GOOD times seem like they should bring good health. More people have jobs and health insurance when an economy is growing. Fewer people skip visits to the doctor to save money or suffer the severe stress that comes with a layoff. So with job growth now stronger than it has been since 2000, the country can look forward to some vigorous years, it might seem.

But that is not quite how the world works, some new research has found. In fact, a strong economy should probably come with a warning label. A one-percentage-point fall in the unemployment rate – which is what has happened since the summer of 2003 – leads to 12,000 deaths a year in the United States that might not otherwise have happened, according to Christopher J. Ruhm, an economist at the University of North Carolina, Greensboro.

When the economy improves, the number of car and workplace accidents rise, as people are on the job and on the road more often. Deaths from heart attacks, flu and pneumonia increase, too. Cancer deaths do not change and suicides fall, but not by nearly enough to overcome the other increase in mortality.

Smoking rises, as does obesity, during a boom. Physical activity falls. The part of the population that drinks remains the same, but some moderate drinkers become heavy drinkers.

Put it all together, and an economic expansion ends up looking like a counterintuitive health risk.

“Things don’t go uniformly in one direction or the other,” said Mr. Ruhm, who in recent years has published a flurry of academic articles with titles like, “Healthy Living in Hard Times.”

“Good life events,” he said, “don’t always lead to good health.”

The pattern is a testament to the sway that economic incentives hold over consumers, even when they do not realize that they are responding to those incentives. Rising incomes tempt our powers of self-control, effectively lowering the cost of a bottle of good Scotch, a buttery steak Bordelaise and other luxuries that are more enjoyable than healthy.

Health insurance in India is still for the privileged few. However, the increasing healthcare cost and an ageing

population would trigger the growth of health insurance as it’s the most cost-effective method of risk financing.

The consumer psyche is also slowly changing to cover their financial risk due to illnesses or accidents. The

prudent consumer can now pass on a huge unknown cost (cost of illness) for a small known cost (premium to

be paid) to the insurer. Buying health insurance thus becomes a logical thing to do.

Health insurance in India is, however, still largely in the form of a plain vanilla cover, mediclaim, introduced a

decade-and-half ago. Though this product has become a generic name for health insurance, it has little option

for customisation for an individual. Customisation is used in group health insurance by corporates for their

employees.

In group health insurance, customisation is possible in terms of addition of certain covers like maternity benefits,

waiver of waiting periods, cost-control measures like incorporating room limits, co-payment, deductibles and so

on. In fact, group health insurance in India assumes a nature of all-risk cover.

In case of the individual, customisation has not taken off despite the fact that we now have different products

such as hospital cash, critical illnesses and so on, besides the standard generic hospitalisation cover, in the

market. As a first step, we have customised the individual hospitalisation product by segmenting the age group.

Today, customisation is in terms of introduction of different plans with different options.

Though deductibles, co-payments, which actually have a bearing on the premia, are still not very popular. This

can be attributed to poor or little awareness among individual customers. For any product to be customised, the

awareness level has to be high enough.

The Insurance Regulatory Development Authority (Irda) is collecting data on disease patterns of the country’s insured population to help health insurance providers to effectively price premiums for health policies based on indicators about the prevalence of diseases.

“We are collecting data about disease patterns from Third Party Administrators. The sample is fairly large. We want to put in this information in the public domain. It will help health insurance providers to understand the Indian population. It will also serve academic purposes,” said Irda chairman CS Rao.

Health insurance companies feel that such data will give them more clarity to price their product. Says an official from Max India’s health insurance division: “Once you have morbidity data, companies can price their products prudently and will know the level of risk they have taken. There will be more transparency in the policy, which will help avoid claim disputes.”

The data is likely to be out in a few months. It will be helpful to make a correlation about the occurrence of diseases in a particular population and companies can estimate the risk they will have to take.

In life insurance, annuity products can be priced based on mortality rates, which are unlikely to change. But building a database in the case of morbidity is difficult because health profiles of populations evolve over periods of time, subject to lifestyles, consumption habits and other parameters.

Health profiles of consumers can also improve or deteriorate for a variety of reasons, said an actuary. For instance, if smoking habits undergo a change in a population, fewer cases of lung related diseases will be registered over a period of time. Thus, prices of health insurance premiums will be determined by geography, costs of healthcare across regions, gender, etc.

