Health insurance biz to touch Rs 35,000 crore by 2014-15

Rising middle-class incomes, inflationary pressure on healthcare costs and the popularity of state-sponsored healthcare schemes will help the health insurance business in India touch the Rs 35,000 crore mark by 2014-15, says the ‘India 2011 – Insurance Industry Report’ released by India Insure Risk Management and Brokerage Services.

The health insurance business has been growing at a steady pace over the past few years and accounted for 25 per cent of the overall business of the general insurance companies in 2010-11, against 23 per cent in 2009-10 and 20 per cent in 2008-09, retaining its second position after motor insurance. The sector earned a net premium of Rs 8,528 crore in 2010-11, against Rs 6,241 crore in the previous financial year.

According to the report, health insurance has been the fastest growing market segment registering a compounded annual growth rate (CAGR) of 32 per cent for the past six years. The growth drivers include an ageing population, increasing healthcare costs, improving per capita income and awareness and increasing employer-sponsored health insurance cover.

“Increased coverage under government schemes like Rashtriya Swasthya Bima Yojana (RSBY), innovative products to reach the rural sector, reduction in premiums and switching from hospitalization cover to health managed programmes under insurance, will all result in the health insurance sector growing to about Rs 35,000 crore by the year 2014-15,” the report says.

According to the report, the healthcare spend in the country is expected to double and touch Rs 2,25,000 crore by 2014 and with just 3 per cent health insurance penetration in the country, there is a huge market for health insurance in India.

The attitude of the Indian middle class towards the need for health insurance is also changing with factors like increase in lifestyle diseases, apart from rise in healthcare costs.

The report also questions why the industry focused only on hospitalization, which was only 20-25 per cent of an individual’s healthcare, spend, ignoring 75 per cent of the market. The insurance industry could also do well to develop new and innovative products in segments, such as micro-insurance health products and ‘health plus life’ products that provide life cover, along with health insurance to subscribers.

PSU to handle revised health insurance scheme

The state government has finally set the ball rolling for the Chief Minister's Comprehensive Health Insurance Scheme that would benefit 1.34 crore families in Tamil Nadu. One of the most popular welfare schemes of the previous DMK regime, it is now in the process of a revamp with the new government replacing the earlier private health insurance company with a public sector firm.

On Monday, the Tamil Nadu Health Society, the implementing agency for the revised scheme, convened a pre-bid meeting to clarify doubts. The first round of unsuccessful bidding saw nine firms, including the Star Health and Allied Insurance Company (Star Health), which managed the scheme under the earlier DMK government. In the latest round, only four firms - United India Insurance Company, New India Insurance Company, Oriental Insurance Company and National Insurance Company - took part after the state restricted it to public sector companies. "The decision to choose among public sector firms was taken by the cabinet. The government thought it would be hassle free and there would be more transparency in the operations," said a senior official. Bidding is open till November 21.

"The new scheme will have extensive benefits as it covers more than 900 surgical procedures, including life saving interventions like cardiac, renal, neurological procedures and neonatal/ pediatric procedures which were hitherto not covered," said a senior official.

The scheme has been allotted Rs 750 crore for the current fiscal. After negotiations with the 12-member State Empowered Committee, Star Health, the lowest bidder in the previous round, reduced its offer to Rs 508 from Rs 510 towards premium per family. But it was still high for the state-sponsored scheme.

As per the plan, the sum assured is Rs 1 lakh per annum per family, while Rs 1.5 lakh for certain specific procedures like renal transplantation and more than one cardiac valve replacement. Under the new scheme, a family which has an annual income of Rs 72,000 is entitled to avail the benefits.

The successful bidder will have to ensure the availability of a minimum of 50 networked hospitals in Chennai, 20 networked hospitals each in the districts of Coimbatore and Madurai, six networked hospitals each in other districts excluding government hospitals. There will be a minimum of 50 networked hospitals in the areas under each region of the state.

Max Bupa aims to breakeven by 2015

Max Bupa Health Insurance, one of the hottest players in the health care insurance business in India, hopes to reach a break-even in operations by 2015. The company, which started operations in mid-2010, is 76:24 joint ventures between Analjit Singh promoted-Max India and UK-based BUPA.

The chief financial officer of the company Neeraj Basur said, Max Bupa Health Insurance has an equity assurance of Rs 700 crore from the joint venture partners, of which, over Rs 300 crore has been infused so far. “We hope to break even in the 5^th year of operations as we had targeted,”

Being one of the most recent players in the business, Max Bupa has been trying to decide itself from other players by present unique products and special services. For instance, the company was the first to offer health insurance products with a sum insured of over Rs 15, 00,000, after which many other companies jumped into the fray, according to Basur.

In an industry where the average size of sum insured in health insurance covers is Rs 2, 00,000, Max Bupa offers health insurance products with covers ranging from Rs 15, 00,000-50, 00,000.

“We have a decent number of customers who have taken our Rs 50, 00,000 products. It depends on the customer needs. There is certainly a segment that sees value in these kinds of products. Those customers who want to ensure there are no hassles or running around when there is a health problem and if they can afford to pay that kind of premium, they go for it,” Basur observes.

Also, with the increasing medical costs and inflation driving prices up, people find it essential to move to policies with higher sum insured to ensure that they have enough coverage in the next ten years, he says.

Being a pure play health insurance player, Max Bupa has no insurance intermediaries or third party administrators, which makes the claims settlement process easy for the customers. Also, unlike most players, who get a bulk of their business from group health insurance schemes, the individual, retail customers are the focus for Max Bupa.

The company, which clocked a new business premium of Rs 46 crore for the first half of this financial year, hopes to complete its first full year on a strong note. “We have already crossed the 100,000 mark in customer base, which is pretty good for a 14 month old company. We hope to close this financial year with a total premium of Rs 70 crore,” Basur said.

