Health Insurance-An OverviewPresentation Transcript
Overview of health insurance services
Meaning of health insurance.
Some of the key terms used.
History of health insurance.
Model of total health expenditure.
Table of different countries for health expenditure and private health insurance.
Health insurance in different countries.
Health insurance in India.
Table of health care financing
Typical model of health insurance.
Proposed model of health insurance.
Role of private health insurance
Laws and authorities
List of Public Sector Banks.
List of Private banks.
Coverage of health insurance
Benefits of health insurance.
Drawbacks of health insurance.
How to go for insurance.
Health Insurance: Meaning
prepayment plan providing services or cash indemnities for medical care needed in times of illness or disability.
all about protection- against an illness.
Policy – the legal document issued by the insurance company that outlines the terms and conditions of the insurance .
Policyholder – the person who buys the insurance; also called the "insured."
Premium – the payment required to keep your insurance policy in fo rce
Claim –. a person's request for payment by an insurer of a loss covered by a policy
first-party claims - claims to your own insurance company
third-party clai ms - claims made by one person against another person's company
Exclusion – specific conditions or circumstances listed in the policy that are not covered by the policy.
Occurrence – an accident that results in bodily injury during the period of an insurance policy.
Peril – the cause of loss or damage .
Risk – the chance of a loss.
Underwriting – the process of selecting risks for insurance, and determining how much to charge to insure these risks and which coverage to provide.
Health insurance history
(1883–84) in Germany Compulsory accident and sickness insurance was initiated by Otto von Bismarck
adopted by Great Britain, France, Chile, the Soviet Union, and other nations after World War I.
Act of 1946 , In Britain the National Health Insurance which went into effect in 1948, provided the most comprehensive compulsory medical care plan.
individual obtained free medical attention (participating doctor national health service)
cost was met by the national government and local taxation
nominal charges for some services were levied since then
1958 the Canadian Hospital and Diagnoses Act provided full hospital services almost free of charge in public wards
more comprehensive coverage added in 1967 ( financed by the federal government ; administered by the provinces)
National health insurance- widely adopted in Europe and parts of Asia.
United States –the only Western industrial nation without comprehensive national health insurance
Health expenditure Tax-based and out-of-pocket expenses are direct expense related outlays Health insurance involves a fund pool for future health care External fund sources rely on donations, grants Total health expenditure Public Private Social security Externally funded Tax-funded Private health ins. Externally sourced Out-of-pocket
Using central / state revenues for health
Compulsory premium contributions to health
Channeling loans, grants etc. to healthcare
Payments to health care providers for services
Premium contributions towards health support
Channeling donations etc. to healthcare
Most countries have a mix of public and private role for health care funding . . .
* PHE: Public health expenditure ** PHI: Private health insurance 44.9 7.3
All permanent residents as enrolled under MediCare (tax-financed)
100 68.9 Australia 71.9 35.1
Above 65 or disabled (MediCare), poor (Medicaid) and poor children (SCHIP)
24.7 44.2 US 10.0 3.3
All permanent residents as enrolled under NHS (tax-financed)
100 80.9 UK 14.8 1.5
All permanent residents as enrolled under NHS (tax-financed)
All population (financed through tax and health insurance contributions)
100 Greece 86.0 12.7
Social security systems covering all residents
99.9 France PHI** cover (%) PHI** (% of total) Nature of PHE* cover PHE* cover (%)
UK The National Health Service (NHS)
Founded over 50 years ago .
defining element - principle of equal treatment
equal access to all necessary medical services –regardless of their financial status
basic medical services are guaranteed to all residents of the UK.
Medical treatment is free .
free to choose private insurance.
also possible, to take a full private insurance.
Germany Compulsory health insurance
Health insurance companies responsible for compulsory health insurances.
These are public corporations .
France Régime général d`assurance maladie
Everyone (a domicile of France) receives protection through insurance
Principle of solidarity
covers financial risks caused by illness, maternity, disability and death
offers financial protection in case of industrial accidents and occupational diseases
also special health insurances apart from the general health insurance, for · self-employed persons, artists and traders (3.1%) · farmers (4.2%) · some occupational groups like sailors, miners or railway men
Couverture maladie universelle
students and persons , who do not belong to the area of responsibility of a professional insurance system
The CMU came into force on January 1, 2000 in order to introduce compulsory health insurance not connected with any occupation.
Australia Lifetime Health Cover
Lifetime Health Cover is a Government initiative
health funds charged differently premiums based on age of member
recognizes the length of time of private health insurance -rewards by offering lower premiums.
People taking hospital cover early in life charged lower premiums throughout their life
No universal health insurance in India
Limited to industrial workers and their families
Central Govt. Health Scheme(1954)
Employees state Insurance scheme(1948)
Yet, 80 per cent of Indian population is without life insurance cover
this part of the population subject to weak social security and pension systems with hardly any old age income security.
The proportion of insurance in health care financing in India is extremely low . . . Public spending in health care is very low at 17% and the National Health Policy has recognized this More than 86% of healthcare financing is through unplanned or, non-contributory spending 86% from out-of-pocket expenses 83% from private sector spending Health care financing in India 2002, % Source: WHO. CII-McKinsey. 2003.
Traditional model for health insurance.
The traditional model has focused on insurers or intermediaries working with the employed segment only as the front-end Individual Insurer Provider Government / Employer
Could be allied to insurer or be a government approved provider
Intermediaries Financial flows Service flows
to one that allows the flexibility to serve different segments of the population, in an efficient manner . . .
