Volumes can result in reduction in health care costs

Fortune India in their October 2010 issue has covered a detailed write up on Medanta Hospital, Gurgaon and it has some interesting facts.



Medanta has ambitious plan to increase the number of beds ultimately to 1800 beds. This will lead to efficiency in use of equipment / resources and this is the reason why Medanta is charging 15% to 60% lower than what other hospitals are charging. These facts support the fact that Large hospitals can be competitive.

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Medical bills contribute towards 62% of bankruptcies among families

Harvard University in USA has collected data for 2007 and has come out with the study that medical bills contribute towards 62% of bankruptcies among families.

We are assuming that this study was focussed on US families.Our estimates are that even in other countries the similar figures are applicable.Recently we have come across a family in Delhi which had to sell their 2 properties to pay for kidney transplant. They had no other alternative as they were not having any health insurance.In the legal terminology this family has not gone in for bankruptcy but selling of 2 properties and moving to a rented house is same thing.

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Ayurveda, Unani, Siddha , Homeopathy have started getting recognition

Over period of time we have propagated due recognition to be given to Ayurvedic / Homeopathic /Unani/Siddha system of health care,which is used by crores of persons living in different parts of India.In our country we are having over 250 Ayurvedic Medical colleges.It is good to notice that HDFC Ergo Health Suvidha policy pays for medical expenses for inpatient treatment under Ayurveda, Unani, Siddha or Homeopathy. It pays upto 20% of Sum Insured; Maximum Rs. 20,000 (for Policy Sum Insured 2L & 3L) and Rs. 25,000 (for policy Sum Insured Rs. 4L).

This amount is less but we appriciate the beginning.We do hope other Insurance companies will also start coverage under Ayurveda, Unani, Siddha , Homeopathy system of treatment.Why not have a policy which is only for Ayurveda, Unani, Siddha , Homeopathy.Why to charge someone (who beleives in treatment under these syatems) for 100 and give benefit of 6 ( Rs. 25000 against sum assured of Rs 4 lakh)

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Pay higher premium to avail treatment in good /super speciality hospitals

Yes. Paying lower or normal premium and getting treated in good/super speciality hospitals will be a history in 2011.Either you will forget about good/super speciality hospitals
or
you will pay higher premium.

Time has come to relook at your policy - should it be renewed with same PSU or to a different Pvt insurance company or health insurance company

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Heart Diseases are responsible for maximum number of deaths

Civic run Hospitals in Mumbai have compiled data for 2001- mid 2010 period and 97677 persons died during this period due to heart attack/ailments. This is 34% or total deaths across these hospitals over the period.

According to Dr Pavan Kumar Consultant Cardiologist of Lilavati Hospital the reasons for heart attack can be.

• Poor Oral Hygiene
• Malnourishment
• Lack of adequate vitamin B-12/ Folic Acid in the diet
• Social Stress due to work pressure


According to Dr Brian Pinto, another authority and affiliated to Holy Cross Hospital the reasons for heart attack can be

• Not loading much physically active life
• Eating unhealthy foods

Costs related to hospitalization due to heart ailments in good hospitals are high and may be in the range of Rest. 1.50 lakhs to Rs. 5.00 lakhs .This fact should be kept in mind while buying health insurance. Sum assured of Rs. 1.00 lakh may turn out to be too less when the bill comes out to be Rs. 3.50 lakhs or Rs. 5.00 lakhs.

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Yes medical expenses can be high

According to news paper reports Punjab Chief Minister medical expenses for 2 months were Rs 85 Lakhs.

This proves that medical expenses can be high. It is better to plan by buying health insurance unless you are a Minister/Chief Minister like Punjab Chief Minister as mentioned in this news.

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We knew it will not happen on Sep 17,2010

In the International Health Insurance Summit ( organised by CII)held on Sep. 9 & 10,2010 in one of the panel discussion attended by high ups of Health care providers /Insurance companies ( mainly PSU) it was agreed that agreement to resolve the PPN issue will be reached by Sep. 17,2010 .This is necessary so that inconvenience is not caused to policy holders ,who are suffering since July1,2010.

We knew this agreement will not be reached because gap in expectation by both parties is too much.Healthcare providers are ready to give a discount of 5 to 7% but this is not at all acceptable to PSU insurance companies.This issue has complication that if the Good/super specilaity hospitals agree to the need of PSU's they may have to give same terms to Private Insurance Companies.That will affect the financial projections of health care providers who have got funding from investors,banks,PE funds and VC funds.This may also bring down price of the share in the stock market and hence the wealth of the promoters.

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Pvt companies to follow PSU's health insurance PPN package rates

Is it a cartel ?Is is competition?While the Indian customers are confused with what has happened since July 1,2010.We hear Pvt Insurance companies are also going to follow PPN pacage rates finalized by PSU's with hospitals in 4 metros.While customers were thinking of switching over to Pvt companies when the renewal will be due,this news is definitely a disheartening news .

Is it that PSU's acted as the leader and Pvt companies have been following them.

We understand premium products are going to be out -premium is going up.We were always of the view that premium should be always at the right level.Fix it at right level and treat the customer with respect ,which he/she deserves.

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Bajaj Allianz has also increased premium rates for Health Insurance

Bajaj Allianz has also increased premium rates for Health Insurance.

Sometime back Reliance General Insurance Co. Ltd. had increased the premium rates for health insurance.

Bajaj Allianz General Insurance Co. Ltd. has announced increased rates and with this, their rates are 20% higher than that of premium rates of Reliance General.

Let us see comparison of old rates vs. new rates of Bajaj Allianz for a family floater policy where the age of head of the family is 32.


Let us see the comparison of Bajaj Allianz rates with Reliance General/Max Bupa


You may be surprised to see increase of the order of 20% but I was expecting this to happen for quite sometime.

As mentioned earlier in one of my earlier blog no insurance company can go on losing money for a long time as ultimately the shareholders want return on their investment.

As the companies have started getting ready for IPO as well as to release / figures in press (every 6 months) / website (every 3 months) this was expected to happen.

We understand that PSU’s are also going to release new rates where they will call the product as premium product where cashless treatment in good hospitals will be permitted. We expect the rates to be at par with rate of Bajaj Allianz General Insurance Co. Ltd. Let us wait for the announcement.

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We are spoiling the image of Health Insurance Industry

Decision of TPA's to go for legal action/Competition Commission /IRDA against 4 PSU's tender for TPA JV is resulting in spoiling the image of Health Insurance Industry.

The newspapers /electronic media are covering it as it is their business to do news coverage.

We are not realising that this is leading to customers losing confidence in the industry.

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Cigna USA is ready to come

It is a welcome news that Cigna Health Insurance is ready to enter the Indian market and is having discussions with many banks.
PNB is one of the banks.Can we say that health portfolio will become profitable in near future ?

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Health Care providers bargaining with Insurance companies -Is it affecting the image of Indian Insurance companies

The news papers and TV channels are covering the news of neogotiations going on between healthcare providers/TPA/Insurance Companies (4 PSU's).Waht apperas in the morning newspaper is contradicted during the day on TV.