Save Non life insurance Govt companies-Govt to disinvest

There is news that Indian government is in consultation to sell stakes in major Non life insurance companies. These are New India Assurance, National Insurance, oriental and United India. Is this move done to get more cash for government or it wants to modernize these players.

In Non life segment- the two major categories come are -
1. Health Insurance
2. Motor Insurance

With these companies who have large market share - it will certainly change the industry.
For customers - what this can do.

These companies are considered honest in terms of claims but to get claim in these companies is a very tedious work.

With selling the stake- may be new teams will get appointed who will look after the concerns in delay of claims etc.

The other motive behind this govt move can be to insure these companies do not get into large losses and with public participation in capital, they make find there way to profitability.
To comply with norms all these companies will have to have independent directors which will help in restructing.

Government plans to list general insurance companies

The government has started consultations on listing public sector general insurance companies besides selling shares in small lots at a time when it is facing a cash crunch.

Senior government officials told TOI that the finance ministry has started internal discussions on listing of the four general insurance companies - New India Assurance, National Insurance, Oriental Insurance and United India Insurance.

At the same time, the four companies are unlikely to hit the market together. Instead, listing of these companies will span a period of time just like public sector banks, where Punjab & Sind Bank was listed only last year, while State Bank of India has been listed for several years.

Given that New India is the largest player in the business, it is likely to be the first off the block.

UPA-2 has usually sold shares in small lots along with listing or follow-on issues by public sector companies. Punjab National Bank is the only instance of the Center disinvesting its stake in a financial sector company at the time of listing.

Listing of state-run players will also set the stage for some of the private sector general insurance companies tapping the markets.

But listing the public sector players is not going to be easy as their accounts are usually delayed. Most will also need to restructure their boards to comply with the listing norms, including a set of independent directors.

Rejig on at four PSU general insurers

While the government is planning to list public sector general insurance companies, over the last few years, it has tried to improve corporate governance standards and initiated an organizational rejig at four general insurers that are wholly-owned by it.

For instance, the insurance companies have started adopting core solutions, which is an electronic interface, allowing customers to transact across the country much like banks where you can now deposit or withdraw funds at any of the branches.

They have been asked to factor in the possible claims into their accounts since settlement in cases such as motor insurance takes years.

During the last fiscal, the state-owned general insurance companies saw a decline in their net profit on account of lower investment income as also due to higher provisions for motor insurance losses.

For instance, United India reported net profit of Rs 130 crore against Rs 707 crore a year ago, while National's profit fell to Rs 75 crore from Rs 225 crore in the previous year. Oriental Insurance bucked the trend reporting profit of Rs 54 crore against losses in 2009-10.

For general insurance companies, especially the public sector players, profit is usually a function of income from investment. For instance, New India Assurance's asset base was estimated at nearly Rs 40,000 crore at the end of March.

Similarly, the market value of United India's investment was almost Rs 16,000 crore. Thanks to their pre-nationalization legacy, they are major shareholders in the top companies in India which helps them cover the losses they incur on their insurance business.

Claim tax benefits for your medical expenses

It is rightly said that “health is wealth”. To ensure good health of ourselves and our families, medical costs are usually on the higher side, which may include medical insurance premium, medicines and hospitalisation costs, among other things. There is, however, some relief from taxes for such expenses.

Medical insurance: In times of rising medical costs, it is wise to invest in medical insurance for yourself and your family. By doing so, one not only ensures medical cover for oneself and the family during a medical emergency, but also gets relief from tax benefits associated with the expenses.

As per Section 80D of the Income Tax (I-T) Act,1961, a deduction can be claimed by an individual for the premium paid towards medical insurance or any contribution made to the Central Government Health Scheme. The deduction can be claimed up to Rs 15,000 per annum or the amount paid, whichever is lower. Here, family would mean spouse and dependent children of the individual.

In addition to the above, an individual can also claim deduction for the medical insurance premium paid up to Rs 15,000 per annum for parent(s) or the amount of premium paid, whichever is lower. Further, these deductions are increased up to Rs 20,000 per annum in case the premium is paid for a senior citizen (65 years old or more).

For example, if a person buys health insurance for himself and his parents, who are senior citizens, then the total premium that can be deducted from his taxable income will be Rs 35,000 per annum (Rs 15,000 for self plus Rs. 20,000 for parents).

It is imperative to note that for claiming an exemption under Section 80D, the payment for the same should be made by any mode other than cash. In addition, only medical premium paid under the medical insurance scheme of General Insurance Corporation, approved by the central government, or any other insurer, approved by the Insurance Regulatory and Development Authority (Irda) shall be eligible for the tax benefits specified above.

Reimbursement of medical expenses of employees: Reimbursement of expenditure actually incurred by the employee for his or his family member on medical treatment (domiciliary medical expenses) is exempt for up to Rs 15,000 per annum. Any reimbursement that is above the said limit would be liable to tax as income in the hands of the employee. Family for this purpose includes spouse, children, parents, brothers and sisters of the individual or any of them wholly or mainly dependent on the individual.

Generally, the employers insist on submission of original medical bills by the employee before making the said reimbursement prior to providing an exemption.

Dependent with a disability: In case an individual has incurred any expenditure on a dependent with a disability, then he would be allowed maximum deduction of Rs. 50,000 per annum or Rs 1,00,000 per annum, depending on the severity of the disability of the dependant under Section 80DD of the I-T Act. The expenditure could be on account of the medical treatment (including nursing), training and rehabilitation or an amount paid/deposited under any scheme framed in this behalf by the Life Insurance Corporation of India (LIC) or any other insurer for maintenance of the dependent.

Few specified diseases: An individual can claim a deduction up to Rs 40,000 per annum (Rs 60,000 in case of senior citizens) under Section 80DDB of the I-T Act for expenses incurred on treatment of certain prescribed diseases or ailments, such as malignant cancers and AIDS, among others, subject to fulfillment of conditions prescribed under the I-T Act.

Therefore, it can be said that while medical costs have increased substantially, the silver lining is that one may claim tax deductions available for these expenses.

