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HEALTH INSURANCE
&THIRD PARTY ADMINISTRATION
Presentation By-Muneer Trivedi
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Wh at is Healt h Insurance ???Health insurance means risk coverage to providefinancial shelter in the event of medical treatment incurred out of a sickness.
Health insurance is one of the fastest growingareas in the insurance industry and is expected togrow to Rs.30,000 crores in 5 years from thecurrent Rs. 8,100 crores.
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Wh y is Healt h Insurance
important?Rising medical costsSh aring of h ealt h related risk
uncertain h ospital billsExpensive/quality h ealt h care servicesMoney value Sick Vs Healt h yFamily h ealt h insuranceTax benefitProductivity of workforceRemoves some of t h e burden from t h e stateKeeping pace wit h t h e customer needs w h ileac h ieving profitability
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Th e Indian Healt h ScenarioT otal Expenditure on health in India is nearly 6% of theentire GDP
Private health care expenditure is 4.25 % of GDP. At present the insurance coverage in India is negligible.Over the period the private health care expenditure hasgrown at the rate of 12.84 % per annum.
Indian health insurance industry stands at INR 8,100crores with only a small Section of the total population(around 2%) being covered so far.CAGR of around 35 % (FY2002-08)
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Source: Business World (India)Source: Business World (India) Oct 2007Oct 2007
Low penetration of Insurance and Low Govt. expenditure in India . . .Low penetration of Insurance and Low Govt. expenditure in India . . .Has resulted in high Out Has resulted in high Out- -of of--Pocket spendPocket spend
Uninsured82.65%
CommunityInsurance
4.19%
Pvt. sector Enterprise (Self
Funded)
4.61%
Indian Railways0.59%
Pvt.Health
Insurance1.42% CGHS3.35%
ESIS3.19%
Uninsured82.65%
CommunityInsurance
4.19%
Pvt. sector Enterprise (Self
Funded)
4.61%
Indian Railways0.59%
Pvt.Health
Insurance1.42% CGHS3.35%
ESIS3.19%
Health Insurance Penetration in IndiaHealth Insurance Penetration in India
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Perceptions about Healt h
Insurance in IndiaWh at is INSURANCE ? Buying a Promise
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Healt h Insurance: KeyStake h olders
Health InsuranceIndustry Government
Distribution c h annelpartners
NGOs / SHGs /MFIs
Media /Telecom
Customer
InsurancecompaniesTPAs
Healt h Providers
IRDA -regulator
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Introduction to Healt h
Insurance PolicyProvided by both private and public Cos.
Voluntary medical insurance program that providesfor reimbursement of hospitalization/domiciliaryhospitalization expenses/disease suffered/accidental injuries sustained during policy period.
Includes :Family floater (for families) mediclaim.Healt h insurance or mediclaim for individuals and for seniorcitizens.Overseas travel insurance.
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Mediclaim PolicyInstituted in 1986.Eligibilty criteria - 5 to 80 years of age.
Premium depends on age and sum insured.Benefits hospitalization benefits from Rs.15000 to
a maximum of Rs. 5,00,000.Providers any hospital with 15 beds or moreExclusions any pre-existing diseasePayment mode reimbursement of bill by Co. or by
T PA is also possible. (premium 6%)
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Need For H.I Policy According to Money Digest 2003:
1 in 3 person will develop some life threateningcancer.1 in 4 person will contact heart disease before they
retire.1 in 20 person risk the chance of having strokebefore the age of 70
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Need For H.I Policy contd According to World Bank Report:
85% of the working population in India do not have Rs.5,00,000 as instant cash.14% have Rs.5,00,000 instantly but willsubsequently face financial crunch.Only 1% can afford to spend Rs.5,00,000 instantly
and easily.99% of Indians will face financial crunch in case of critical illness.
H ence the need for H ealth Insurance .
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Wh o does not need H.I???One who is covered by his employer.
One who can make immediate payment of hospital bills of the order of Rs.1,00,000 orRs.2,00,000 or even Rs.5,00,000 need not to go for health insurance.
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Wh at H.I Policy covers in
India?It covers hospitalization when a patient is in hospital for more than 24 hoursdue to:
-Illness-Accident -Surgical requirement
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COSTS COVERED ARE:Room, boarding expense inhospital/nursing home.Nursing and ICU expendituresFees of healthcare professionalsinvolved in the treatment
AnaesthesiaPre and post hospitalization expenses.
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Wh at H.I Policy in India
does not cover?T reatment of illness at home byconsulting doctor in your locality oreven in hospital.Health check-ups,home health services.Long term care/rehabilitative carePreventive healthcareDental and vision servicesOutpatient services
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Healt h Insurance PlansHealt h Insurance
Plans
Private Social Community Based /Micro Insurance
Risk Rated &Risk Rated &offered byoffered by
CommercialCommercialOrganizationOrganization
NonNon-- RiskRiskRated &Rated &
GovernmentGovernmentinitiatedinitiated
CommunityCommunityRated &Rated &NormallyNormally
managed bymanaged byCommunity /Community /
GroupsGroups
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Existing Sc h emes Can Be
Categorized As:(1) Voluntary health insurance schemes or
private-for-profit schemes;
(2) Employer-based schemes;
(3) Insurance offered by NGOs / community
based health insurance ( CBHI), and(4) Mandatory health insurance schemes or
government run schemes
(namely ESIS, CGHS).
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THIRD PARTY ADMINISTRATION
T PAs are BPO of insurance companies andare responsible forcoordinating all aspects
of claims arising due tohealth insurance policies.