Is it not bringing down the reputation of healthcare providers/TPA/Insurance Companies?

They are not realizing what the customers are talking about them.Their reputation has come down by 50% since July 1 ,when the controversy started.

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Should PSU's have a common TPA or they should create a subsidiary

Should PSU’s create a common TPA or they should create a stand alone health insurance company?

Creation of a common TPA is not looking at the future. The right thing for the PSU’s will be to set up a JV company (ownership being shared by 4PSU companies, may be 25 % each) and then have in house claim settlement department. If Bajaj Allianz, Star and others are having success in house claim settlement department then this company (let us say for discussion sake GIPSA Health Insurance Company Ltd) can also have in house claim settlement department, strong Business Development Department to negotiate with Health Care Providers, Medical Devices Manufacturers, even Pharma suppliers so that they can have economies of procurement, use of technology to best possible extent. With the first year target of Rs 10,000 crores this company will be strong enough to negotiate and emerge the trend setter for growth of health insurance industry in our country. What NTPC did for power generation and BHEL did for Power Generation Equipment can be expected from this strong health insurance company.

We feel JV TPA with any one who is selected will not work as TPA Company (26%) will be the driving force or 4 companies who will jointly own74% .This option is not going to work.

The only successful model will be a stand alone GIPSA Health insurance Company. This strong company manned by those who specialize in health insurance, who are dedicated to make career in health insurance, who have passion for health insurance will be the solution. In 5 yrs this company can reach level of Rs 25,000 crores, may be Rs 40,000 crores.

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Premium Health Insurance Product will have the same features which you were getting prior to July 1,2010

Those desirous of availing healthcare facilities of reputed super speciality hospitals may have to buy new products in near future .It is natural that premium rates for these products will be higher.PSU's will be introducing new product in near future.

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Private Business houses owning own Insurance companies bought group health insurance policies from PSU’s

It is interesting to note from Government auditor CAG that public sector insurance companies have incurred huge losses on group mediclaim policies because of

Their lackluster attitude in adopting a standard rate for medical services.

According to the report during the three years (2006-09), the four PSUs suffered a loss of Rest 417 core from individual portfolio and Rest 622.49 core from group policies.

The CAG said that the premium earned by the four insurance companies nearly tripled to Rest 3,696 core in 2008-09, from Rest 1,321 core in 2004-05. It also said that some of the big corporate houses, despite having their own group company in this sector took policies with PSU insurers.

The report said that against Rest 11.74 core premium collected from IT firm TCS; claims paid only for domiciliary hospitalization were Rs 71.64 crore. "Despite its own group company being in the health insurance business, TCS, Tata Motors and Tata Power went for group policies with PSU insurers," it said.

The insures should have increased the premium of the policies when they come up for renewal every year, but "the four insurance companies did not do this in respect of group policies resulting in a loss of premium of Rs 329.68 crore for three years ended March 31, 2009," it said.

The report said the group policy holders were given additional benefits such as maternity, baby day one care, preexisting diseases among others, without charging additional premium. The CAG also pulled up the insurance companies for failing to monitor the quality of services offered by the TPAs to the insured, which in turn impacted customer satisfaction.

Let us see what will be the impact of this report.
Will it result in hardening of premium rates? Yes definitely this is going to happen.

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HOW TO ENSURE A SMOOTH CLAIM SETTLEMENT IN CASE OF EMERGENCY HOSPITALISATION

This article is a welcome news for the timebeing .Emergency /accidental cases will be treated in hospitals.We suggest you use this article as a reference.You may point out last stanza of this news to PSU or the TPA.

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Most of the problems of insurance companies and healthcare providers will be solved by August 10,2010

Every one is talking about the controversy which started on July 1,2010. Yes it started with names of about 800 hospitals being deleted from the list of empanelled
hospitals.

Meetings are going on between insurance companies and health care providers and you can expect solution of the problem by August 10,2010
Let us hope for the best.

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Insurance companies to buy medical devices and medicines at wholesale /negotiated rates to save money

It is nice to know that Insurance companies will now be buying devices like stunt/pace maker at whole sale or say negotiated rates from manufacturers with a view to save on their claim costs.

It is also laernt that hospitals have been buying medicines at whole sale rates and were billing to the insurance companies at retail rates.This practice will also stop.

Any steps taken by the insurance industry to reduce the claim cost is welcomed.Let all of us support this initiative.

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Where to lodge your insurance related grievances?

Where to lodge your grievances?

Various options available with any consumer in India are to lodge complain

1. Grievance cell of Insurance Company (after pre empting your phone calls/ visits to their branch, which issued you the policy )
2. Insurance Ombudsman
3. Consumer Forum (at District level, State level and National level)
4. IRDA, which is the new addition.


We welcome the service started by IRDA(insurance regulatory and development authority. But the question before us is why we should have too many authorities for grievance resolutions.

Is it not the responsibility of the Insurance Company to provide service as a part of the product? Why they do not show the name of Grievance Officer, phone no/email on their website. Why they do not have online grievance lodging facility?

The consumers will like to have the data- how many cases lodged against the company in Consumer Forums? How many have been decided? How many have gone in favour of the insurance company and how many have gone against them?

Should there be a fee for lodging a complaint so that incomplete complaints are neither lodged nor received.

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Doctors, not insurance cos & TPA’s will judge urgency of cases

Yes there may be time lag of 10 years in coming of the judgment but it is heartening to note that Maharashtra State Consumer disputes Redressal Commission has agreed that it is the doctor ,who has to decide whether it is emergency or not. It is good that this will not be for TPA’s to decide whether it is emergency or not.

It is interesting to note the observations

“An insurance company’s officials are not experts who can decide whether a particular case is of medical emergency or not, the Maharashtra State Consumer disputes Redressal Commission observed while ordering an insurance company to pay Mediclaim to a Versova resident. It is for the expert doctor in the field to give an opinion if this is case of medical emergency or not, the commission stated in its order. The case dated back to 2000. Shamim Khan was working as a schoolteacher in Jeddah, Saudi Arabia. It was during a visit to India in July 2000 that she suffered unbearable stomach pain that led to severe bleeding.


She also experienced breathing problems and her haemoglobin levels began to drop considerably. Khan was admitted to Bombay Hospital immediately where an emergency surgery was conducted. She was discharged after eight days of stay in the hospital and, after incurring a total expenditure of Rs 41,158, Khan lodged a claim for insurance with the New India Assurance Company Limited from whom she had taken a policy. The policy was in force from April 2000 to March 2001.

Kahn’s claim was, however, rejected on the ground that there was no emergency need to undergo the operation” Aggrieved by the repudiation letter she filed a complaint in a district consumer forum, where the insurance company argued that “she (Khan) knew of the illness even before she came to India and had purchased the policy by suppressing material facts of her illness”, son it had the right to repudiated the in surer pleaded.

Khan had, however, procured a doctor’s certificate to the effect that there was an emergency situation and the doctor was required to operate on her to save her life.

Based on this document, the district forum on July 7, 2007, directed the insurance company to pay the medical claim and also Rs 5000 for causing mental harassment to Khan.

