Get complete information on Health Insurance

Get complete information on Health Insurance

Health Insurance has been real used as an instrument for the health of the economy. If the people of the country are healthy, they can contribute significantly in the economic development of the country. The health insurance industry would provide protection to social development.

The insurance industry should come forward to provide health to the masses like life insurance and property insurance. The Government provisions for health have not succeeded for want of initiative on the part of government officers and beneficiaries.

It is hoped that commercial bases of health insurance will be more suitable for health development of people. There is need of products, designs, structural facilities and sustainability of insurance products. Adequate environment is to be developed for the introduction and development of health insurance.

Environment :

Health insurance requires sufficient information and data for development of a good product, proper pricing and health management. Many insurers are interested to provide health insurance provided consumers are properly educated in this area.

Recently with the break of joint family system, the need of health insurance is more thrusting. Maintaining health responsibilities on commercial basis to insurance companies, economic growth, human resource development and prosperity will enhance in future.

Product Design :

There is need of well designed health insurance product that may protect family savings in case of unexpected medical charges. People are interested in higher achievement than paid by them in the form of premium.

Insurer therefore is expected to invest the premium money in such a way as to earn sufficient money for meeting the expenses of insurance and insurance claims. Insurer has to meet the challenges of expenses and health services. The insurance cover should be reasonably comprehensive without counterproductive gaps.

Mediclaim policies provide coverage of medical services rendered during hospitalisation. But, there is need of broader set of services. There is need of outpatient costs because a large number of persons are treated satisfactorily without being admitted in the hospital. Health insurance should cover all such types of expenses.

The third need of health insurance is preventive measures by providing health education and quality life. Premium may be reduced on such types of proposals.

Additional incentives should be provided for purchasing health insurance. The tax exemption on health premium and medical saving accounts are few of the examples of financial incentives for health insurance.

The alternative choices should be there for selecting suitable hospitals nearby the insured persons. There is need of new products of non-patient services. The premium should be competitive and fair to the policy holders.

Educating to consumers about health consciousness is very essential in health insurance. It increases people’s awareness of diseases, cost of treatments, alternative treatment options. People should know quality of health and health care services. Employers should be motivated to provide health cover to their employees.

Like group insurance and group superannuation; employers should purchase policies for their employees and pay the premium. It enhances the images of the organisation.

Cost Effective Health Insurance:

The product of Health Insurance should be designed in such a way as to reduce cost of premium. The insurer should design the product to attract more customers. People should get incentives to purchase health policies.

Low premium rate attracts a larger number of persons to purchase health policies. The developed nations have popularised the health insurance as the insurers meet the most expensive treatments. People are ready to pay higher premium to meet the high cost of medical bill.

Investment cum Health Service Product:

In India, people are interested mainly in investment. They went that health protection should be part of savings. While saving schemes are spreading Health Insurance should be linked with that. If people get health cover with a slight deduction of money from their saving rate, they would not mind as it becomes a regular feature after some time. They will fell that health cover is given free of cost.

Product of Causal and Usual Risks:

Health product should cover the casual risks such as epidemics risk and claims uncertainty risks and usual risks e.g., overhead expenses, interest and other business risks. With the past experience of claim payment, insurer should design a number of suitable policies to meet different requirements of the customers.

Product design and pricing are key factors for enhancing insurance. High price reduces business and less price increases loss of insurer. Therefore, proper balance is established with the help of data analysis.

Trust and Confidence:

The insured should have trust and confidence in the insurance company that premium rates are at the lowest possible and they will get the claim amount at the time of need.

The insurer should influx the confidence of solvency, proper risk selection, reasonable cost of operation and timely payment of claims. Solvency plus financial and operational performance monitoring will be essential.

Structural Facilities :

The structural facilities are provided by the government. Regulatory authority properly guides the insurer to design insurance for health care.

The insurer should feel free to approach hospitals, doctors physicians and others forgetting adequate information. International Classification of Diseases-1Oth Revision (ICD-IO) and Procedure Classification System (PCS) are good guide for health care and developing structural facilities of health insurance.

The health insurance reduces the charges for health care. The structural facilities of health care are told to the insured on websites and electronic format. The insurer should assure that reimbursement for their services are fair and sufficient. It will cover all the costs of medical treatment. The possibilities of litigation are minimised to provide confidence to the insured’s.

Sustainability of the Products :

The insurance products should be sustained for developing the trust and confidence amongst the policyholder. The insurer has to adopt proper management of funds, pricing, and product-designs and follow the regulatory features. A facility of electronic data is crucial for long-term success of the insurance industry.