. . . Health insurance providers may need to align themselves to overall health care including financing, preventive health care and health outreach in order to grow coverage Regulations and policy must be designed to encourage this Self-employed population Salaried population Unemployed / Poor Government / Employers Government Private hospitals Public hospitals Clinics Chemists Insurers / NGOs : Processing activities and claims settlement Insurers / NGOs : Enrolments and actuarial assessment Health care Health insurance Insurers / NGOs: Community health facilities / health education Employer supported health insurance Government sponsored health insurance Voluntarily funded health insurance Community health schemes
The experience of different countries suggests that private insurance has an important role to play in overall health care . . .
Private health insurance has enhanced access to timely hospital care
e.g. In UK, waiting time reduction and private health insurance coverage have led to a virtuous cycle
Private health insurance has increased service capacity and supply by injecting financial resources up front
e.g. In the US, private health insurance has financed hospitals in terms of doctors and facilities
Private health insurance increases choice (provider, benefits, cost-sharing) for the individual
e.g. In Australia, private health insurance offer the option of access to spare capacity and elective care in non-public institutions
Private health insurance has led to expansion of health coverage and expenditure in other countries However, regulation as well as the role of public health expenditure cannot be ignored
Insurance regulation formally began in India with the passing of the Life Insurance Companies Act of 1912 and the provident fund Act of 1912
Insurance is a federal subject in India . There are two legislations that govern the sector- The Insurance Act- 1938 and the IRDA Act- 1999.
The General Insurance Corporation has regulated some of the main health policies that are offered by the Indian Insurance Companies.
United India Insurance Co Ltd.,
New India Assurance Co Ltd.,
Oriental Insurance Co Ltd. and
National Insurance Co Ltd.
Oriental Insurance Corporation, National India Assurance Corporation, National Insurance Corporation, United India Insurance Corporation.
Provides comprehensive medical care to central govt. employees
Mutual advantage to both employee and employer
Started in 1954 with 16 allopathic dispensaries covering 2.3 lac beneficiaries
Now 320 dispensaries/hospitals in various systems of medicines covering 42.76 lac beneficiaries
Provides cash and medical benefits to industrial employees
Sickness, maternity and employment injury
List of private banks
insurance cover applies to various costs
care through general practitioner
analysis and laboratory examination
stay and treatment in care facilities
7. rehabilitation clinics and surgical stations part of the transportation costs
9. care in case of maternity; also aid care and hospital stay
10.medical observation of newly born children
11.Care services, which are required due to the state of health, will be covered for people in need of care.
Benefits of insurance
timely coverage for regular or at least with annual health check ups.
ability to afford for the medical expenses.
Uninsured Pregnant women use lesser services
get screening or preventive services.
key issue related to health care financing in India
lack of adequate insurance
Only around 10% of the population is covered
Geographic spread in terms of health care facilities and financing awareness is limited
Selection criteria by suppliers often restricts the poor (and more likely to be ill) from affordable pre-payment schemes
Provider malpractices leading to over-charging or pre-selection / selective recommendation
Lack of universal schemes
Limitations in terms of coverage of illnesses as well as treatment options
Alternative therapies often not considered / included under insurance
The extent of coverage as well as the type of coverage are the key issues related to insurance penetration Some companies have put-off plans for India due to potential leakages in the system
Criticism of insurance companies
modern insurance companies –indulging in money-making businesses with little interest in insurance.
the purpose of insurance is to spread risk so the reluctance of insurance companies to take on high-risk cases to run counter to the principle of insurance.
Other criticisms include :
Insurance policies contain too many exclusion clauses.
Most insurance companies now use call centres and staff attempt to answer questions by reading from a script. It is difficult to speak to anybody with expert knowledge.
How to go for insurance- basic knowledge
If you are healthy- Basic Health Insurance Plan
If at hereditary risk/poor health-Critical Illness Policy
-plays lump sum when holder is diagnosed with one of specified critical illness. ( cancer, CAD, Heart attack, major organ transplant, paralysis, stroke)
-after lump sum is paid policy terminates
-these policies are far cheaper than basic health policies, so can’t depend alone on these.
Critical Plans-3 types-Rider, Term & Regular
Senior citizens specific covers
Sr. Citizen Mediclaim United India Insurance Sr. Citizen Red Carpet Star Health Allied Health of Privileged Elder Oriental Insurance Sr. Citizen Mediclaim New India Assurance Varishtha Mediclaim National Insurance Silver Health Bajaj Allianz general insurance
Family Health Cover- Floater Plans
covers each member separately
gives higher coverage at lower cost per person
Disease Specific Plans- covers specific diseases including pre-existing ones
good as regular checkups are done
regular screening & early detection
Diabetes Star Health Cancer, Diabetes ICICI Prulife
Below Poverty Line
Union Budget- 15% hike on Health
Punjab & Haryana (April 1,2008)
Arogaya Kosh Yojana under NHIS-2cr for free diagnostic tests
Heart ailments, blood diseases, cancer, ENT, Coronary bypass surgery covered.
Vikalp Yojana- public-private partnership, free consultancy and medicines for registered BPL families in private hospitals & clinics.
Growth potential for the insurance sector is immense.
Consideration required to poor and unemployed.
Private health insurance has positive role to play.
Insurance sector needs to widen its scope from only providing treatment facilities to promotive and preventive health care
World Health Organization
Park K.(!8th Edition): Preventive and Social Medicine