The insurance company then filed an appeal against the order in the state commission. But the state commission agreed with the district forum’s view, saying “doctor’s certificate proved beyond doubt that this was clearly a case of medical emergency”.

The commission, while up holding the order of the district forum, added that the insurance company had wrongly repudiated Khan’s claim.

The order- coming at a time when insurance firms are desperately trying to whittle down expenses on claims –will spread cheer among the insured, feel consumers; organizations.

The name of the insurance company was not mentioned in the news which appeared in a leading newspaper .If you know the name of the insurance company then do let us know.

While we respect and appreciate the judgment –it will be better if the fine imposed on such co is higher, because Rs 5000 is a negligible amount for large insurance companies.

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Diabetes and BP can’t be cited to reject claim of health insurance claims

Our health insurance providers have used diabetes and hypertension as 2 holy words to reject the claims of insured persons. It is very interesting to read the following news in The Times of India on July 23, 2010

“In another blow to a medical insurer hell-bent on rejecting a policy holder's claims, a district consumer forum has decreed that a cardiac patient cannot be denied his insurance even if he has not mentioned hypertension and diabetes as pre-existing ailments.

"We have taken the view that, in a large number of cases, diseases like hypertension and diabetes are so common and are always controllable... (so) unless a patient undergoes a long treatment, including hospitalization and undergoes operation in the near proximity of taking the policy (sic), (s/he) cannot be accused of concealment of facts," the forum said, while asking the insurer to honour the policy holder's insurance claims and also pay him Rs. 5,000 as compensation for mental agony.


In 2003, Mulund-based Karunakar Shetty underwent a "coronary arteries bypass grafting" surgery and ran up a bill of Rs 2, 53,553. On July 17, 2003, he intimated Oriental Insurance Company Ltd Co and Raksha TPA. Shetty had taken a policy in 2000 for Rs 3 lakh but, while renewing it in 2002 and 2003, the amount was reduced to Rs 1.5 lakh.

In November 2003, Raksha TPA informed him that his claim was rejected as he was suffering from hypertension even before he took the policy and hid this from the insurance company. Shetty, however, contended that he did not suffer from hypertension before he took the policy and even sent a statement from his family doctor to the insurance company. But they did not reconsider their decision, prompting him to file a complaint in the forum citing deficiency in service.

The insurance company denied the allegations and said that in 2003, while renewing the policy, Shetty mentioned that he did not suffer from any pre-existing disease. It even stated that, when the papers were submitted, the third-party authority got documents from a hospital that said Shetty had told them he was suffering from diabetes for the past four years.

The insurance company alleged that the statement submitted by the family doctor was false and argued that the heart ailment that Shetty suffered from was closely related to diabetes and this was not covered by the policy.
The forum, while passing its order took into account, the hospital discharge card that Shetty had submitted following his treatment in July 2002. From the discharge card and the report submitted by the family doctor it was evident that Shetty was suffering from hypertension and diabetes and he got to know of it only in 2002.

The forum observed that Shetty was unaware of the disease when he took the policy in 2000 and, even if he did not mention it in 2003 while renewing the policy, hypertension and diabetes could not be called ‘pre-existing diseases.’

The forum then directed the insurance company and Raksha TPA to jointly or individually pay Rs 1.5 lakh (the insurance amount) with an interest of 6% from November 2003.”

We would have been happier to know the name of the Insurance company .If you know it then do let us know.

Learning from this case is that client was having complete medical file to fight the case and to prove his point to the consumer forum. We have always suggested to you to maintain your medical file.

Diabetes and BP have been the bottleneck in the growth of health insurance .With a view to follow this judgment in the spirit –why not take a liberal view and increase the number of insured by taking these 2 diseases as a way of life for us.

We honour the judgment and with due respect wish to state that 6 % is too low interest to be paid. This should be 12 % which all of us pay. In fact large insurance companies can pay more than this.

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L&T General Insurance will also be dealing in Health Insurance

L&T General Insurance will become operational in Sep/Oct 2010 and will also be handling health insurance. It is good news as the market is growing and naturally we expect more players to come in.

This company is 100% Indian owned company and will be using TPA’s in the beginning.

According to sources this company will also be setting up its in house set up for handling health insurance claims and will ultimately stop use of TPA’s. We support good service to the clients whether it is provided through TPA’s or without TPA’s

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You must check whether hospital is still on the list of insurance company for cashless settlement or even reimbursement

Yes our confidence is shaken .Many of you bought the policy after verifying the list of hospitals which were having empanelment with that insurance company.In between that is from July 1 some of these hospitals are removed from the list.
In Delhi /NCR the names are
Apollo,
Fortis,
Ganga Ram,
Max
Medicity
++

Check the list before starting any treatment.It is the best way to avoid surprise.

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All PSU's will be using common TPA

We had covered in the past that KPMG was appointed by 4 PSU's to advise them about a common TPA with a view to protect their interests.

Yes it is going to happen.It may be 1 TPA to be selected by all of them so that they can give good service to them ( 4 PSu's).As it will be a good business therefore naturally all the instructions of PSU's will be followed.

Let us wait for many things to happen.With big hospitals being deleted - Is it going to be market segmentation where HNI's will start moving to private companies like Max Bupa /Apollo Munich .

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Why the newspapers do not reveal the name of the hospital

The Times of India has carried the following news

"Twenty-eight-year-old Javed Akhtar, who was recently admitted to a private hospital, agrees with the TPAs. Last month, Akhtar, who works with a private firm in Noida, met with a minor accident and was admitted at a city hospital. He gave his cashless policy number to the hospital for necessary approval from the TPA. To his horror, he found that the hospital had applied for a spinal surgery and had got Rs 80,000 cleared from the TPA.

"The doctor never got any diagnostic tests like CT scan etc done. I was not even told about the surgery. They took the approval by forging my signature," alleged Akhtar, who later refused to get operated and got a police complaint registered against the hospital. But as he didn't get operated, the TPA refused to clear the bill. '

The question before us is that if the newspaper has carried the news( we appreciate this ) then why not reveal the name of the hospital so that all the insurance companies and TPA's as well as insured can keep the name of the hospital in mind- whether to go there or not.It will be agreat public service.

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Should you be treated by the best doctor or a team of good doctors

Harvard Business Review in its April 2010 issue has covered health care in detail.After reading this and thinking over it for sometime we feel that it is better to be treated by a team of good doctors as it is ultimately the team effort in the hospital, which matters.

May be you will consider it while deciding which hospital to go for,when the need arises.

Another good point which emerges is do not waste time and money in going for second opinion as you will ultimately choose the one which suits you.Try to get both the doctors at the same time and let them discuss your case .It is a matter of life and death for you.

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Prestigious hospitals have started moving out of PSU insurance companies approved list

The change is coming and PSU's have deleted some of the prestigious hospitals from the approved list of hospitals.

A question before us is -Is it applicable for group policies also or this is another decision only applicable to retail customers comprising of families.

You must recheck the names of hospitals not on the list of approved hospitals before buying or renewing the policy.

