Introduction

A person asked God, What surprises you most

about mankind ? God - They lose their health to make money and then money to restore their health. That by thinking anxiously about the future, they forget the present, such that they live neither for the present nor for the future. That they live as if they will never die, and they die as if they never lived.

Contd.
Life is less fleeting today with increase in life

spans and life expectancies across the globe Even then , health, healthcare and healthcare costs an area of concern for govts across the world. A fast-growing business globally brings revenue of Rs 4 trillion globally In India, mostly employer-sponsored health insurance- not much public awareness about the availability and benefits of health insurance

Introduction
Health insurance an instrument for health of

economy health as a barometer of economic development HI(13%) ranks next to motor (42%), fire(17%) in non-life business.Motor and health insurance is bought, not sold. Health premiums would overtake fire insurance premiums in few years Need for products ,designs, their sustainability & structural facilities

Environment
Need for sufficient information / data for

development of good products, proper pricing and management

Lack of consumer awareness
Relevance due to break-up of joint family system Tremendous scope in future

Product Design
Need for well-designed products to protect

family savings Since claims outweigh premium, need for investment of premium by insurance co, so as to meet expenses Mediclaim - only hospitalisation cover, need for outpatient costs cover since large numbers treated without hospitalisation Need for preventive measures by providing health education and quality life.

Contd.
Incentives on health insurance by tax benefits
Tie-ups with hospitals to facilitate cashless benefits Need for products of non-patient services Educating public on diseases, treatment. Health insurance as employee benefits ? Cost-effective health insurance - low premium so

as to widen customer base.Popular in USA people ready to pay more for better healthcare Investment cum-service health service product -

Contd..
People in India mainly interested in investment

want HI to be part of savings.Link-up of savings schemes with HI.

HI products should cover causal (epidemics risk)

and usual risks (overhead expenses,business risks).

Product design and pricing key factors for

enhancing insurance high price reduces business and less price increases loss of insurer

Structural facilities
SF provided by govt.-regulatory authority guide

insurers to design insurance for healthcare.

Insurer should be allowed to approach hospitals,

doctors for getting adequate information

International Classification of Diseases good guide

for healthcare and developing SF of HI

Sustainability of products
HI products to be sustained for developing trust/

confidence of people. Insurer to adopt proper management of funds, pricing, product-design and follow regulatory features Insurers should maintain adequate risk capital to meet contingency of unexpected losses Scope of HI to include inpatient & outpatient facilities, physicians, OT, pharmacy and post discharge treatment charges

Health Insurance in India

Primarily dealt by medi-claim policies by PSU cos

in recent past. HI still in nascent stage since public skeptical about payment of services provided by companies Lack of healthcare services and infrastructure, illiteracy and lack of trust in health schemes and insurance cos have impeded HI in India Prospects of HI very bright due to escalating health costs medical inflation index provides guidance for designing product and pricing .

Contd
Insurers to make study of claims so as to

classify healthy/unhealthy lives for proper insurance management. Since health businesses one of fastest-growing segments, insurers need to develop porfolio and detect frauds.Claims -6-7% , but frauds occur. Widely prevalent problem is adverse selection of lives rampant even in US/UK.This causes cos to lose money, makes it difficult for poor customers. 94% medically insured lives do not make claims

.in India
Total expenditure on health is 6% of GDP, govt

spending is 25% . In developed countries -40% of GDP Average growth in treatment costs increasing yearly and majority of population below 35 entering an age vulnerable to health hazards. Indias first stand alone health insurance company Star Health and Allied Insurance.DKV-Apollo and LIC have also entered.

Risk management in Health insurance

Risk management is a process of loss prevention

and mitigation practiced by insured and insurer. Insurer prices products based on his perception of risk factors in the proposal form In HI, pricing done on age risk factor, excluding other risk factors Product sold is homogeneous, target group is heterogeneous. Factors like gender, heredity, lifestyles, domiciles, excessive usage of medical services, occupation and income not given credence while setting prices.

Contd
There are not many product varients like

hospitalization following accidents, hospitalization for named surgeries only, hospitalization for named diseases only.There is no product differentiation with differentiated price. Currently health business is conceived, priced, tranacted with huge dissatisfaction on part of both contractual parties . Pre-existing disease syndrome creation of insurers. 1.6 Cr policyholders, 10 lakh claimants latest data

Contd
Average premium Rs 12oo and average claim Rs

18000 claims ratio 91% Excludes distribution and management costs and insurers lose money Cos should try to analyse the claims in terms of types of treatments requiring hospitalization, age, residences of claimants. Why should 1.5 Cr claim-free policyholders be penalized by having their premium rates raised when insurers are not plugging their loopholes ?

Contd.
Insurers should consider all risk factors including

heredity.Moral hazards and adverse selection are also risks. Access to and study of data absolutely essential for risk management Since HI is bought, selling it as a commercial deal and then treating claims as a matter of accomodation is unacceptable to insurer.

Parameters for granting HI

Age generally from 5 to 80 ( New India/Reliance)
Coverage covers hospitalization expenses due to

illness/accident which includes room, operation, medicines, consultation, diagnosis, nursing, blood, oxygen charges Sum Insured should be chosen so that it fulfills needs of hospitalization Pre-existing diseases these are excluded in the first year of coverage, may be considered after 2-3 renewals.

Contd.
Waiting period is the prescribed period of first

few days or months from the DOC wherein if insured is hospitalizes, nothing payable Cashless facility Family discount in premium upto 10% Free health check-up after 4 claim-free years - by PSU insurers only Cumulative bonus -5% increase in SA every claimfree year by PSUs upto max 50% bonus IT benefit under Sec 80D- Rs 15000(individuals)

Contd.
Long-term policy by Bajaj All & ICICI Lom. Direct discount in premium if obtained from office

or through net. Specialised products critical care cover for selected diseases by ICICI Lom, Bajaj All & IFFCO-Tokio Products for specific class of people - students, families, middle-aged people, senior citizens and poorer sections of society. HENCE HEALTH INSURANCE FOR ALL .AN ABSOLUTE NECESSITY IN THESE DAYS !

THANK YOU !