Oriental Bank widens focus to include Mediclaim policy

Oriental Bank of Commerce today entered into a memorandum of Understanding with Oriental Insurance Co Ltd for selling Mediclaim policies to the bank's customers through its pan-India network.

Oriental Bank Mediclaim policy is cash-less family floater covering the members of the beneficiary's family. The policies are available for Rs 1 lakh to Rs 5 lakh. For a policy of Rs 5 lakh, the premium is as low as Rs 6,705 a year.

The memorandum of understanding was signed by Mr. R.M. Sharma, General Manager, Oriental Bank of Commerce (OBC), and Mr. A.K.Saxena, General Manager, Oriental Insurance Co, in the presence of Mr. Nagesh Pydah, Chairman and Managing Director of the bank, and Mr. R.K. Kaul, Chairman and Managing Director of the insurance firm.

Mr. Kaul noted that this policy has some features that are unique for OBC's customers. “This product will be available for all OBC customers up to the age of 79 years. Also, no medical check up will be required.”

So far, Oriental Bank was not looking at general insurance products as a source of “revenue” for the bank. However, there is now a change in its revenue model and OBC has decided to also focus attention on general insurance products for increasing its fee-based income.

“This product was a long-felt need of our customers. Oriental Bank Mediclaim policy will fill the gap in our bouquet of products and services. This should help us in our fee-based income and also in bolstering CASA. This will be a great opportunity for us to build our Current Account Savings Account (CASA) deposits,” Mr. Pydah said.

All Metro and urban branches of the bank have been mandated to sell minimum 250 policies in the next six months, he said. The six-month target has been pegged at 175 policies for semi-urban branches and 75 policies for rural branches.

Disclose agreements between TPA and hospitals

The agreements between public sector health insurance companies and hospitals, including those with third party administrators, should be disclosed to ensure transparency in delivery of medical services to an insured person, Central Information Commission has held.

The Commission rejected the arguments put forth by Oriental Insurance Company that the agreements are between the Third Party Administrators (TPA), to whom the processing of claims is outsourced by the insurance companies and the hospitals and since the TPAs are not public authority, there is no obligation to disclose these agreements.

Information Commissioner Deepak Sandhu held that funds for implementation of health insurance policies is paid by the respondent (Oriental Insurance) which is collected as premium from its customers.

"Therefore this argument is without merit," she said directing the company to disclose the information. However, the Information Commissioner agreed that some portions of these agreements could be severed as it could adversely affect commercial interests of the company.

Sandhu was hearing the plea of an RTI applicant who had sought information from Oriental Insurance on the issue and list of hospitals across the country which provides cashless treatments facilities.

“The disclosed portions would serve to provide greater transparency in respect of the medical services to which the insured are entitled and therefore lend itself to better service been provided to the insured," Sandhu held in her order and also directed the company to place on its web site the names of hospitals which provide cashless treatments.

Get the right health insurance cover under portability

Until portability was allowed for health insurance, customers were wary of shifting to a new insurer, even if they were unsatisfied with the existing one. The fear was the loss of accumulated loyalty benefits or having to begin the waiting period for existing diseases afresh. But now, with the option of health portability in place, they can right their wrongs. However, it would be wise to keep a few factors in mind before shifting to another insurer.

“Customers can only take the policy in totality. So it’s important to understand the benefits offered under the existing health policy and to match those with the plan one wishes to port to,” says Apollo Munich Health Insurance CEO Antony Jacob.

Those planning to port their services should look for an insurer with a good track record in claim settlements and a large network of hospitals. Besides these, there also are other conditions that should be looked up to avoid being in a spot when making a claim.

WHAT TO LOOK FOR IN A NEW INSURER

Claim-settlement record and network of hospitals for cashless facility Lifelong renewals. Insurers cannot refuse renewals to aged customers Additional premiums, co-pay and sub-limits Incentives for prudent usage of policy Flexibility to increase cover with age Wellness support facilities

Additional loading: Typically, if you have a hospital cash cover, you can opt only for a similar cover with another insurer. Going by the apples to apples logic, there may not be a wider scope for added premiums or loads on renewals.

But insurers say every portability request is considered as a new application. So, if a customer is considered a high-risk person under an insurers’ underwriting norms, he may be asked to pay a higher premium or extra loading. In such cases, unless the insurer is offering a better cover, you should not port your services in haste.

Co-pay and sub-limits: Companies often ask customers to share the risk burden, and levy conditions like co-pay or sub-limits on treatments. Under co-pay, a customer pays a percentage of the total cost, while under sub-limits, he pays anything above the pre-decided cost limit for treatment. For instance, Bajaj Allianz General Insurance levies the co-pay structure, if the customer goes to a non-network hospital.

Customers could look at insurers that reward customers for prudent usage of the cover. So, for instance, Apollo Munich encourages shared accommodation or hospitalisation under its ‘Easy Health’ policy. As an incentive, depending on the slab applicable, it offers Rs 300-500 per day hospital cash to policy holders.

“The cash perks attached to them mean lower price on the product in the long run,” adds Jacob.

Renewals: While insurers have been following 70 years as the average age after which they refuse covers to individuals, customers should now insist on lifelong policy renewals.

“There is no official regulation from the Insurance Regulatory Development Authority (Irda) on the age limit and insurers have been told that they cannot refuse health policy renewals. This, in effect, makes lifelong renewals a must,” says Suresh Sugathan, head (health administration team), Bajaj Allianz General Insurance.

Increase in cover with age: Given the rise in medical inflation, your current cover may be insufficient at a higher age. While you may plan to bridge the gap by buying a new policy, companies are sceptical about covering those in the higher age bracket, as medical risks rise significantly with age.

“Customers should, instead, approach their existing insurers, as they are much more open to upgrades from own customers, subject to the necessary medical tests,” adds Sugathan.

Doing this will also help a customer skip the waiting periods applicable on new policies.