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Should you buy insurance from a corporate agent?

Should you buy insurance from a corporate agent?

Yes, you can buy but you must check that it is not one of the 4261 corporate agents whose licence has been cancelled by IRDA, the regulator.

The following news item is an eye opener for those who have to buy the insurance.
“The Insurance Regulatory and Development Authority (IRDA) has said that as many as 4,261 corporate agents, out of the total 7,000 in the country, are not authorized to sell policies from March 31, this year.

The IRDA, which displayed the names of corporate agents that were banned, cautioned the insurance companies and general public not to transact any insurance business through them.

The list of banned agents includes HDFC Bank (General Insurance), Oswal Consultancy, India Bulls Insurance Advisors Pvt Ltd in Mumbai; Prosoft Technologies and Tangent in Bangalore; Rishab Investments and Cosmos Financial Services in Chennai; Pact Brokerage and Atluri Travels in Hyderabad.

"These corporate agencies were due for renewal on or before March 31, 2010 but have not been renewed till date. All these agency licences have been withdrawn," IRDA said in a circular on Tuesday.

According to a senior IRDA official, the policies purchased after March 31 and till date could be valid and the full implications are being worked out.

The business is likely to hit as almost all life and general insurers including Life Insurance Corporation of India engaged these agencies.“

Is it that many of the MLM companies are also affected?

Comments are invited.

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Lodge your health insurance claim within 7 days Timeframe to Submit documents for filing Health Insurance claims reduced to 7 days from 30 days

You must lodge your health insurance claim within 7 days Timeframe to Submit documents for filing Health Insurance claims reduced to 7 days from 30 days.

You are familiar with the clause which permitted you or expected from you that your health insurance claim should be lodged within 30 days. No one noticed that this clause has been amended to 7 days because claims submitted up to 30 days were continuing to be paid.

Now, in an abrupt move, we understand that insurance companies have suddenly decided to strictly implement the 7 day condition. They have informed the TPAs to treat claims where documents are received after 7 days from the date of discharge as untenable.

You are required to follow this 7 days clause with a view to protect your interest.

We feel that there should be a joint campaign by all insurance companies offering health insurance for the information of policy holders and a separate letter should go to each and every policy holder to make them aware of this clause being implemented.It will keep the number of cases going to Consumer Forum Courts under control.We are sure Consumer Forum Courts will support the policy holders on this issue.

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Facts Indian Health Insurance 2010

Facts Indian Health Insurance 2010

IRDA has released statistics pertaining to Indian Health Insurance Industry for the year 2008 -09 and some of the facts are:
This is the truth. If you do not agree the do let us have your comments.

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Health Insurance Policy with sum assured of Rs 50 Lakhs seems to be a favourite number of Indian Insurance Companies – Yes the time has changed

Health Insurance Policy with sum assured of Rs 50 Lakhs seems to be a favourite number of Indian Insurance Companies – Yes the time has changed

Max Bupa made the beginning in our country by coming up with Health Insurance Policy for maximum sum assured of Rs 50 Lakhs and within few weeks it has been able to sell 15 policies. This shows that there was an unfulfilled demand for such product. May be the initial success of this product has appealed so much to other insurance companies that now we hear:

•New India Assurance
•Apollo Munich
•Iffco Tokio

all of them have started working actively for coming up with similar or a competitive product. An improvement being considered by New India is that its product will not be a normal domestic product (only within India) but will also be valid for overseas treatment.

We welcome this move to upgrade the Indian customer by offering premium product to him.

We have questions before us:

(i) Under the name of Medical Tourism USA Insurance Companies are sending their patients to India which shows that Indian Health Care industry has achieved certain level of acceptance in the world and is economical also.

(ii) Under New India policy- will HNI’s of India start going to foreign countries during summer season for treatment under the policy. Will the travel expenses be also paid as part of claim? If we are charging higher premium let us charge something more and include this facility also. This is the wish of many potential customers, who talked to me in last 2 days.

(iii) Is it worth while to have a product where few hundred policies are to be issued during the year? Will these polices be handled by same TPA’s or a special team will be set up.

If you have some more questions do let us know. We will be pleased to have your comments.

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Yes difficulties are being faced by portability of health insurance

Some time back I had mentioned that we went on hearing for portability of mobile phone numbers and nothing has happened for many years.The players come out with some excuse and it gets deferred.

Let us hope this does not happen with portability of health insurance.

The proposal received by the Regulator has the following conditions ;
Sum assured Rs 1 lakh only
Entry age -upto 40 only

We understand that Regulator wish is

Sum assured upto Rs 2 lakh
Entry age -upto 60 years

Proposal is going back to General Insurance Council.Let us hope it comes back with improved conditions in a short time.

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Portability of health insurance

As predicted by us vanilla product will be introduced by all general insurance / health insurance companies in near future as the product details are being sent to IRDA. New health insurance product to be sold by all companies will have following features:

•Max sum assured – Rs 2 Lakhs only

•Preexisting diseases will be covered after 4 years

•Max entry age will be 65 years

•No claim bonus – Reduced premium or increased sum assured will be given. Companies like Oriental will have to change their policy of not giving benefit to the customers as far as this policy is concerned.

•Indicative premium for Rs 1 Lakh – up to age 18 years will be Rs 1000, which means that we are sticking to existing rates. We can expect Rs 1400 for someone who is in the 18 -35 age bracket.

•To be introduced by all companies. We feel Max Bupa may not come out with this product. Let us see what will be the stand of Regulator (IRDA) with respect to this-will Max Bupa be asked to introduce this product ?

Let us see what is the ultimate outcome when the product is introduced?

Our suggestion :

Let all the companies come out with a joint advertising campaign –explain benefits of having health insurance. We should aim for 10 crores policies to be sold under this category. With an average policy size of Rs 2500 this should mean premium of Rs. 25000 crores.

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Health Insurance is an important part of Indian Insurance market

Health Insurance is an important part of Indian Insurance market and it portfolio which growing at the highest rate. Therefore various proposals are under consideration at different levels with IRDA, Insurance Companies, Government Agencies & Corporate bodies. According to newspaper reports some of these are:-

17 General Insurance Companies and 3 Health Insurance companies are at present selling health insurance. During 2009-10 premium figure is estimated to have touched Rs. 8100 crores.

(1)- Number of stand alone Health Insurance companies is increasing at a slow pace. Star Health was the first health insurance co and it was followed by Apollo Munich which started operations in August 2007. Max Bupa has started operations in April 2010. Religare is planning to start operations in near future but without any foreign partner.

(2)- In view of increase in medication as well as health care costs the sum assured limit of Rs. 5,00,000 has been steadily increasing and now many companies are issuing policy of Rs, 10,00,000. Max Bupa has introduced a product where even a policy of Rs, 50, 00,000. can be issued and that too to a person of 80 years. It is a good charge.

(3)- More and more life Insurance Companies are now selling Health Plans –which is a combination of Health Insurance and Mutual fund. It is foreseen that SEBI view on Mutual fund will have impact on this product also.