Many players are expected to foray in the niche health insurance segment. Apollo Hospitals have formed a JV with German health insurance company DKV. Max Hospitals is scouting for a foreign partner to foray in the health insurance segment. Dr Reddy’s is also exploring the health insurance market.

Kannan walks into an insurance office and asks for a job.

“We don’t need anyone,” he was told.
“You can’t afford not to hire me,” Kannan said. “I can sell anyone, anytime, anything!”

“Well, we have two prospects that NO ONE has been able to sell. If you can sell just one, you have a job.”

He was gone about two hours. He returned and handed them two checks, one for Rs 25,000 and another for Rs50,000.
“How in the world did you do that?” they asked.
“I told you I’m the world’s best salesman,” Kannan said. “I can sell anyone, anywhere, anytime!”

“Did you get a urine sample?” they asked.
“What’s that?” he asked.
“Well, if you sell a policy over Rs 20,000, the company requires a urine sample. Take these two bottles and go back and get urine samples.”

Kannan was gone about six hours, and they were fixing to close when in he walks in with two five-litres buckets, one in each hand. He sets the buckets down, reaches in his shirtpocket and produces two bottles of urine. He sets them onthe desk and says, “Here’s Mr. Mahadevan’s and this one is Mr Vasudevan.”

“That’s good,” they said, “but what’s in those two buckets?”
“Well, I passed by the Sterling resorts and they were having a state teachers’ convention, so I stopped and sold them a group policy

Senior citizens can now look forward to check out medical insurance policy scheme from Oriental Insurance. The insurance company is to soon launch the health insurance product designed for the age group of 60 to 85, and is expected to cover a wide range of specific ailments.

M Ramadoss, chariman and managing director of Oriental Insurance chairman and managing director M Ramadoss said that the company has approached insurance regulator IRDA for approval, while speaking to the media on the sidelines of an insurance seminar organised by the Indian Merchants’ Chamber in Mumbai on Friday.

Catering specifically for the demographic group of senior citizens, health insurance product `Varishta Bima scheme’ is also available from National Insurance, which was launched last year.

Oriental Insurance proposes to include some pre-existing ailments after two to three years in its scheme, according to Mr Ramadoss. One could be insured up to Rs 2 lakh with a flat premium across all age groups, with no geographic restrictions. But the exact details on premium were not available.

Mr Ramadoss said that though the industry has made a smooth transition to the detariffing regime, revenue growth may be impacted as premiums for certain segments have been hit.Premium income on medical insurance has been impacted because of elimination of cross subsidies while tariff on fire and motor insurance has also been impacted. Oriental has lost revenues to the tune of Rs 70 crore owing to the discontinuation of some group mediclaim insurance policies.

Detariffing is expected to slowdown the revenue growth of many insurance companies. Speaking on the issue, ICICI Lombard General Insurance MD; CEO Sandeep Bakshi said there has to be a trade-off between topline growth and profitability and between market share and the profit and loss account in a detariffed scenario.

Early this year, Tata Consultancy Services, which has more than 90,000 employees, approached New India Assurance Company with a proposal. It wanted New India to devise an insurance package for its employees based out of India which would cover procedures like in vitro fertilisation and artificial insemination.

The proposal was prompted by an internal survey’s finding that about 15% of TCS employees, both men and women, had fertility problems. Sources say TCS wanted New India to cover each of its employees for Rs 1 lakh. This was meant to be over and above the regular health insurance benefits the company offered. On its part, the insurer examined the proposal and declined to prepare the package TCS wanted.

New India argued that these procedures were expensive and did not require hospitalisation. More significantly, the argument went, infertility was not a disease as in such cases it could be a result of, among other things, stress.
TCS is not the only company in India to approach insurers for customised packages to cover infertility treatment. Sources in the insurance business say companies such as outsourcing firm Evalueserve, Computer Sciences Corporation and GE have all approached insurers at some point in recent times to seek similar cover for their employees. And all of them have been turned away.

What is Medical Tourism?

Medical Tourism or Health Tourism is a new concept where a patient travels to and also vocations in another country for medical treatment in order to get faster and better treatment and also to save costs.

What are the types of medical procedures that tourists usually seek in India?

