HEALTH INSURANCE IN INDIA:meanningInsurance is a mechanism by which the losses of a few are met through contribution from many .It is a method of dealing with fortuitous events resulting in a financial loss . Thus health insurance aims as taking care of health related expenditure. To fall in line with the sprit of insurance health insurance is restricted to financing of curative rather than preventive expenditure. Secondly health insurance is subject to the strict principle of indemnity, where the person is indemnified with the amount which he has actually incurred.

NEED FOR HEALTH INSURANCE:-

Health of its citizens is one of the top priorities of a nation. A nation with healthy people would be able to pursue its agenda with dexterity and execute those with fine see. Total health care boosts economic growth , reduces poverty and lowers mortality rates. The success of many countries lies in their special effort to cover the entire population with a scheme of health insurance that keep them protected again unforeseen health hazards through insurance coupled with wellness program. The health insurance coverage is well established straightway. In India as also in many other countries with low per capita , the burden of having to pay for unplanned and expenditure for medical treatment is very acutely affecting large population.

World bank data suggests that even one hospitalization would be estimated to account for 58% of per capita annual spending driving 2.2 % of population below poverty line. Insurance schemes are designed to be commercially viable and therefore do not reach all sections of people. financing healthcare thus becomes a major concern for any society.

The total health expenditure in India is around 5% of gross domestic product (GDP) in which bulk funding comes from private households as mentioned above. Broadly the composition is as follows:

Centra l, state & municipal government: 20%

External donors : 1%

Private insurance& employer payment : 4%

Private households: 75%.PRESENT SCENARIO FOR HEALTH INSURANCE:

Health insurance scheme run by the state owned employees state insurance corporation up to a certain income level. Coverage is restricted as per scheme. central government health insurance scheme (CGHS) applicable at all levels including retired employees. The facility is available in selected cities / centres subject to certain limits , hence restrictive in coverage.

Health insurance schemes offered by the public sector general insurance companies popularly known as MEDICLAIM policies lanched through the general insurance corporation of India (GIC). A host of those available are as under:

-Mediclaim introduced in 1986 for individuals and groups.

-Bhavishya arogya introduced in 1990 as a retirement plan with early entry.

- Jan arogya introduced in 1996 a low cost limited benefits plan.

-Overseas mediclaim policy introduced in 1984 for people travelling abroad.

Some special policies like cancer insurance ,extended benefits of hospitalization under personal accident policies, extended benefits for people outside the scope of workmens compensation policy.

Some state government have taken health insurance policies for weaker sections under various names on the pattern of universal health insurance scheme lanched by the central government with limited liability upon specific critical illnesses. The government has also launched RASTRIYA SWASTHA BIMA PLAN and JANSHREEE BIMA plans to cover BPL families.

POTENTIABLITY OF THE MARKET:

India is about 1.2 million of population and granting that not all may not be insurable for various reasons, it makes a strong case for a potentiality of at least 50 crore plus people to be under some health insurance scheme apart from government sponsored schemes for the weaker sections. Unfortunately, even after opening of market the penetration has been poor and roughly only about 3.5 crore people are covered under various schemes as mentioned above, making the market quite big,only being scratched at the surface without being properly tapped. However , since last 2/3 years health insurance has picked up with aggressive selling coupled with awareness making it the second largest portfolio after motor insurance.

IMPORTANT FEATURES OF MARKET:

The health insurance schemes marketed by insurance companies face some other challenges worthnoting, for example :

-Absence of accreditation of providers and a rationalized cost structure.

-Adverse claims experience / high loss ratio.

-High moral hazard at various levels of service.

-Non regulated market and no control through state machinery.

-The limited government funding of healthcare programmes.

-Lack of propagation of health insurance as a health insurance among masses.

-Rising medical costs and imbalance in cost structure among service providers.

-Servicing through third party administrators (TPA) introduced with cashless entry to hospitals meeting with limited success.

CUSTOMER EXPECTATIONS :

The above shortcoming are driving the customers more demanding forcing the companies to fine tune their products. Broadly the customer expectation are as follows :

-Premium should be affordable, renewals guaranteed and premium should not be loaded for claims experience.

-Nobody should be denied insurance cover irrespective of age of entry.

-Medical costs should be kept under control and excessive billing to be monitored.

-Preventive treatment for better health should be covered as claim management.

-Easy access to healthcare facilities and treatment through providers.

-Flexible and wide ranging products without too many restrictions.

-All pre existing diseases to be covered.

-Domicillary treatment to be paid for.

-Meeting all demands of society including catering to the poor.

ROLE OF REGULATOR:

Indias insurance sector is both a regulator and a developer of the market to be called insurance regulatory and development authority (IRDA).As mentioned above, apart from promoting and developing the market overall including health insurance , the regulator has some concerns that need to be addressed. The examples are :

-Creating a positive business environment for health insurance companies.

-Clarifying the legislation and regulation of health insurance.

-Providing information to consumers on health insurance.

-Creating an environment for standardization of data.

ROLE OF TPA:-

The year 2001 saw the advent of the third party admintrators. They were regulated by IRDA and mandated to provide health services.the claims servicing was now outsourced to the TPAs, at a remuneration of 6% of the premium collected. As on date twenty seven TPAs are in operation.

It was felt that introduction of the TPA will benefit the ultimate clients. The customer had an option to opt for TPA or otherwise. The objectives of introducing TPAs were to improvise on customer services, and also bring about a reduction in the claims ratio by greater pro active involvement in the area of claims. However, this estimation proved wrong with claims ratios increasing further and the number of customer grievances rising.

THE INSUREDS PERSPECTIVE:

The customer relates himself to the office to which he has paid the premium and finds dealing with the TPAs do not treat the insureds with the same sensitivity as the company that has collected the premium. The personal touch expected by the insured is missing. Right from non receipt of identity cards (without which cashless cannot be availed) and dealing with faceless toll

Free numbers that seldom respond, the insured is faced with a plethora of problems. The only positive reason for having opted for a with TPA policy is for a cashless facility, for which he has paid an extra 6% as service charges. Many times, the cashless is denied for reasons that are beyond the control of the insured.

THE INSURERS PERSPECTIVE:

The personal touch with the customers is lost. The personnel involved in health claim processing have been allocated jobs and hence reversal of the system is not easy.apart from grievances regarding non settlement of claims , complaints about non receipt of ID cards and non availability of the 24 hours toll free numbers of the TPAs are plaguing the insurers. Insurers also feel that the TPAs do not wield adequate bargaining power with the service providers.

THE TPAS VIEWPOINT:-

The TPAs complain that the data flow from the underwriters is not up to date and up to mark. The second common complaint is non receipt of float funds on time.

The third complaint is that the marketing considerations that guide the insurance company are not known to them and they all the claimants on par. They feel that they have to juggle between controlling the claim costs without antagonizing clients.