(4)- Hospitals / Pharma Co’s may become promoters / investors in health insurance companies. It may result in better healthcare management as resources can be effectively utilized for the welfare of the society. But reach can be limited as India is a very large country. Contribution of 3 large corporates Max, Fortis & Apollo will be merely a symbolic thing.

(5)- Our projections are that by 2015 Health Insurance premium will touch Rs, 35,000 crores and by 2025 it will be Rs, 4,00,000 crore industry.

(6)- Concept of Co pay or co payment will get strengthened year by year and we foresee it will be introduced for all type of health insurance polices by 2013.

(7)- RSBY has become a success. More and more states will introduce this and coverage of those who are BOP (Below the poverty line) and are in unorganized sector will increase.

(8)- In 8 to 10 years most of the General Insurance companies in India will withdraw from Health Insurance scene as they will not be able to cope up with losses and we will see more and more stand alone Health Insurance Companies entering the field and they will become stronger year by year. Their number will also increase as Government may:

- Permit 100% foreign ownership in stand alone Health Insurance companies in near future.
- Reduce equity requirement for Health Insurance Companies at Rs 50 crores (instead of Rs 100 crores at present).

(9)- General Insurance Companies will consider setting up of 100% owned Health Insurance Companies as subsidiary companies. Reliance General may make the beginning by setting up Reliance Health Insurance.

(10)- Mergers & Acquisition will start in Indian Insurance industry and in 2011 (may be in 2010) we will see firms like Royal Sundaram getting merged with Reliance General Insurance.

At present (2009-10) Private insurance players are having market share of 40% in health insurance. Their market share has increased from 12 per cent in 2003-04 to 40.00% during this year. The market share of public sector companies has come down to 60%, which was expected by us as well as predicted on our website. We foresee 4 PSU’s may set up 1 strong Health Insurance Company as a stand alone company to face competition. They may also go in for 1 stand alone TPA fully owned by them.

Star Health has become No. 4 company as far as Health Insurance is concerned. They have beaten National Insurance.

(11)- Some of the small TPA’s may exit the scene as they will find business to be unviable as more and more insurance companies will go in for in house processing of claims.

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Is loss making portfolio of Health Insurance repelling foreign companies to enter India.

Is loss making portfolio of Health Insurance repelling foreign companies to enter India.

It is learnt that Religare Health Insurance may go in for 100% Indian owned venture as no agreement could be reached with 4 foreign companies, with whom discussions were being held. Reasons can be:-

1) Is it that delay in increase of foreign equity from 26% to 49% is responsible for this.

2) Is it that foreign companies are finding that losing portfolio of health insurance is going to continue for at least 5 years then why not delay the entry in to India. They may enter when the companies have incurred heavy losses and are in a mood to readjust the pricing.

Your comments are invited.

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Best policy of today may not remain the best policy after few years

Best policy of today may not remain the best policy after few years

Large number of clients contacts us to know which the best policy is so that they can buy the same. Everyone’s wish is to buy the best. One of the main parameter on which decision is taken is lowest price as on today. Our suggestion is that take broader view of the whole scenario because what is lowest today may not remain lowest after few years. Is it not affect that last year Reliance was having very low premium rates and during April 2010 they suddenly increased the rates by as high as 231%. They are now one of the highest priced one and are 10th position in a list of II. You do not change insurance company frequently therefore let us see some rates as an example,

Premium for family floater policy
(Age of head of the family 35yrs/ 45yrs- 2 Adults+ 2 Children)

Only premium can not be the basis as there are many parameters like issue of policy & ID Cards ,claims settlement, brand goodwill .

Apollo Munich & Max Bupa are 2 companies who do not put a limit on room rent @ 1% of sum assured.
In comparison of Iffco-Tokio vs Apollo Munich you save Rs. 3335 by not taking Apollo Munich as a today. Assuming a claim is lodged and hospitalization is needed for 6 days where room rent is Rs. 7000 per day. You will notice that hospital will charge Rs. 42000. Apollo Munich will pay Rs.42000 where else Iffco-Tokio will pay Rs. 3000x6=Rs.18000. You will have to pay out of your pocket Rs.24000.

At the same time you will notice Apollo Munich which is No. 7 for age 35 yrs becomes No.10. When the head of the family becomes 45 yrs, which means as age will go up Apollo Munich will increase the premium rates at a faster rate.

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Cloud results in large number of claims under Overseas Travel Policy on Indian Insurance Companies

Cloud results in large number of claims under Overseas Travel Policy on Indian Insurance Companies

European cloud and consequent disruption of flights has resulted in claims being filled/ lodged by those who had taken overseas travel policies, which also cover the risk delay in flight is covered under this policy.

Large numbers of flights to and from Europe were disrupted for a week due to volcanic dust over the continent.

Overseas travel policies give a maximum cover of $1,000 and are likely to result in good number of claims. They cover claims arising from delay or cancellation of trips due to unavoidable circumstances. Passengers will have to provide their bills to make a claim, say company executives. Other than cancellation of trips, travel insurance policies cover medical insurance, personal accident, check-in delays, loss of passport and baggage loss. Within the package, these claims have individual caps. Some cap check-in delay claims at $200, while all companies have capped the trip cancellation cover at $1,000.

According to Mr. TR Ramalingum said Bajaj Allianz General Insurance’s head of reinsurance.
“We have got some intimations of claim. Policy holders will have to present their bills or relevant papers. Just cancellation of a trip will not lead to reimbursement”

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A boon for health coverage after retirement

A boon for health coverage after retirement

Firm offers no-pain switch from company cover

Persons in the age group of 55+ are concerned about health insurance after their retirement, when they will no longer be covered under a company’s group mediclaim policy.

As the competition grows and more and more insurance companies come out with better products with better features- We have the solutions appearance on the horizon.

Apollo Munich has asked for approval from the Insurance Regulatory and Development Authority (IRDA) to launch Optima Vital, a ‘top-up product over corporate medical cover’, convertible to health cover after retirement. To be eligible, one needs to be already covered, as an employee, by an employer-firm and below 58 years of age; if so, the new product gives the option of taking an additional ‘top-up’ coverage to the former, and then, just before completing 58 years (even if the retirement is later), opting to change this into full individual coverage. Apollo would then do so without any extra fee or medical test.

We understand that other insurance companies are developing similar products. And are going to launch the same in near future. The move would help a large number of people who are often denied health cover once they cross 50 years of age. This is despite an Irda directive to insurance companies to increase entry age for cover to 65 years and not to refuse a policy on grounds of age or load senior citizens with extra premium.

Insurance companies are, however, not eager to do so; both fees and tests get stiffer with age, especially after 50 years of age. Usually, if someone wishes to buy health insurance in later life or after retirement, there is a waiting period, or the cover comes after various exclusions on “pre-existing diseases”.

“It is difficult for anyone to go ahead and buy a cover at the age of 58 years. If you buy a top-up cover while working, you will have the option to convert it into a full-fledged policy when you retire, “ said Apollo Munich’s managing director and CEO, Antony Jacob, on the proposed scheme. “It takes away the worry of the person while retiring.”