Medical tourist’s choice destination is India for knee replacement and other orthopaedic treatments, besides heart surgey, cosmetic surgery, eye care, dental treatment or any other specialized treatment like infertility treatment for that matter and any procedure that is usually not covered by insurance or has a long waiting time in their
home country.

What is the cost and savings compared to the costs in UK or USA country?

Cost for an individual ’s treatment varies according to their needs. A patient from USA or UK saves 40% to 60% on an average on a knee replacement surgery, which would otherwise cost 30000$. A favorable currency exchange rate has enabled an economical medical package feasible for the patients from abroad. Hence the saving potential is huge which is the most important factor for the patients to seek treatment in India.

The potential cost savings for medical tourists are huge and is one of the most important factors in seeking treatment in India.

Are these costs savings due to lower standards of medicine in India?

The Indian medical standards match up to the highly prescribed international standards.

The steep reduction in medication costs are due to favorable currency conversion rates and lower operating costs in India. Indian surgeons and doctors are known for their skill and research throughout the world. Many highly qualified doctors have had some form of training from abroad specially USA and UK.

India has over 150000 medical tourists each year and this figure is rising at a high pace. Some recent programs recently on BBC and CNBC have reinstated the fact that medical tourism is the best idea if – you want to save costs, and get the best treatment to be done at your time and convenience.

“Unlike Life Insurance, in case of health insurance, there are multiple stakeholders involved and it is important for all of them to work together to make a success of this. This Summit has tried to assemble a confluence of industry players on a common platform to explore and arrive at a consensus on key directions,” said A Vaidheesh, Summit Chairman and Managing Director, Johnson and Johnson Medical. An aging population and an increase in lifestyle diseases will push the demand for hospitalization. It is important to recognize health as continuum and not as a point of reference. “The Summit will prove constructive for the vast array of issues affecting growth of this industry and the economy as a whole.”

Calling for a broader view of healthcare costs and an improved healthcare infrastructure, he said that by 2015, health insurance will cover 20 percent of the Indian population.

Providing an insight into the insurer’s mind, Mr DD Singh, Executive Director, Health Insurance, Life Insurance Corporation of India, stated that an insurer faces difficulties while choosing a product. Cost, quality and access decide the success of health insurance. The insurance companies need to talk about the mindset of the customer.

According to Jean-Michel Chatagny, MD, Client Market Asia, Swiss Re, in 2004 the world spent 4.1 trillion dollars on health. India has very less expenditure on health. Private insurance is very low and has the lowest percentage of government spending among the BRIC countries. The Swiss government encourages purchase of health insurance. India has potential for private insurers. Also, the care delivery infrastructure needs to be overhauled and the government has an important role to play, he said.

In his welcome address, Banmali Agrawala, Deputy Chairman, CII Western Region and MD Wartsila India Ltd. said that the first ever health insurance summit in India is an attempt to remind people of the importance of ‘forgotten’ health and health insurance to keep up with the fast track life. An indirect advantage of health insurance is that it keeps medical costs and practices under check. With the opening of the Insurance Industry to FDI, large amounts of funds have been flowing in.

‘Removal of tariffs will boost insurance’ says IRDA Chairman

The healthcare industry has two concerns: insurance and removal of tariffs. Once tariffs are removed, insurance will get a boost, said C.S. Rao, Chairman, Insurance Regulatory and Development Authority.

He was speaking at the Health Insurance Summit organized by the Confederation of Indian Industry ( CII), here today. It has also prompted the general insurer to pay attention to health insurance. Also required are discussions on pre-existing diseases. With senior citizens unhappy with the existing health insurance schemes, Rao added that this is an issue that needs to be addressed.

Health insurance forms a small part of insurance. With 75 percent of the Indians residing in the rural areas, more doctors need to be posted in these regions. Also, the poor have still to be taken care of by the government since it is only a miniscule number of people from the society that can pay for health insurance.

G C Chaturvedi, Join. Secretary and Mission Director, National Rural Health Mission, Ministry of Health and Family Welfare, opined that the healthcare sector will look different by the next decade. With an addition of 0.11 beds per annum and 100 million Indians covered by self-funded government schemes, most public private partnerships will reduce high out of pocket health insurance. Regulatory mechanisms also need to be enforced. The poor need to be insulated. Chaturvedi called for more corporate social responsibility adding that insurance companies are now grading cities to design customized policies.