Wellness support: A number of companies now offer wellness support to their customers through helpline set-ups for health tips, medical camps and newsletters. These are value additions and part of awareness campaigns insurers undertake.

But, experts warn, one should take into account the kind of support offered, since the costs involved are met by insurers in premiums. “How many people would really follow the advice dispensed by a doctor on the other side of the phone helpline,” asks an official.

It would be better to see if the new insurer has tied up with hospitals and offers discounted rates for out-patient procedures not covered in the basic policy.

HDFC Ergo to provide $15m cover to Formula 1

Private general insurance company HDFC Ergo, in collaboration with the Delhi-based Ace Insurance Brokers, will provide an insurance cover of USD 15 million (Rs 67.5 crore) to the Formula 1 Race, which is being organized in the Capital from the month end, the company said today.

"The insurance cover would protect the Formula 1 Grand Prix event against adverse weather, non-appearance of several teams, riots, strikes and civil commotion leading to cancellation of the event, its postponement or relocation," it said in a statement.

HDFC Ergo, which is a 74:26 joint venture between the mortgage leader HDFC and Ergo International AG, is the lead insurer for the event, it added.

Commenting on the deal, Anuj Tyagi, Head, Corporate and Rural & Agri Business of HDFC Ergo said, "insuring such a high- profile event in a country like ours is a great learning experience."

As per the company, the organisers would write off the costs including deposits, advertising, printing costs, and booking fees among others in case of cancellation of the event.

"A policy like event cancellation insurance policy is a savior for the organisers because it pays any irrecoverable cost or expense, which have been or will be incurred in connection with the event, following a cancellation, interruption, postponement or relocation due to any of the insured perils," Director of Ace Insurance Brokers, Anil Arora said.

Comprehensive Health Insurance from Apollo Munich

Everybody wants to have complete health protection. The problem arises when they choose a health policy for themselves. There are very few numbers of people who know how to make a right choice. Majority of people buy the plan that is recommended by their friends or relatives, thus ignoring their healthcare needs. A person should try and buy a comprehensive health insurance policy so that there are no issues before him/her at the time of medical emergency. These policies help a person to enjoy life under the complete coverage.

Apollo Munich, a joint venture between the Apollo Group of Hospitals and Munich Health, has taken all the above said parameters in mind and has designed products, looking into healthcare needs of people. It has brought a variety of products to help Indian citizens seek medical treatment with ease. An insured need not have to worry for the medical expenses while seeking quality healthcare. There are products for people of all income groups.

India’s first 360 degree product, called Maxima, is the most comprehensive health insurance plan designed by Apollo Munich. It offers wide coverage, which includes inpatient as well as outpatient treatment, maternity expenses, optional critical illness cover, outpatient treatment for pre-existing diseases etc. There is no doubt that the premium associated with this plan is quite high but it is far too less than the coverage offered with this plan. There is coverage for pharmacy costs, diagnostic tests, doctor’s consultations, up to a certain limit. It is, therefore said that Maxima makes medical treatment almost free for an insured.

Looking into other products brought by the company, Easy Health has gained much popularity. In the recent survey, in which various health insurance products in India were compared on basis of their price and features, Easy Health gained the topmost position for being the best medical insurance policy. It is one of the 5-star rated products. One good aspect of this product is that there are three variants and a person can buy the one, as per his/her health needs and budget. This plan also offers complete health coverage at cost-effective price.

Both these products, mentioned above, come with a lifelong renewal facility such that its customers can enjoy the coverage for the entire life. Regular renewal also helps them to enjoy continuity benefit. So, a person can enjoy life under the coverage of these plans.

Govt med insurance only for general ward patients

Only patients admitted in a general ward will be eligible for the government sponsored cashless health insurance for inpatient treatment for primary and secondary illnesses in government and private hospitals in Goa. If a patient is admitted in the ICU, the "Swarnajayanti Aarogya Bima Yojana" card will not serve to pay for treatment.

The card has a ceiling of Rs60, 000. Admitting this, health minister Vishwajit Rane said, "The scheme is for primary and secondary illnesses and one doesn't need ICU admission for these illnesses." Doctors, however, differ with the health minister's view. "Treatments under the scheme include major surgeries such as nephrectomy (surgery to remove part or entire kidney), abdomino perineal resection (removal of anus, rectum, or colon), commando operation (surgery for first degree malignancy of the tongue) and other such treatments, in which patients in a majority of cases need to be admitted in the ICU. Also what about patients who come to the hospital for primary and secondary care but later develop complications and need to be shifted to the ICU?" Association of Private Nursing Homes spokesperson Dr Govind Kamat said. Dr Mithun Mahatme of Mahatme Nursing Home, Bicholim said, "The intent may be good but implementation is not practical. The insurance is for admission in a general ward.

What happens if an emergency patient comes and the general ward beds are full? Also, the rates quoted are low due to which we would be forced to cut corners which won't be in the patients' interest." Though private hospitals have shown discontent with the rates, ICICI Lombard, that will run the scheme, claims that Manipal, R G stone, Wockhardt and SMRC-Vivus hospitals (all corporate hospitals) have agreed to the terms and the company is in final talks with a several other hospitals as well.

Pvt hospitals roped in

FISG-ICICI Lombard GIC Vice-president Birendra Mohanty said, "The implementation of the scheme has already begun and we have roped in more than 10 private hospitals in the network, along with three public hospitals. We are in negotiations with other private hospitals." Kamat, however, said, "The hospitals named by the insurance company are not members of our association. As far as we know, except for one member, none of the others have entered into an agreement with the insurance company. We have also called a meeting of all the members on Sunday to decide the future course of action." Goa has about 110 private nursing homes.

Rane added, "We want the association of private nursing homes on board. They do have some apprehensions but that will be resolved by ICICI." ICICI Lombard's "scope of services" clause states that the package will include "bed charges (general ward), nursing and boarding charges, surgeons, anesthetists, medical practitioner, consultants fees, anesthesia, blood, oxygen, OT charges, cost of surgical appliances, medicines and drugs, cost of prosthetic devices, implants, X-ray and diagnostic tests, food for patient etc". It also includes expenses incurred for diagnostic tests and medicines one day before admission and up to five days after discharge from the hospital.