It will improve efficiency of the employees who will provide quality services to the insured’s. The insurers maintain risk capital for meeting the contingency of unexpected losses. The scope of insurance cover is expanded to include impatient, outpatient facilities, physicians and pharmacy charges.

Health insurance as a class is very young in the Indian insurance. But, it occupies the third place among the different non-life insurance classes. It has registered more than 50% rise in 2006- 2007. While non-life insurance business increased only by 10%.

However, health insurances have not received more attention because the customer’s awareness is very low. The insurers should make the classes very explicit and explain the exclusions in detail. The role of Third Party Administrators should be effectively ensured by them. They should take care of the customers’ interests. Retailing Health Insurance

Retailing health insurance requires products innovation channel innovation, risk based pricing and prevention.

Causes of Low Level of Health Insurance :

In spite of health insurance provided by public sector insurance companies as well as private sector insurance. Only 2 per cent of the population is covered under health insurance schemes. The causes of low level of health insurance are:

1. Low level of awareness of the common public.

2. Limited insurance products to cover health problems.

3. Low level of medical facilities.

4. Moral hazard.

5. Adverse selection of underwriting process.

6. Insufficient data and information.

7. Variation in costs of insurance.

The unorganised sector workers below poverty line (BPL) and their families are proposed to be covered under Rashtriya Swasthya Bima Yojana (RSBY) during the next five years (2008-09 to 2012-2013). The coverage of health services is on a daycare basis, cashless coverage of all health services, provision for pre and post-hospitalisation expenses for one day prior and 5 days after hospitalisation and provision for transport allowance.

Product Innovation :

Individuals face a number of exposures driven by health and health-related events and costs, the risks of which they can bear to differing degrees. These risks range from low ticket-size expenses (e.g., for routine care) to higher ticket-size discretionary expenses (e.g., for elective surgery), catastrophic expenses (e.g., due to major illness, accident), end-of-life care expenses (e.g., due to life threatening illness), expenses related to chronic diseases and income risk (e.g., disability).

Channel Innovation :

Health insurance products are likely to require additional distribution channels beyond the dominant agency force. Based on the U.S. experience, several innovations hold promise:

i. Direct-response channels. These include a captive sales force, call centers, the Internet, direct mail, and television commercials. A leading U.S. player primarily uses the Internet, for example, to sell a product aimed at consumers aged 18 to 29 (“young invincible”) who think they do not need health insurance.

ii. Retail stores. Health insurers in the U.S. are now offering health benefit products through leading retail and pharmacy chains. One of the biggest success stories for payers has been selling Medicare-related products to the elderly through bricks-and-mortar retailers.

iii. Affinity-marketing relationships. Health insurance has entered successful affinity partnerships with diverse players.

Risk-based Pricing :

Product and channel innovations alone are not enough, Health insurers need to understand the risk profile of individuals and their ability and willingness to pay, which often varies by segment and channel.

Actuaries could determine now consumer behaviour would change a priori and build that into product pricing rather than wait for years to study observed behaviour, they could benefit from substantive gains.

Insurers in the U.S. have leveraged detailed data to build sophisticated actuarial models that are more powerful by a factor of over 1,000 relative to competitors.

Insurance Coverage beyond Hospitalization Benefits :

Private sector group and individual health insurance coverage in India today focuses on hospitalisation benefits with a limited sum assured. While this provides valuable coverage, preventive care techniques are important to improve medical outcomes and to provide cost-effective health insurance.

In India, there remains a huge need for simple primary prevention that largely falls into the public domain. However, the private health insurance can make important contributions at the secondary and tertiary prevention levels.

Primary vs. Advanced Prevention :

In assessing the cost-benefit equation of a number of techniques and determining who is best positioned to provide these services it is helpful to distinguish between three levels of preventive care:

i. Primary prevention entails reduction in the level of one or more identified macro risk factors to reduce the probability of the initial occurrence of a disease. Examples include road safety, clean water, food fortification and vaccinations, which are typically Government-led.

ii. Secondary prevention aims at detecting a disease at a very early stage to prevent or delay its progression. Examples include screening programme for cancer and diabetes, which could be provided for and funded by the private sector.

iii. Tertiary prevention consists of ongoing interventions aimed at decreasing or delaying the severity and frequency of recurrent events of chronic or episodic diseases.

Examples include family-oriented disease management therapies for cardio-vascular diseases, or disease management programs for diabetes patients, where again the private sector can play an important role.

WHO statistics indicate that 8 million people die prematurely every year in India from diseases that are relatively easily preventable, if certain primary preventive measures were adopted by the public authorities.