According to Dr Prathap C Reddy, Chairman, CII National Healthcare Council and Chairman, Apollo Hospitals, health is the most neglected industry despite contributing to over five percent to the National Income. It is mainly because of the lack of awareness and disinterest among the masses on the whole.

Currently, there is one Primary Health Centre for every 30,000 people and only six maternity beds. For the 75 percent of Indian population residing in the rural areas, there are 31 percent of hospitals, 18 percent of beds and only 25 percent of qualified allopathic doctors. Insurance is no longer the domain of the rich. In the light of changing lifestyles, escalating medical prices and falling purchasing power, medical treatments are slipping out of one’s reach.

There are a host of insurance policies available today to choose from mandatory, public, private, employer based to community based schemes. Some hindrances to the growth of Health Insurance Industry include the 24 percent of below poverty line and 35 percent of illiterate population.

As per the study undertaken by the WHO, the insurance in India is mainly financed from out of pocket expenditure in comparison to all other countries involve in the study including China, Sri Lanka, Vietnam to mention a few. India has a huge population base; there is immense potential for the industry to grow in future. While the government is working on the regulatory issues on one hand, the private sector is looking at insurance expertise and product design.

Health insurance is an important thing to have if you get ill or injure yourself badly enough to need medical attention. There are many companies that will sell you health insurance. You may even get free health insurance from your employer. If you don’t get free health insurance, or health insurance that’s paid in part by your employer, then you might want to find some good, cheap health insurance to protect you if you get sick. The health insurance cost will depend largely on the type of care that you want to receive. There are many low cost health insurance companies out there that will offer you competitive rates. You just have to know which one is right for you, and which plan that they have will best fit your needs.

You can get health insurance quotes by calling insurance providers and discussing your options with them. If you already have life insurance or some other kinds of insurance, then you might want to contact your provider to see if you can get a reduced rate for having your health insurance leads on the same plan as your other insurances.

You can also get medical insurance quotes by browsing companies on the Internet. Most companies have websites that will show you the options that they have. Online health insurance quotes are a great way to gauge how much money you’ll have to pay. Most companies offer free health insurance online quotes. To get a free health insurance quote, you will need to answer a few questions. You may also be asked to provide some information regarding your current state of health and any pre-existing ailments that you currently have or have had in the past. By getting a health insurance quote from one company and then getting more from others, you will have a better idea of what your options are.

The Life Insurance Corporation of India (LIC) hopes to earn Rs 50 billion ($1.3 billion) in three months from its

proposed unit-linked health insurance policy. The target is much higher than the Rs 32 billion earned by all

non-life insurers last fiscal (2006-07). The corporation is waiting for clearance for the product from the

Insurance Regulatory and Development Authority (IRDA). LIC is hoping to launch the policy by Jan 2008 and

achieve its ambitious target.

According to D D Singh, Executive Director, LIC, the target of Rs 50 billion is achievable and LIC has achieved

similar targets earlier.He is betting on LIC’s army of one million agents, bank assurance partners, and its

existing client base.The policy covers a mix of hospital expenses and lump-sum payment towards major

surgeries. On the death of the policyholder, the balance in the investment fund goes to the nominee.

For claims processing, LIC has tied up with third party administrators (TPA) and banks. Once the TPAs process

the claim, they would advice LIC on the claim’s permissibility. The life insurer in turn would advise banks to issue

the claim cheque within 24 hours. Industry experts say health insurance is basically a game of distribution and

life insurers are better placed vis-à-vis non-life players.

They say there are around two million agents chasing individuals to sell life covers, whereas the number of

non-life agents is far lower. Interestingly, much of the health insurance sales logged by non-life insurers are

from active life insurance agents.

And the last model is the linked model where the NGO collects the premium and passes it on to insurance companies like the New India Insurance or the National Insurance Company. Patients go to private providers usually and get care. Unfortunately, here it is not a cashless system so they have to pay the provider at the time of illness. The patient then submits the bills to the insurance company via the NGO and receives the reimbursement (usually after a lag period of 1- 3 months). Advantage of this is that the risk is taken by the insurance company and not by the NGO, so even small groups like 5000 people can get insured in this sort of model.

