007
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2006
Australia
Canada
US
UK
China
India
Life expectancy (avg. # of years) # of Physicians per 1,000 people Healthy life expectancy (avg. # of years) Healthcare spend (% of GDP)
82
81
78
80
74
64.0
Healthy life expectancy of India indicates that there is higher need of health insurance from age 60. 60.
2.5
1.9
2.6
2.3
1.4
0.6
74
73
70
72
66
60
8.7
10
15.3
8.2
4.6
3.6
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Critical question is hence how to improve the access to health care and financial protection of the poor . The most obvious solution will be to improve the health insurance penetration How to improve Health insurance penetration!!!?
Regulator/Government
Enhance customer awareness Enhance client confidence - real value benefits in the event of a claim Effective supervision Compulsory percentage of total business towards health Compulsory savings towards health Tax incentives to employers for promoting group health coverage
Insurer
Clients confidence - warrantable claim will be paid out in a reasonable time frame New clients have to be reached Value for money Design products as per clients needs Product transparency Cost efficiency affordability Wellness programmes
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Recent initiatives Committee to formulate regulations Pure health insurance products Allowing the formation of an stand alone health insurance company Standalone health insurance companies Renewability Senior citizens
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Description
Limited healthcare delivery network with
top few cities Insufficient data on consumers & disease patterns, absence of standardization of healthcare costs & significant levels of frauds leading to under-pricing of insurance underproducts and higher value of claims Low level of awareness among consumers about health insurance products and their benefits Insufficient data on Indian consumers & disease patterns and limited control of healthcare delivery network resulting in limited product and pricing innovation
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Description
Varying treatment costs across providers due to limited bargaining power Lack of standardization & accreditation in most healthcare facilities leading to difficulty in judging the authenticity of procedures & costs Limited funding support from the Insurance company impacting the claims disbursement time Delays and issues in claims processing leading to negative perceptions by insurance companies & consumers about TPAs
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Insurer Designing a less complex products Transparency in the product features Clarity in policy terms, conditions & exclusions Efficient back-office support for underwriting and claims processing backHigher Reinsurance Need for quicker services. Eg: Toll free no.s, cashless, quick response Expense analysis on a regular basis Product innovation Efficient training of sales force
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Policyholder Pay attention to policy conditions Read the exclusions and limitations very carefully Compare premium costs, deductibles, co-payments coTake an informed decision TPA Proper infrastructure Speedy claim settlement process Less paper work
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Regulator/Government Come out with health insurance regulations Centralized data base for health insurance experience statistics Provider rating Cap on renewal premiums Ensure that a decent portfolio of health coverage represent the rural sector Guard against ill effects of privatization Further tax incentives Compulsory savings towards health care Should emphasize the need to employ actuarial methods in various aspects of life and non-life nonbusinesses
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Management outlook Risk appetite of the company needs to be considered in pricing This aspect needs to be quantified in reinsurance arrangement, investment profile and capital structure of the company Reserving Is reserving purely a mathematical exercise? An Actuary needs to understand the behaviour of claims and constantly devise tools/methods for claims reserving purpose Employing a professional with required knowledge and experience is a must
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In the light of the above, the recent initiative by the Regulator to focus more on risk based pricing which involves the availability of the strong data base and also various analysis regarding pricing, to measure the underwriting impact, testing the profitability of products etc. , etc. emphasizes the need to employ actuarial methods in various aspects of life and non-life businesses. nonbusinesses. In addition, one should bear in mind that the an insurance product is not bought but sold in many cases. One major cases. reason that can be attributed to this is the lack of customer awareness (other reasons could be complex nature of the product, presence of many players in the market, customers ignorance etc.,) etc. Therefore, it is very important to enhance the customer awareness, which is currently at a low level. To achieve this level. means, the Government, Insurer and the Regulator has to play a very important role as discussed above. above.
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