TPA
Insurance
company
PolicyHolder Hospital
premium reimbursement
Healt h services
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Services provided by TPAI.D Card24 hours helpline for customer servicesProviding list of hospitals in networkClaim processing during admission of policy holderEnquiryScrutinizing bills
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Functions Of TPACoordinates with insurance co. & hospitalMaintains all recordsEnrollment processingIssues authorization forms to the hospital
Makes the payment to the hospitalFacilitates claim settlement Fund administration
Benefits management
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Procedures Facilitated by TPACashlesshospitalization
Reimbursement
Enhancement
Claim settlement
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You require hospitalization
Planned Emergency
T PA scruitinizes & on case tocase basis authorizes mediclaim
Appro al granted & you get cashless hospitalization
You get treated & prior to dischargecomplete claim form and sign all bills
Pay all non-medical bills byyourself
T PA pays bills of appro edamount to the hospital
Appro al not granted ,nocashless hospitalization but claim papers can besubmitted for reimbursement
Planned & emergency billsare paid by you. claim to besumbitted to T PA withoriginal documents
Network hospital Non-Network hospital
CASHLESSHOSP.
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REIMBURSEMENTPatient pays total bill to the
hospital
After discharge submits all the originalbills+original discharge summary+original
investigative reports to T PA
Patient is reimbursed within30-60 days
Claim studied by T PA
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ENHANCEMENT:In case the bill exceeds the approved
amount, the ward coordinator sends thefinal bills and documents to therespective T PA for enhancement.
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CLAIM SETTLEMENT All documents of patient are sent to T PA
No discrepancy
T PA studies the claim
Discrepancy found
Claim settled within30-60 days
Queries on them are
asked
Resolved withhospital
Claim disapproval ordenial
Not resolved
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PROBLEMS :FACED BY TPAs :
Lack of proper communicationIncreased bill and treatment cost Hospitals show negligence in filing the claim procedureLack of trained staff and professionals
FACED BY HOSPITALS :
Lack of awareness of the procedureIssue of pre-authorization letter not within specified timelimit Claim reimbursement is also unnecessarily delayed in some
cases.
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Healt h Insurance Focus
AreasHealth Insurance - potential tobecome a Rs.25000 crores industryby 2012.
No. of Elderly People in theDeveloping World will T RIPLE in25yrs. (WHO)
In India, the no. of people above 60yrs is about 8% today, with that no.expected to hit 21% by 2025 . (AsiaInsurance Review)
Source: NIA Library
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Healt h Insurance T h e W ay
Ah ead
Creating awareness on Rights& ResponsibilitiesStandardization of Cost
T PAsHealth Providers
Increased T ax benefit Removal of Service T ax
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Healt h Insurance T h e W ay
Ah ead contd
Gradation of Health service providers
Pool for Senior CitizenRenewability / PortabilityCompulsory Health Benefits for organized sectorGovernment role on mass healthcare initiatives
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Constraints In Extending
Coverage75% of the population works in theinformal sector25% of the population below povertyline70% of the population in rural areas
Under insured countryHealth insurance an ill understoodsubject
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PolicyHolders
InsuranceCompany
T ird Partydministrator
HE LTHC REPROVIDER
Cashless Treatment
FRUSTRATIONS IN THE
SECTOR
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COST DRIVERS IN HEALTH
INSURANCET echnology / SpecializationPrescription DrugsMedical InflationMoral Hazard / Adverse SelectionNew treatments
Unnecessary treatments
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PROBLEMS FROM INSURERSPolicy condition problemsCustomer IgnorancePre-Existing Condition IssuesDisputes with hospitals / insured
Delays
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PROBLEMS FROM TPAsLack of Infrastructure
T here are no holidays in Health care yet offices not open on holidays, telephoneaccess unavailable, etcNo qualified doctor / staff
Delay in claim-settlement Deduction in bills without basisIncreased paperwork
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SOLUTION :Insurer
Designing a less complex products
Clarity in policy terms, conditions & exclusionsEfficient system for claims processingNeed for quicker services. E.g.: T oll free no's,cashless, quick responseExpense analysis on a regular basisProduct innovationEfficient training of sales force
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SOLUTION :Policy h older
Pay attention to policy conditionsRead the exclusions and limitationsvery carefullyCompare premium costs, deductibles,co-paymentsT ake an informed decision
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SOLUTION :
Th ird party administration
Proper infrastructureSpeedy claim settlement processLess paper workEfficient staff.
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Recent Initiatives Of IRDA
Committee to formulate regulationsPure health insurance products
Allowing the formation of an stand alonehealth insurance company
Renewability/policy renovation
Senior citizensData management/data poolT hird party administrators.
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Recent Concepts in H.IDay care surgeries/
treatment coveredinsurance.Co-payment concept
Health insurance throughcredit card.Micro insurance.
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Ch allenges in Healt h Insurance
Medical advance, both a challenge & alsoimpediment
Increase in health care cost Ageing population Acute shortage of trained personnel rangingfrom doctors to health care administratorsNew emergence and resurgence of olddiseases
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CONCLUSIONCreating awareness & meeting thedemand for health care & financingCreating modules for aligning theservices of all concernedFocusing on enhancing affordability &
reducing costsRapid coverage and health benefit to all
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W ANT TO KNO W MORE???www.healthinsuranceindia.orgwww.expresshealthcare.inwww.google.comBussiness world
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Thank You
While buying health insurance one isalso buying peace of mind, when one may need hospitalization
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