There are currently more than 20 CHIs all over the country of which the biggest one is in Karnataka. The average premium collected is about Rs 20 per person per year and ranges from Rs. 20 to Rs. 100. This is what the poor can afford, not the Rs. 356 as announced by the Prime Minister of India under the Universal Health Insurance Programme 2003. Usually the health care providers are NGOs or private providers. Unfortunately the Government has not been involved too much in these schemes. Usually the benefit package includes hospitalisation cover and the maximum limits range from Rs. 1200 to Rs. 1 lakh (average is about Rs 5000). The admission rates range from about 6-10 admissions per 1000 insured, which is higher than the national average for the poorest quintile of the population. Administrative costs are low because usually the community and the NGO subsidise the administrative costs.

These CHIs have been effective in enrolling large numbers of members and in increasing access to health care for these members. However, while in Africa there is evidence to show that CHIs are effective in protecting the members from catastrophic health expenditure, this is not yet clear in India. Also many of these CHIs depend on external resources to finance the scheme. This implies that there is a need for explicit subsidies to make it work.

Conclusion
To conclude, the poorer sections of the community can become further impoverished by health care costs. They need to be protected by various social or community health schemes.s

In our country the Central government health scheme (CGHS) and Employees State Insurance Scheme (ESI) are two health insurance schemes for the formal sector. They cover about 3% of the population. Moreover the quality of CGHS and ESIs leaves much to be desired.

Then is the standard Mediclaim policy – the only voluntary health insurance product for the rest of the population. It is costly and usually its subscribers are limited to the upper class in urban areas. While private insurance companies have started operations in our country, very few of them are providing health insurance products in the rural areas.

To overcome these deficiencies, some NGOs have been experimenting with health insurance schemes for more than 10 to 15 years. Unfortunately these innovations have gone unnoticed in our country. These community health insurances (CHI) are meant for the informal sector and is a not for profit insurance scheme. In most schemes the members participate in its management.

Historically, CHIs started in countries like Belgium, Netherlands, and Germany etc. during the industrial revolution in the late 19 th century. Lot of people migrated to the urban areas to work in the factories. But they did not have access to health care. So the workers pooled money every week to create a sickness fund. And this sickness fund was used to finance the treatment of any sick employee.

Those sickness funds slowly merged and today we have the German Social Health Insurance, the Netherlands Social Health Insurance, the Belgian Social Health Insurance. So the community health insurances were the precursors to the current social health insurance. Today CHIs are common in Africa, in Japan, in Thailand, and China. In India also it started in the 1980’s though there has not been much documentation.

There are basically three types of CHI in our country. One is a provider model where the CHI is started by hospital e.g. ACCORD, the MGIMS Wardha scheme. The hospital insures the community by collecting a premium from them. In return, the patients get free OP care and very subsidized IP care. So, anytime, any member is sick and needs admission they can come to the hospital and do not have to pay any fees.

The other type, which has started recently is the insurer model, where the community pays premium to the NGO. The members then seek health care from any hospital and the NGO in turn pays the hospital the patients’ bills. The biggest example of this is in Karnataka, where the Yashaswani scheme insured 17 lakh farmers in the first year. The farmers, through the cooperative society, pay a premium of Rs 60 per person per year and in return they get surgical coverage for up to Rs 1 lakh per patient per year. This includes all types of surgeries, including CABGs (ctd).

Pulling the plug on inflated medical insurance claims, the Armed Forces Medical College (AFMC), Pune has brought out a first-of-its-kind standard treatment guideline that specifies the average treatment cost for 35 common diseases.

In many of the cases, the rates are a fraction of what patients have been claiming from insurance companies.

For instance, AFMC points out that the maximum charges for a caesarean section, one of the most common claims reaching insurance companies, will not exceed Rs 5,525 in a tertiary hospital with more than 100 beds.

The same procedure can also be carried out by spending Rs 393 in a single-doctor managed clinic.

On the other hand, insurance company officials said medical bills claimed by policy-holders touch Rs 40,000 to Rs 50,000 for a caesarean case.

Depending on the size of hospital and the seriousness of the disease, a patient suffering from pneumonia can complete his treatment by paying anything between Rs 360 to Rs 4,280.