Transportation expense from the patient's residence to the hospital is also covered and would be reimbursed in cash by the hospital to the patient on providing proof of expenditure. The maximum amount payable to the patient for transportation would be `100.

All you need to know about health insurance portability

Now, policyholders, who are dissatisfied with their current health insurers, have the freedom of switching to other insurers who offer a better deal without losing the continuity benefits. But before switching the health insurers, know the fine prints.

Firstly, when a customer shifts to a new insurer, he will have to undergo all underwriting procedures just like a new policyholder. The loading for porting will be decided only after the completion of medical risk assessment.

Bajaj Allianz General Insurance, head-underwriting, TA Ramalingam says, “The new insurer has the right to reject your policy based on its underwriting guidelines, which may differ from your existing insurer. So customers need to be cautious before planning to switch.”

Why would anybody shift to a new insurer? Of course, to get a better deal compared to the existing health one. So, compare the sum insured available with the new insurer that you intend to shift.
It is always better to switch the plans that are similar in nature. Otherwise, the policy will end up in opting either lower cover or higher cover.

The policy holder has to inform the new insurer about the time regarding the choice of switching. According to Irda guidelines, insurers need to be informed 45 days before renewing the existing policy. If the request for the portability is made after 45 days, the insurer may reject the request.

Waiting period for certain illness varies from insurer to insurer. Hence, it is important for the policy holders to check the time period for pre-existing diseases. Besides the specific exclusions, other terms and conditions need to be scrutinised well before shifting.

“Take a conscious decision on shifting. Service levels of the insurers would be the most important criteria while changing your insurer. People would like to shift to an insurer who has excellent service levels especially in claims settlement,” says Shreeraj Deshpande, head-health insurance, Future Generali India.

The earned bonuses so far with the existing insurer may change as per the new portability guidelines. Ensure that you get existing benefits and additional benefits while porting your health insurance policy.

It is advisable to compare the product constructs such as internal sub-limits and co-payments. Also the policy holder should be aware about the age band pricing and how people of higher ages are treated while porting.

“With the implementation of health insurance portability, insurers will have to enhance their service capabilities and engage in constant innovation to service their existing and potential customers. It is expected to bring in new benchmarks in delivery mechanisms and product innovation in the industry,” say Damien Marmion, chief executive officer, Max Bupa Health Insurance.

SBI Life introduces ‘Hospital Cash' plan

SBI Life Insurance has launched its latest health insurance plan ‘SBI Life Hospital Cash'. The plan provides fixed daily allowance to the insured for every day of hospitalisation.

“Our foray into health insurance is also aimed at addressing the issues of rising healthcare costs and acute under-penetration of health insurance in India,” said Mr M.N. Rao, MD and CEO, SBI Life Insurance.

Hospital Cash's daily hospitalisation cash benefit is available for a fixed policy term of three years and offers the flexibility of premium payment options, with collection on a yearly, half-yearly or quarterly basis.

It provides policyholders with a 100 per cent fixed payout from the first day of hospitalisation without any deductions.

The cover can be renewed till the age of 75 years.

In case the insured person is admitted into an ICU, the amount receivable by the policyholder is twice that of the Hospital Cash's regular cash benefit.

An additional fixed lump-sum of Rs 10,000 is payable to policyholders covering two or more family members under the plan in case the insured person is admitted to the ICU.

Bonus up to 40 per cent of enhanced sum assured without increase in premium, discount of 2.5 per cent on premium on renewal of policy, family rebates up to 10 per cent and premium guarantee for three years are additional features of the plan

Health cover doesn’t fit the ayurveda bill

Are you suffering from diabetes, arthritis or any other chronic disease and opting for ancient forms of medicine? The good news is insurance cover is available for such patients. After some insurance companies began recognizing ayurvedic treatment, many are going ahead with cashless transactions or 80% reimbursements for chronic diseases. Not just that, Karnataka has recognized 15 ayurvedic hospitals for its employees who can undergo treatment and even claim reimbursement.

The Ayush department is in the process of drafting specifications of ayurvedic treatments that can be reimbursed like any other mainstream one. "This can help employees get treated anywhere they like," said Ayush director G N Srikantaiah.

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It is also evolving standards for alternative medicine hospitals so that they can be covered by private insurance companies.

But ayurvedic hospitals feel private insurance companies are still restrictive in terms of coverage. At Soukya holistic health centre in Whitefield, 25 cases of 80% coverage have been made after some insurance companies began covering alternative medicine. "It was a little tough as the parameters of our treatment do not match that of mainstream medicine and diseases. Neither do we have standard pricing. But nowadays, people are coming to us for long-term chronic diseases that could cost up to Rs 1.5 lakh. These are comparable to surgeries in English medicine," said Dr Isaac Mathai, director of Soukya.

Soukya is in the process of getting a certificate from the National Accreditation Board for Hospitals and Healthcare Providers (NABH), so that the process of insurance coverage becomes smoother. At Soukya, the diseases mostly covered by insurance are chronic longterm conditions like arthritis , spondilytis, neurological diseases and even cancer. "Anything chronic should be covered by health insurance providers ,'' added Dr Mathai.

Insurer cannot arbitrarily refuse policy renewal

Healthcare is costlier than a stay in a five-star hotel. Clearly, it is beyond the means of the common man. One-time hospitalization can wipe out a lifetime's savings. So, mediclaim policy, as a welfare measure to bring the cost of decent healthcare within the reach of the average citizen, was introduced. Yet, insurance companies, which willingly accept premium year after year, are reluctant to settle legitimate claims. They look for excuses to reject these.

Often, insurers arbitrarily refuse to renew a policy, when it becomes evident that the claims ratio would go up. This, clearly, is not permissible, as held by the Supreme Court in the case of Biman Krishna Bose versus United India Insurance & Anr.

