Health Insurance in India, JUST TIP OF THE ICEBERG!

Health insurance is the important part of the organized health care system. Please comment.

Health insurance and health care can probably get together and work out some kind of reforms. Even today there is no nodal agency or Apex body for healthcare industry. But as and when awareness grows, various settlements start happening, there will be some governance around it. Also the way treatment is being done here has to undergo a radical change.  

Health care and health insurance are interrelated, is it a big challenge?

Absolutely! These are interrelated. But challenge? Not really! There is a need to be slightly more organized and it will only happen when it gains certain critical mass. As you must be aware 4-5 MNCs have expressed willingness to come to India, with Indian partners. Once these companies come, attain sizeable customer base and become the dominant force for the health care provider, then only reforms will start happening. For an industry, standalone Mediclaim or health insurance cannot drive this change, but it can be driven by managed healthcare groups when they work within the parameters of the scheme. Overseas hardly anybody has individual policies, mostly these are linked to some group insurance policies done by the employer. Talking of claims settlement overseas, the billing cost is almost 40-50% higher than the claimed cost, the cost which health care provider incur and what service provider will settle, there will be phenomenal difference. So this can happen only when they achieve certain critical mass to bargain at that level.

Is this the reason you have kept away from the most sold hospital expenses reimbursement policies (Mediclaim)? Are you planning to enter this segment?

While we do say that in travel, we are the world leaders as ours is the easiest to do. In health insurance, it has been internally decided that if this is going to be the disease and this is going to be the surgery, we will pay ‘x’ amount for each of this. Customer is free to find something within that, beyond that or less than that. It is a much cleaner way to do.

But can it substitute a regular Mediclaim policy?

It can. If a customer takes only Rs. One lac of mediclaim, or he takes Rs. 5 lac Mediclaim, then there is a limit he is opting for. Similarly in large schemes, the limit is higher. We are enhancing this product by way of introducing surgical cash. We are also coming up with wellness product branded as Wellinsurance, which will be much beyond traditional health products. In this we will have tie-ups with health care clinics, spas and gyms etc. To that extent, it will also have flavour of bit of reimbursement of costs. But until and unless we know what the costs will be, we will not be able to price that product. The variation between costs and the charges is huge.

Is it that a specialist in health insurance is likely to do better in such cases than a general Insurance company?

I do not agree that they understand it better, but yes they will have good bargaining power due to large numbers. If a general insurance company has a sizeable portfolio then they too can exercise good bargaining power. Insurers need to create big networks and that is the reason, the health care has gone up like anything in the western world. There is a big difference in the US and many other countries where health care is Government backed whereas in the US it is completely privatized.  

What is your view on IRDA’s recent attempts to impart transparency in the health insurance business? Is it good for the consumers? Do you think we will see a big rise in premiums?

It is not only good for the consumer; it is good for the industry as well, if you resolve the issues upfront. We believe that underwriting has to be proper and claim settlement be the moment of truth. If you do not underwrite and have transparency at the time of issuing the policy, there will always be problem for insurance company and the customers. There will be rise in premiums, as policy will be priced by taking risks into consideration. The whole of pricing is actuary-based model that analyses the past trends, to project the future trends.