Similarly, the total cost of treating Japanese Encephalitis could be in the range of Rs 348 to Rs 31,264, but not more.

Insurance companies said the claims are often five to ten times higher than the AFMC rates.

Insurers said the rates fixed by AFMC seem reasonable when compared with the claims reaching them today.

That’s because the peak rates are not just determined by the number of beds in the hospital but also by the complication of the illness that requires a patient to be admitted to a tertiary hospital.
HEALTH CHECK
The real cost of treating illnesses (Figures in Rs)
Disease Level 1 Level 2 Level 3 Level 4
Diabetes 34,225 35,119 57,027 66,229
Hypertension 4,236 3,909 4,517 23,753
Viral hepatitis 571 840 3,498 17,391
Oral malignancies 189 145 149 24,129
Level 1: Single doctor; 2: 10 to 30 beds; 3: 30 to 100 beds; 4: Above 100
Source: Armed Forces Medical College, Pune

The study was commissioned by the ministry of health and family welfare and the World Health Organisation (WHO).

The data is designed to help companies offering medical insurance improve their financial bottom line.

Life Insurance Corporation of India expects to provide health cover to at least one crore families within a year of the launch of its new health insurance product. It is also planning to launch a special senior citizen’s health insurance policy in due course, said LIC executive director and head, health insurance DD Singh.The product, likely to be called LIC Health Plus, will give the policyholder the option to take health insurance cover for his immediate family spouse and children.
The corporation is set to file the product next week with the insurance regulator. Although the first year target is very ambitious, LIC has the advantage of a million-plus agents. LIC has roped in reinsurer Munich Re to structure the new product. It is, however, yet to cement plans to set up a standalone health insurance company, said officials. Although details of health products are yet to be disclosed, LIC had indicated it was looking at a ‘floater’ plan where a sum insured could be shared by the family. LIC had also said it was looking at a health policy on the unit linked platform with a savings element.
LIC has tied up with eight third-party administrators to manage claims under the policy. LIC would not use TPAs to settle claims. For claims settlement, it has tied up with Syndicate Bank, Axis Bank and Bank of America. “Both non-life and life companies are keen on cashing in on the growing opportunities in the health insurance segment. They are on course to offer a slew of products, other than Mediclaim, to give more choice to consumers.
Featuring in this list are new entrants such as Apollo DKV, the second stand alone health insurance in the country. Right now less than 3% of the population has a health insurance cover. With health costs on the rise, the regulator also reckons there is scope for insurance companies to widen their reach and provide health care at affordable prices. Last year, public sector insurers had told agents that they will earn no commission on renewals or sale of fresh Mediclaim to people in the older age group. The rationale was these companies were making heavy losses due to the high claims ratio — between 120% to 170%. The companies had also put an extra load on policies sold to senior citizens.
The Insurance Regulatory Development Authority (IRDA) has now softened the blow on senior citizens, said IRDA chiarman CS Rao. Insurance companies have been debarred from hiking the premium by 50% compared to the previous year. Simply put, if the company had charged a premium of Rs 100, the premium cannot exceed Rs 150 at the time of renewals. The regulator plans to initiate action against insurers who do not adhere to this norm.

The New health Insurance players can look towards a substantial portion of the 200-300 million strong middle classes for health insurance business. This will in turn provide a fillip to the growth of the health care delivery system, both qualitatively and quantitatively.

The poor who are not in a position to pay the premiums demanded by the private players will have to be looked after by the public health care system till they graduate to the premium paying stage. The government can help in relieving some burden on the poorer sections of the society.

It is important to note that the private companies should be very cautious in preparing the organization and the executive channels to take care not to allow any possibility of formation or development of a nexus between the doctors and the policyholders.

The involvement of experienced and qualified personnel at various levels of organization would be very useful, and much more so if it is a medical doctor. It is also necessary to develop systematic structures to provide preventive health care and also too early detection of disease processes, to the policyholders. This aspect can help the insurer to contain the futuristic expenditure, as well as the risk management.

With the opening up of the Insurance sector to private players, particularly the foreign players (partial participation) the people of India particularly the middle class (about 200-300 million strong) are looking for a bright future and security throu the insurance sector.