Biman Bose and his wife, Alka, had a mediclaim policy with United India Insurance. Alka fell ill, and was hospitalised. After discharge, a claim was made for reimbursement of expenses, amounting to Rs 8,243. Although all the necessary documents were submitted, yet even this meagre claim was not settled. This, despite repeated reminders.

So, the insured filed a complaint before the Kolkata district consumer forum. The ding-dong legal battle spanned four years and four tiers of courts till the Supreme Court finally intervened, directing the insurer to pay the claim, as also awarding Rs 20,000.

One would have expected the matter to have concluded here. But, unfortunately, when the policy became due for renewal, the insurer refused to renew in vengeance.

Once again, the insured felt compelled to take legal action. A writ petition was filed in the Calcutta high court, and the second round of battle ensued.

The High Court allowed the writ, set aside the insurer’s refusal, and directed the policy be renewed.

The insurer, however, contended the policy had lapsed, as, during litigation, the renewal premium had not been paid. So, the division bench, while agreeing with the view taken by the single judge, directed the insured to subscribe to a new policy, holding that renewal was not possible.

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This order defeated the very purpose of litigation, because, in case a fresh policy is taken, all pre-existing diseases are excluded. Also, claims in respect of certain diseases contracted within the first 30 days of the new policy are excluded. So, Bose appealed to the Supreme Court (SC).

The SC observed the insurer is bound to act fairly and reasonably. Renewal cannot be refused on irrelevant and extraneous considerations, or in an arbitrary manner. Refusal to renew merely because the insured had approached the courts against the rejection of the claim is not justified.

The SC further observed the initial renewal premium had been paid by the insured, but wasn’t acknowledged by the insurer. Even during the intervening years of litigation, there arose no occasion to deposit the premium.

Accordingly, it held the refusal to renew as unfair and arbitrary, and directed the policy be renewed from the date it fell due for renewal.

It also ordered to further renew the policies for the subsequent expired years, if the premium had been paid. The insured was also awarded costs of Rs 5,000.

Since then, the SC has now held that refusal to renew a policy amounts to victimisation, unfair practice, and high-handededness.

Health expo to unveil low-cost medical equipment

The Indian healthcare sector has emerged as one of the most progressive and largest service sectors in India. The public sector however is likely to contribute only around 15% to 20% of the required $ 86 billion investment.

"The corporate India is, therefore, leveraging on this business potential and various health care brands have started aggressive expansion in the country," said Dr EV Ramana Reddy, secretary to the department of Health and Family Welfare, at the inauguration of a three-day long exhibition, Healthex, on Friday.

“Various state governments are collaborating with the private sector through PPP to improve efficiency and decrease the inequity in the health system. Community health insurance initiatives have also been undertaken in terms of Yeshaswini Scheme in Karnataka,” said Dr Reddy.

The country's vision 2020 should include the delivery of affordable healthcare system even to the rural people. Preventive healthcare is another aspect that should be focused on and doctors should gear up to educate patients, he added.

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On the healthcare development in Karnataka, he revealed that the healthcare landscape is changing rapidly with corporate and foreign hospitals setting up centres to offer high quality healthcare. Moreover, the government is also promoting India as the global healthcare destination to offer holistic treatment. Now, private and public hospitals need to synergise their efforts to promote India as the healthcare destination worldwide, said Dr Reddy.

The Indian healthcare industry is undergoing a rapid expansion and in order to survive the healthcare market competition and growth, hospitals are continuously updating themselves on current issues, challenges, and the best methods to reach out to and serve their patients better, he said.With several innovations in the healthcare sector, there is a need for both private and public sector to work jointly.

"The rapid technical changes in the recent past and the commitment of the Army Medical Corps Services to provide a cradle-to-grave service have encouraged diversification in the unexplored fields in military medical services,” said Air Vice Marshal Pankaj Tyagi, principal medical officer, Headquarters Training Command, Indian Air Force.

Rs.150-cr for new insurance scheme

A sum of Rs.150 crore has been allotted initially against newly-formulated Chief Minister's Comprehensive Health Insurance Scheme, Finance Minister O. Panneerselvam announced in the Assembly on Thursday.

The old insurance scheme of the DMK regime was terminated, but to benefit patients in the bridge period between suspending the old scheme and launching the new one, a sum of Rs.100 crore was separately allocated, Finance Secretary K. Shanmugam said in his post budget briefing.

The government will focus on improvement of primary health care facilities in urban areas. The 60 centres already sanctioned under the National Rural Health Mission, will be shifted under the administrative and technical control of the Directorate of Public Health. Further, the Finance Minister announced that Urban Primary Health Care centres will be set up in 75 more small urban towns. A super-speciality centre, at a cost of Rs.100 crore, would be set up in Annal Gandhi Government Hospital, Tiruchi.

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Additionally, infrastructure and equipment upgradation has been planned for district hospitals and poison treatment centres at a cost of Rs.55 crore, under the Tamil Nadu Health Systems Project. Also, under public-private partnership agreements, diagnostic facilities at the major hospitals will be improved, and state-of-the-art computer aided laboratories established in all districts in a phased manner. A ‘Hospital on Wheels' scheme will be launched to provide door-to-door health care services far-flung areas to begin with. Sanitary napkins will be provided free of cost to rural girls through the ICDS network and village health nurses. A sum of Rs.46 crore has been provided for this.

Emergency transportation provided through the 108 ambulance service will further be extended to offering inter-facility transfer for all emergencies. Additionally, special vehicles will be put into service in tribal and hilly areas, and one vehicle will be provided per district for transporting new born babies.

IndiaFirst Life forays into health insurance

IndiaFirst Life Insurance on Wednesday forayed into the health insurance segment by launching a new product and said it expects to garner about 10 per cent of its total premium within next three years.