At present, apart from being reluctant to extend coverage for the elderly, many insurance companies do not even reimburse the cost of medical tests undergone during the process of checking or updating a cover.

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Health Insurance industry estimates show –it has touched Rs 8100 Crores mark during this year (2009-2010)

Health Insurance industry estimates show –it has touched Rs 8100 Crores mark during this year (2009-2010)

Initial statistics for the year 2009-10 (year ending 31st March 2010) indicate that Health Insurance industry has touched figure of Rs 8100 crores. Last year this figure was Rs 6600 crores so it means that there has been growth or 23% during this year. Overall General Insurance Industry during 2009-10 has shown growth of 10% so it is heartening to note that Health portfolio has really contributed to the overall growth or General Insurance Industry.

Health Insurance Companies have also achieved high figures and Star Health and Allied Insurance Company Limited has reached figure of Rs 900 crores (exact figure awaited).This shows that standalone health insurance companies have strength to stand with health being the only portfolio.

On the profitability front the figures continue to be bad as this portfolio is still losing money and one should not be surprised that when all figures are complied then ( proper costing and allocation of overheads is done) then we find that in this portfolio there has been a loss of Rs 2000 crores.

Let us wait for the final figures as these are estimates.

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Air ambulance- who will pay for it

Air ambulance- who will pay for it

An interesting news item has appeared in HT- according to which NHAI is planning helipads at a distance of 100 kms. on various Highways going from Delhi to various destinations say Jaipur/Agra/Haridwar/Rohtak. We appreciate the plan as it will save lives of those who get involved in major accidents on highways.

The question arises who will pay for the costs. Questions before us are;
1) If it is free- there is tendency to misuse the facility.
2) Will the pilot be available on 12 hours basis (helicopters do not take off in dark)? Estimate the cost and we know it will be high say Rs 25000 per flying hour and time being counted when it takes off from the base.


Are we expecting that cost will be paid by Insurance Company if some one to be transported has Health Insurance policy? No it is not going to happen as nearly all Insurance policies pay Rs 1000 or so and that too for ambulance only.

There is a silver lining in Platinum product of Max Bupa. If you are insured for Rs 15 Lakhs/ 20 Lakhs/ 50 Lakhs then you are having no limit on ambulance which we are made to understand covers Helicopter evacuation or use of air ambulance.

High profile people or HNI’s will be attracted towards Max Bupa product.

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Reliance has great plans – and now we hear Reliance Health Insurance may come

Reliance has great plans – and now we hear Reliance Health Insurance may come.

It is great to see activity in Insurance industry and now we hear that Swiss Re may be the partner in stand alone Health Insurance Company to be set up by Reliance.

We also have been hearing that Reliance Life will also have Swiss Re as the partner.

Reliance General will have Royal Sundaram merging into it- Sun Alliance will become active partner with 26% in Reliance General Insurance Company Ltd

What these developments will mean for customers. ?

Stabilization of premiums for various policies or products at higher level .

You may like to see my other blog regarding increase of health insurance premiums by Reliance General effective April 7 ,2010 by as mush as 231% in some cases

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Elbow Replacement – an idea about hospitalization cost

Elbow Replacement – an idea about hospitalization cost

We have been hearing about knee replacement. New we have Elbow Replacement. As the age of Indian people will increase we will have new treatments / surgeries, which will be required. But the fact remains cost will be high and will go on increasing year by year.


If Elbow Replacement is costing Rs 150,000 to Rs 200,000 in 2010 then we have to consider that sum assured should be high at say Rs 3 Lakhs to Rs 5 Lakhs. It will make no sense to have a policy for Rs 1 Lakh.

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Reliance increases premium rates for Health Insurance.

In the past customers have enjoyed low premium rates for Health Insurance policy of Reliance General Insurance Co Ltd.

New rates were announced on 7.4.10 ,thes are increased rates and bring premium rates to more or less at par with /premium rates of other Insurance Companies.

Let us see comparision of old rates vs new rates for a family floater policy where the age of head of the family is 32.


You may be surprised to see increase of the order of 231% but I was expecting this to happen.

No Insurance Company can go on losing money for a long time as ultimately the shareholders want return on their investment.

As the companies have started getting ready for IPO as well as to release / figures in press( every 6 months) / website( every 3 months ) this was expected to happen.

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Product Innovation is coming in Health Insurance Industry in India

Max Bupa is expected to start their operations in near future and it is good to know that product to be introduced will come out with innovative features, which we have covered in our blogs from time to time. The company is starting with 6 metropolitan cities. Instead of focusing on too many hospitals, focus will be on treatment of policy holders in the best hospitals. We understand that 20 best hospitals have been empanelled in Delhi area.

Salient points of comparison between products available presently with that of Max Bupa are:

• Focus on metro cities
• Focus on upper segment or upper middle segment of society
• Use of smart cards
• Will not use TPAs
• For those opting for sum assured of Rs.15 lakhs – use of helicopter permitted for evacuation in case of emergency
• Max sum assured of Rs. 50 lakhs
• Reimbursement of medical tests cost incurred at the time of making proposal
• OPD coverage - yes
• Annual medical checkup
• A qualified doctor will be acting as your Relationship Manager – who will guide you on phone from time to time. He will even visit you when you are in hospital for serious ailment.

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Why health insurance portfolio of Indian Insurance Companies is loss making

During 2008-09 the figures of some of the insurance companies are:


The reason why Insurance Companies lost money and that too heavily is that while issuing group/ corporate policies they give coverage for:
• Pre-existing diseases
• Maternity

The question arises – If pre-existing and maternity coverage is not given to individuals/ families then why it is being giving to corporate? Is this not a restrictive practice? Should we try to stop it?

Is it the desire of the insurance companies to show high top line figure that business is accepted by insurance companies from corporates at low premium rate?

Is it that large corporates are having bargaining power because of large number of personnel to be covered and big ticket cheque being issued by them?

Some of these questions need to be answered. Comments are invited.

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Who offers OPD Coverage as a part of Health Insurance in India

Who offers OPD Coverage as a part of Health Insurance in India

This is a very common question which we come across from our customers. In fact those who are familiar with USA or are returning from there find it very strange that most of the Indian insurance companies have products which do not cover OPD.

The exceptions are;
ICICI Lombard’s “Health Advantage Plus” and
Apollo Munich’s “Maxima” Health Insurance plan.

ICICI Lombard’s Health Advantage Plus covers OPD expenses from the first day of the policy. The objective of this policy is that policy holders can enjoy maximum benefit under Section 80D as per applicable tax laws. It also offers/ covers all OPD expenses i.e. consulting, tests or medicines.

In recent times, there has been a rise in the number of Caesarian section births. Increasingly we see more complicated deliveries, a series of pre-natal tests and medication which have resulted in higher childbirth expenses. Health insurance with OPD cover is thus beneficial for women during pregnancy and childbirth. ICICI Lombard provides maternity cover as part of the Health Advantage Plus policy.

The OPD cover may vary from Rs. 2,000 to Rs. 10,000 depending on the plan opted and the age profile of policy holder.