This futuristic hope and expectations are more evident in the field of health Insurance sector, mainly due to the escalating medical care. Hence Health Insurance and its need for appropriate development in all respects is a must now and for future. The role of IRDA is going to be very important in monitoring the activities of insurance at large.

It is to be expected and rightly so, that the to-day’s customer // client is gradually becoming aware of his rights and expects ‘QUALITY’ and value added services from his vendor. The Health Insurance sector is no exception. The demands of the policyholders of a health insurance are the same if not more. People may compromise with any service to some extent, but not with his health and his demand for quality is rightly acceptable.

Surveys of self-employed individuals consistently show that one of their major concerns is the ability to buy affordable health insurance. One in 4 self-employed persons has no health insurance today even tough more than 70% of these people could afford to buy high quality health insurance if they had an effective buying strategy.

Have a budget and set realistic expectations: Realize that the purpose of insurance is to cover unexpected and otherwise unmanageable expenses. Most good plans cover “ordinary and necessary medical expenses” but not your health club membership.

Look for coverage that provides protection but avoid being drawn in by the marketing sizzle. Do not buy health insurance with the primary intention of picking up the cost of your existing ordinary medical expenses like prescriptions, routine dental care and annual check-ups.

Health plans exist for almost every budget. Remember that no one is excluded from receiving medical care for an acute condition because of the type of their health insurance plan, but rather medical treatment may be denied because they don’t have any insurance coverage at all.

Realize that there are trade-offs in every health plan. The lowest priced high quality health insurance plans excluded coverage for pre-existing medical conditions and require periodic re-enrollment. It is often better to take the less expensive insurance any pay for small-uncovered expenses yourself. But if you need to find “full takeover” coverage, then you cannot expect to be offered the insurer’s lowest rating.

Think short term: Most individual health insurance policies for self-employed persons actually stay in force less than a year. Buy the plan that offers you the best deal right now and do not worry about whether it will be available in a year. In 12 months, a whole new generation of health plans will be available. It would not be smart to keep the same plan for more than two years because new plans are evolving rapidly. A plan that you bought more than 2 years old would not likely represent the best value for you today.

Use the Internet: Technology now allows for online pricing and enrollment with policies issued within 24 hours. Savings have resulted in lower premium prices. Some plans offer premiums as low as Rs250/month.

Your neighbourhood LIC agent (or any other insurance agent for that matter) may soon be able to sell an array of health insurance plans and mediclaim policies, giving you the freedom to choose from a host of products. Currently, a health cover agent is hard to come by, and the options available with him are limited — they being that of a particular company. Things are in for a change.

The panel set up to look into senior citizens’ health insurance aspects has suggested convergence of agents for health insurance plans. This means that agents of any insurance company — private or public, or life or general — can sell health cover plans of any other company. In effect, the agent will be a broker of all health insurance plans available in India.

Currently, an agent can sell policies of only that particular company with which he is attached. The move to allow an agent to sell policies of all companies “will bring in more competition and prices are expected to come down,” said an official. “It is also expected to increase penetration of health cover in India, which is now abysmally low,” he added.

At present, the insurance industry (comprising both life and non-life), has about 30 lakh agents, all tied up with a particular company or the other. Hence, the options these agents offer are limited. If the recommendation becomes a law, each of the 20 lakh life insurance agents and 10 lakh general insurance advisors will be able to sell health plans from 17 general insurance companies and 16 life insurance companies.

However, not all life insurers have started selling health insurance policies. The largest life insurer, Life Insurance Corporation of India, which has about 13 lakh agents, has just announced plans to offer health insurance plans. It is working on products which are expected to hit the market in the next couple of months.

Many private life insurers have already started launching health plans. Bajaj Allianz Life Insurance is looking at a Rs 500-crore turnover from its health insurance business in 2007-08. Officials feel that the question of an agent pushing a particular policy, which gives him the highest commission, does not arise as most insurers are already paying a commission of 15%, the highest allowed.

However, some companies have reduced the commission for policies sold to senior citizens. “With a health insurance pool for senior citizens being proposed, losses from this segment are likely to decline drastically,” said an industry analyst. Every insurer will contribute an amount to this pool and will be eligible to withdraw from it in case they incur losses.
Press release:Economic Times