The company, a joint venture between public sector lenders Bank of Baroda and Andhra Bank along with UK-based investment firm Legal & General, also said it aims to sell at least 1 lakh health insurance policies within that period.

"As a line of business, health offers the best potential in the insurance sector. We have today launched out first plan -- IndiaFirst Money Back Health Insurance Plan -- and in the coming days, we will come out with more offers," IndiaFirst Life Insurance Managing Director and Chief Executive Officer P Nandagopal said.

The Money Back Plan would offer protection to customers for up to 10 years. The minimum premium payout of the customer would be Rs 10,000.

The health insurance cover would be a minimum for Rs 1.5 lakh and maximum of Rs 10 lakh.

"Health insurance, along would pension and micro- insurance, would be our three focus areas and we expect 10 per cent of our total business to come from health insurance within three years," Nandagopal said.

We also aim to sell at least one lakh health insurance policies in next three years, it added. The plan would offer health cover as well as savings option to the customer.

A part of the premium, depending on the age and health of the customer, would be credited into the buyer's policy account and this money would be invested in various funds to get optimum returns.

"The plan offers a comprehensive health cover for the entire family along with the investment flexibility to grow wealth by investing in different funds under a single plan," Nandagopal said.

"Our aim is to grow by 40 per cent year-on-year and be among the top six players within three years in the life insurance segment," he said.

IndiaFirst Life Insurance, which started operations in March 2010, currently has total premium of over Rs 1,000 crore.

A large population is without health insurance, as the industry has reached only 4.22 per cent of Indians. Around 14 crore people in urban areas remain untouched by any form of health insurance.

Choose your health cover with care

Check for renewal ceasing age, co-pay norm and sub-limits before opting.

A health insurance policy is a ‘must-have’ according to financial planners. Yet, picking up the right health insurance is not an easy task, given that there are 23 health insurance companies. Consider the six to eight life insurers offering health benefits and customers can be spoilt for choice.

While cost is certainly a deciding factor when choosing a plan, here’s a checklist of what else to consider.

Renewal ceasing age: Customers buying insurance rarely look at the age of policy renewal. The renewal ceasing age is the one when the insurer, no matter how long you have been with it, will refuse to renew your policy. For instance, health policies from ICICI Lombard cease at age 70.

Obviously, the higher the renewal ceasing age, the better. Most companies now offer higher or even lifetime renewal policies to customers.

Co-pay options: Typically, as health risks rise with age, companies ask customers to chip in. Besides higher premiums, customers may also have to co-pay for the policy. Companies follow different parameters to decide when they will convert the policy to a co-pay scheme.

For instance, Star Health Insurance begins co-pay once the renewal ceasing age sets in. So, customers could extend their period of coverage by changing their existing plan to a co-pay scheme. Bajaj Allianz General Insurance asks to co-pay if the customer goes to a non-network hospital.

Exclusions and PEDs: These two factors are the most painful ones. An exclusion is a statement in an insurance policy which describes a condition or type of loss not covered under it. Like, hospital cash plans do not cover dental treatment or surgery, pregnancy-related treatment, childbirth and so on.

KG Krishnamoorthy Rao, MD & CEO, Future Generali General Insurance, says, “Check for the coverage in terms of the inclusions and exclusions. These are mentioned in the policy brochure. And, if it does not cover something, you can either opt for other plans or take a rider.”

Another important feature, pre-existing disease (PED), may or may not be covered in health policies. PED is an illness or medical condition diagnosed prior to buying the policy. Nowadays, most companies cover PED with a lag of two to four years.

Sometimes complications arising from already existing diseases may also not be covered for the first four years of the policy. Senior citizen health plans exclude many ailments and, in many cases, need to be topped up with a rider.

Sub-limits: Check, Krishnamoorthy warns, to check for the limit on payments against the health plan. Health insurers reimburse those expenses that have been incurred reasonably. This is one way for insurers to restrict payments, especially when they think there is overcharging by hospitals. Typically, policies have a cap on the hospital room rent, operation theatre, ambulance charges and so on. For instance, ambulance charges on Bajaj Allianz Health Guard are only up to Rs 1,000.

All other charges, too, are reduced in proportion to the room rent cap. This is primarily because the charge structures levied by hospitals varies by the type of room chosen by you. But insurers are trying to do away with it. ICICI Lombard Family Protect Premier does not have sub-limits or a cap on room charges.

Policy issuer: According to health insurance experts, there isn’t much to debate here. “A traditional plan from health insurers should be the first medical policy that you buy, as these are exhaustive. Those from a life insurer can be an additional buy,” says Mahavir Chopra, head of e-business and retail, Medimange.com.

Traditional policies from health insurers or indemnity plans settle claims on a cashless basis or they may reimburse your bills. Life insurers who offer benefit plans or Hospital Cash Benefit Plans pay a fixed amount as soon as the illness is diagnosed.

Policies from life insurers offer restrictive covereage. They also have limits on the amount paid per day and the number of days the benefit can be availed. Say, you are supposed to be paid Rs 25,000 for a surgery; you will get it. But if the actual expense rises to Rs 40,000, you will bear the extra Rs 15,000.

Insurers can’t walk out of convention mid-term: IRDA

In a move that will benefit health insurance customers, IRDA has said that companies can not cancel insurance policies in the medium term. The move, sources say, is in response to complaints from policyholders of health insurance contracts that were terminated before the end of a year due to higher claims.

In a circular to all companies on this week, the Insurance Regulatory and Development Authority said not political, either fresh or renewal can be sold with a clause contrary to the rules of cancellation. The rules allow cancellation if there is fraud, misrepresentation or nondisclosure of a material fact of the insured.

However, the industry says it would be unusual not to have a cancellation clause. "Historically and internationally has been the practice of having a facility of cancellation available to both the insurer and the insured after giving sufficient notice to use other arrangements," says G Srinivasan, President, General Insurance Public Sector and head of U.S. Insurance Company in India. He said the termination clause was important in cases where the cover was based on reinsurance support from reinsurers also include a similar clause.