One can claim OPD charges only once during the policy term so one has to keep all the bills paid safely to get the reimbursements as and when the limit is reached.

The Apollo Munich’s Maxima benefits includes , cash- less OPD expenses across trusted network of pharmacies for pharmacy bills, diagnostic centers for diagnostic tests and annual health check-up, dental and optical care centers for contact lenses, spectacles and dental treatments along with consultation with family doctors.


The maximum benefit allowable for 1 adult is Rs. 8,500 [350*3 + 500*1 + 1,000 + 2,000 + 1,000 + 1,000 + 2,000(estimated)]

In addition, both the policies do not allow, an insured person to claim OPD cost within 90 days of commencement of the policy.

If we go for a normal health insurance policy, the premium paid is much less compared to these policies; as a result we end up paying more than the benefits we may receive.

Let us see the choice with examples:

Example 1:
Mr. X aged 30 years buys individual Health Advantage Plus plan from ICICI

Sum Insured : Rs. 3,00,000
Premium paid : Rs. 16,545
Less: Tax saved : Rs. 4,964 (30%)
Net premium : Rs. 11,581

Now if he takes normal healthcare policy from New India

Sum Insured : Rs. 3,00,000
Premium paid : Rs. 3,871
Less: Tax saved : Rs. 1,161(30%)
Net premium : Rs. 2,710

So, to avail OPD coverage of Rs. 8,800 (which he will not be able to claim without unnecessary visits etc.) he pays a premium of Rs. 8,871 extra.

Example 2:
Mr. X aged 30 years buys individual Maxima plan from Apollo:

Sum Insured : Rs. 3,00,000
Premium paid : Rs. 15,216
Less: Tax saved : Rs. 4,565 (30%)
Net premium : Rs. 10,651

Now if he takes normal healthcare policy from New India:

Sum Insured : Rs. 3,00,000
Premium paid : Rs. 3,871
Less: Tax saved : Rs. 1,161 (30%)
Net premium : Rs. 2,710

So, to avail OPD coverage of Rs. 8,500 (which he will not be able to claim without unnecessary visits etc.) he pays a premium of Rs. 7,941 extra.

The conclusion drawn is by having these policies you are getting the benefit in the ratio of 1:1 only.

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Should health insurance be made compulsory?

The infant mortality rate in India is 10 times that in UK; it is also far higher than whole host of other developing countries (four times that of Sri Lanka, for example). A vast majority of deaths are preventable even with our present level of income. Other key health indicators, particularly maternal mortality and nutrition are equally distressing. Amongst children below five in India, 46% are under-nourished, 36% stunted and 22% wasted. Imagine the impact on each affected family, the depth of the unnecessary human tragedy, beyond the cold statistics.

The magnitude of health crisis has not got the recognition it deserves. Civil society organizations too have not been able to mobilize widespread public awareness. Many people feel that there is a need of an action plan on healthcare.

Government has been looking for alternatives, and people will like to go for ggod facilities even though they cannot afford the cost. For the poor, sickness is not just a matter of physical ill-being but also has a deep and long-lasting economic impact and productivity loss to the nation. It also affects GDP of the country.

Indian model of healthcare has largely been a private-insurance based one and as costs of healthcare will increase so the insurance premium will also increase whether we like it or not.

While the insurance industry is capitalizing on unmet demand and we also have large number of patients through conventional healthcare facilities, there is also a huge potential for technological solutions.

The government needs to leverage the new possibilities and integrate them into a comprehensive healthcare system, rather than stepping back and leaving things only to market forces.

In the recent years the government has done a wonderful job by bringing in RSBY for the benefit of poor people ,who till recently could not afford health insurance policies on their own.

Senior citizens have been complaining about non availability of health insurance of right amount and against payable of right or we can say reasonable premium.We feel now the time has come and Health Insurance should be made compulsory at least for the senior citizens.The positive impact of this will be that this will give a good boost to the insurance industry.

The idea is from the date of start 18 months will be given for all those who are 60 + yeras to get the policy issued. Wide publicity will be given thro various media to popularize this concept. Assume Rs 2000 per person per year is given as subsidy for first 2 years.

Let us assume 200 Lakhs senior citizens avail the offer and Rs 6000 is the premium then Indian insurance industry will get additional revenue of Rs. 12,000 crores. The insured senior citizens will pay Rs 4000 while the balance Rs 2000 will be paid by the governement.

The present figure of Rs 6600 crores will be going up by Rs 12000 crores and this will take the Health Insurance Industry to new heights .We are sure the portfolio will become profitable as at present only those who are expecting to lodge claims buy insurance. This will give boost to GDP, health care infrastructure and employment to large number of doctors/nurses .technicians, IT personnel.

Let us try to push this idea and improve the health of our health insurance industry. Your comments will be appreciated.

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Need for health insurance policy for millions of bed-ridden senior citizens of India

Like in any other country there are many senior citizens in India who are bed-ridden and dependent on others. Their number is increasing year by year and is going to touch very large numbers by 2025.

Recently a sample of 1,000 bed-ridden senior citizens were surveyed, 600 were from Delhi and 400 from its satellite townships.

It has been found that 4% of the 2.5 million elderly in Delhi/ NCR are bed-ridden and require round-the-clock care. At any given point of time, almost 5% to 6% senior citizens live with the threat of ailments, which may render them bed-ridden.

Approximately 65% of the bed-ridden patients were reported from among the elderly person’s category and these patients face many problems, including non-availability of care-givers, depression and nervousness, lack of cleanliness & hygiene, bedsores and high blood pressure.

It was also found that 86.1% of 1,000 reviewed were affected by physical chronic illness, heart attacks or accidents while 13.9% were suffering from different kinds of mental and psychological problems.

31% bed-ridden patients reported that they needed care-givers urgently or were without any proper care-giver. 38% patients were being taken care of by their spouses, 23% by their family members and 39% by care-givers.

There were more bed-ridden men than women – 67.5% against 32.5%. 66.5% of the patients were confined to bed for a short period (less than 12 months) while 33.5% were long-term patients. 76.5% were partially affected while 23.55 were severely affected.

There is a need for training family members to take care of the bed-ridden patients and help them accept their condition. It is imperative to initiate training programme for affected family members and relatives of bed-ridden patients so that hey can get adequate knowledge and information on how to tale care of persons confined to bed.

The question before us is that these bed ridden patients are not covered by health insurance policy because they are suffering while being at home and they are not in hospital.

We will welcome an innovative product from at least one Insurance company which will take care of such patients –many of them being patient of depression, which is not covered at present.

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Income tax benefit for those who buy health insurance

Income tax benefit for those who buy health insurance

We can divide this into 3 parts;

1-When you buy the policy for your family - If you are buying the policy for your family; maximum amount can be Rs 15000 under clause 80 D. This is the highest amount which you can cover under the limit of Rs 1.00 lakh.

2-When you pay for health insurance of your parents who are below 65 years; Maximum amount can be Rs 15000. This amount is over and above the limit given to you under 80D.

3- When you pay for health insurance of your parents who are above 65 years; Maximum amount can be Rs 20000. This amount is over and above the limit given to you under 80D

It means that if you are getting the policy for your family as well as your parents who are above 65 years then you are getting rebate on Rs 35000.

If you are in higher tax bracket then this can be 30% of Rs 35000. It means nearly Rs 12000 is being paid by the Government.

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Health insurance Cover is a good benefit to retain staff

Large numbers of HR specialists are of the opinion that take home pay is more important for attracting the talent as well retaining the staff.

We have come across survey where top 125 employers comprising a large and varied industry segments were surveyed. The findings are;

Over 40% Indian companies use health care cover for employees as a tool to attract talent and a retention strategy. Rising premium costs have not reduced the importance of health care cover as an employment value differentiator and Indian companies continue to use it as part of their hiring and retention strategy.

Only 11% use it to minimize loses arising out of employee heath issues.
58% companies did not deduct any premium costs out of employee salary, which means that 100% cost is booked by the company as an expense.

Rising health care costs are making are making corporate strive to strike a balance between increasing premium costs and talent management strategies. It is vital that employers design appropriate health care plans, employ efficient ways to manage them and to ensure employees understand their value.

Corporate are constantly devising different strategies to control healthcare costs. Companies are using;
1. Emphasizing on employee education for healthcare.
2. Removing the parents of employees from the coverage as higher premium is being charged by the Insurance companies for covering the parents.

Only 17% companies cover post-retirement medical expenditure, most of which are public sector companies. We foresee that this will be reduced in near future as more and more PSU’s go in for disinvestment and start coming at par with Private companies which are quote on the stock exchange.

This shows that healthcare cover is being provided only for the benefit of the companies and not for the employees. Better health of the employees means better productivity for the company. Also by providing health cover companies save on medical expenditure to be incurred on health of the employees.

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Early detection of disease can save higher claims, which insurance companies are paying at present

We came across two interesting news items recently which had following information for us:

1. According to AIIMS study 90% women ask for medical help after stage 1 of breast cancer. 70% of women go to their doctors in the 3rd and 4th stages of breast cancer, by when conservation of the organ is very difficult and chances of cancer developing in the other breast are very high. Naturally it means high claim figure to be paid by insurance company as well as pain and agony for the patient.

2. As per a study published in the Journal of Clinical Endocrinology and Metabolism, people with periodontitis are at about 20% greater risk of heart attack. 34% of people with moderate periodontitis and 37% with severe periodontitis had metabolic syndrome, compared to just 18 percent of people with no gum disease or only mild periodontitis.
Metabolic syndrome is a cluster of risk factors for heart disease, paralysis and diabetes, including high blood pressure, abdominal obesity, low levels of “good” HDL cholesterol and high triglycerides (another type of blood fat).

By not covering dental treatment as a part of Health Insurance, most of the insurance companies feel that they are saving lot of money. But if they start paying for dental treatments, maybe they can save higher claims for which they are called upon to pay at a later date.

Insurance companies issue health insurance policies to individuals below the age of 45 years without any medical examination and charge appropriate premium from them. In most of the policies there is provision to pay for the health check up expenses but on the one hand amount to be paid is small and a good effort is involved in reimbursement of the same. The consequence is that most of the insured prefer to forgo the same rather than avail this facility.

From the above mentioned two instances we find that if preventive diseases are detected early, it will be beneficial for both the individual as well as the insurance company.

Some of the suggestions which insurance companies may consider:

• Create awareness and encourage females to go in for mammography test for examination of breast cancer so that it can be detected in early stages and cured easily with much less costs. Sending SMS/email or even telecalling the insured after the age of 45 years will result in good response. The insured will appreciate this gesture on part of the insurance company.


• Tie-up with dental surgeons to offer discounts to people who have health insurance policy. No outgo will happen as far as the insurance company is concerned but there will definitely more and more customers coming to Dental Surgeons and hence they will be motivated to give discount as a gesture of goodwill and low cost in getting more customers who will become customers of their clinic.

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2 policies of Health insurance –how to lodge claim ?

Preeti Kulkarni has written a good article in The Economic Times of January 6, 2010 on “Take extra cover for sake of your health”

The Heading carries the line “In many cases, claims can be made under both the policies” It is very interesting and has resulted in many calls being received by me from persons who have visit this website.
The same article under the sub heading “Making a claim under two policies.” mentions
“Many policy holders tend to assume that they can file a claim under any of the policies they have signed up for, which may not always be the case; whether the individual can make a choice to claim depends on the provisions made in the policies taken. Also, whether the individual can make a choice to claim depends on the provisions made in the policies taken. Typically, there is a declaration sought from the customer on the policies under which s/he is covered, and the total liability is shared by the insurers, informs.
The contribution clause in the policies states that claims can be made under both the polices, in the same ratio as the sum insured. For instance, if you are covered under a corporate policy with a sum insured of Rs. 2 lakh, in addition to a personal cover of Rs. 1 lakh and makes a claim for Rs. 1 lakh, the insurer servicing the former will contribute around Rs. 66,000 while the balance will come from the other insurer. However, according to Pawan Bhalla, CEO of Rakish TPA, in India, policyholders are not legally bound to disclose the details of any existing policy or make a claim under any of the two policies they are covered under.”

Pawan has mentioned that it is not necessary to make the declaration to both the Insurance Companies.

Reality is that if the claim is of small sum then everything is fine. But if the claim is large and let us say the facts are

Policy 1 Coverage under corporate group policy = Rs. 5 Lakh
Policy 2 Coverage under own policy = Rs. 5 Lakh

Policy 1 was issued in 2003, and is continuing. A claim was lodged in June 2009, for Rs. 2 lakh and was paid.

Policy 2 was issued in November 2008 and is continuing. Insurance company 2 was not informed about existence of policy 1.

Let us say in January 2010 claim is to be lodged for Rs. 7 lakh.

This is the point at which problem like claim settlement arises when the claim is to be lodge with both companies.

As only one set of original documents (Invoice bill / Receipt / Test Reports / Discharge Summary) can be issued by Hospital therefore if will become necessary for the client to reveal to both the companies about details of polices. If any document is required from Insurance Company (Policy 1) they will point out when you took this policy and why we were not informed about policy 2 on earlier occasion as they would have asked Insurance Company 2 to pay half of the claim amount of Rs. 2 Lakh. In most probability Insurance company 1 while paying the claim of Rs. 7 lakhs in ratio of 1;1 which means Rs. 3.50 lakh will deduct Rs. 1 lakh for June 2009 claim.

In the absence of letter from Insurance Company 1 he can not go to Insurance Company 2. Alternatively if lodges original documents with Insurance Company 2 then he may find slightly easier but problem for claim settlement is bound to emerge.

Any effort to get 2 sets of original form Hospital is not suggested as Insurance Co’s / TPA’s are cautious and are trying to control frauds as many cases of multiple claims being lodged with more than 1 Insurance Company have been noticed / reported.

In the end I will like to say you are buying Insurance for having peace of mind then it is better to reveal to both the Insurance Companies about the policy.

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