Pavanjit Singh Dhingra care insurance brokers said the cancellation of insurance policies due to adverse claims violated the trust policyholders. In the past there have been cases in which the offer to increase its topline, insurance companies, have acquired a group of practices is very low. However, after burning their fingers high claims have not used the escape clause.

"It is incumbent on insurers to do their homework and purchase appropriate and bear the risk of the contract. What is the purpose of insurance if the insurer can move away from risk, at its discretion? Sometimes insurance companies have been ruthless in underwriting policies and cancellation or attempted to renegotiate the terms of the insurance period which is totally unfair, and we welcome this action to protect policyholders, "said Dhingra.

Health Insurance is the Need of the Hour

Health insurance has become a necessity in today’s world. There are several reasons for an individual to have the protection of health insurance

Of all the risks which an individual household faces, health risk probably poses the greatest threat to lives and livelihoods. Everyone needs medical care sometimes and health falls with age. Sedentary life styles, hectic work schedules, long working hours and eating habits are leading to silent diseases causing rise in the number of people suffering from obesity, diabetes and cardio-vascular diseases. As per a Government of India report of 2006, morbidity rate for males is 8.5 per cent (rural) and 9.1 per cent (urban) and for females 9.3 per cent (rural) and 10.8 per cent (urban).

The other important risk faced by individuals is the risk of accident. As per a report in the National Medical Journal 2.5 million persons were hospitalised due to road accidents in 2005 and it is projected to be around 3.5 million in the year 2015.

There has been high escalation of medical costs due to advancement and high tech intervention in health, diagnosis and therapeutic procedures as well as prescription drugs. We live in a system of patent protection-a legal monopoly to pharmaceuticals that has been making the new drugs expensive and increasing the cost of care.

The explosion of knowledge in genetic engineering, biotechnology, nano-technology, medical informatics and gene therapy will further escalate the costs for most people.

As per a study of NCAER in association with Max New York Life Insurance Company, the average medical expenses of an Indian household is 6.5 per cent of the annual income and it increases sharply to around 37.4 per cent in case of major ailments. According to a study “India Knowledge @ Wharton Report” around 65 per cent of people remain in debt for life due to their expenditure on major health problems.

Health insurance is the ticket to healthcare and the best mechanism to finance healthcare to protect one’s savings, avoid debts and miseries.

National Insurance has been a major player in the health insurance segment in the country. It has in its basket 18 types of health policies to cater to the needs of the different segments of the society. In addition, the company has also been involved in the implementation of Rashtriya Swasthya Bima Policy in 50 + districts in the states of Haryana, Bihar, Assam, Tripura, Mizoram and West Bengal.

For the year 2010-11, National Insurance completed a health insurance premium of Rs 1681 crores out of the industry’s total health insurance premium of Rs 11,137 crores mobilised by 22 multi-line non-life and three mono-line health insurance companies. The company issued 14.47 lakh of health insurance policies covering 2.39 crore of persons. It paid 4.11 lakh number of claims amounting to Rs 1399 crore during the year.

Health insurance is the fastest growing non-life insurance segment and it is estimated to grow at a CAGR of 35 per cent during the next four to five years. Increased awareness, expanding aspiring class, rise in health costs, government initiated schemes like RSBY for the BPL population, construction workers and street vendors etc., have given a big boost to the health insurance segment.

The company has geared up to play a significant role in this high growth business through planned participation in the different segments like government schemes, retail and wholesale. Though losses has been a cause of concern in this business to all the players, the company plans to manage it sustainably by initiating a number of measures like proper monitoring of TPAs, creation of health cells in regional offices commanding high volumes of health business, emphasising on investigation and fraud control etc.

Health policies by life insurance companies will not be portable

Your plan to switch your existing health insurance policy from a non-life insurer to a life insurance company may not be possible, at least for now. The insurance regulator is likely to confine the portability of health insurance policies to non-life insurance companies.

“To start with, only mediclaim policies offered by general insurance companies will be portable. Health insurance policies offered by life insurance companies, which are much more complex in nature, will not come under it,” said a senior official of the Insurance Regulatory and Development Authority (Irda).

One of the primary reasons for not extending the facility is that the term of the policies offered by general insurance companies is one year. However, for life insurance companies, it is long-term, raging between three and 15 years. Portability allows a policyholder to shift the policy offered by one insurer to the other, while keeping the terms and conditions of the cover unchanged.

“Most health plans offered by life insures are indemnity policies or benefit policies, which are associated with lump sum benefits at the end of the term, subject to certain pre-specified conditions. Hence, it is very difficult to port credits, since these policies require completely different underwriting techniques,” said a life insurance company official.

“More than 90 per cent of the health insurance business is confined to the general insurance industry. Policies offered by general insurers are fixed-benefit plans and are renewed annually. This is different from plans offered by the life insurance companies. So, portability between health products offered by life and non-life insurance companies is not feasible,” said a senior official at a state-owned general insurance company.

In short, for mediclaim policies, there are no survival benefits or life covers. So, general insurance companies would not be able to service these kinds of health insurance plans, he the official said.

Another aspect is the pricing of the policies. “One of the important issues is how to price the benefits. Different companies offer different benefits to add exclusivity to their products. For instance, in the case of portability, one has to forgo some benefits. Thus, the policyholder might claim some discount, which the insurer might not allow,” said an actuary in a life insurance company. Top Engineering Colleges

Last week, the insurance regulator decided to postpone the execution of portability of health insurance policies by three months to October 1, as industry officials sought more clarifications from the regulator.

In a bid to facilitate data sharing among insurance companies, Irda had embarked upon providing a web-based facility for insurers to feed in all relevant details on health insurance policies issued by them. This data would be accessible by the company to which a policyholder wishes to port his policy. “Such a system would enable the new insurer to obtain efficiently data on history of health insurance of the policyholder wishing to port. It is necessary to enable the smooth running of the system,” Irda had said.