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Health Insurance-An Overview

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  • 1. RajbirKaur,MPH,PU Overview of health insurance services
  • 2. RajbirKaur,MPH,PU Contents: • 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.
  • 3. RajbirKaur,MPH,PU • Health insurance in India. • Statistics • 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.
  • 4. RajbirKaur,MPH,PU 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.
  • 5. RajbirKaur,MPH,PU Terms • 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 force
  • 6. RajbirKaur,MPH,PU • 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 claims- 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.
  • 7. RajbirKaur,MPH,PU • 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.
  • 8. RajbirKaur,MPH,PU 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.
  • 9. RajbirKaur,MPH,PU 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
  • 10. RajbirKaur,MPH,PU • 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
  • 11. RajbirKaur,MPH,PU 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 healthTotal health expenditureexpenditure PublicPublic PrivatePrivate SocialSocial securitysecurity ExternallyExternally fundedfunded Tax-fundedTax-funded PrivatePrivate health ins.health ins. ExternallyExternally sourcedsourced Out-of-Out-of- pocketpocket Using central / stateUsing central / state revenues for healthrevenues for health Compulsory premiumCompulsory premium contributions tocontributions to healthhealth Channeling loans,Channeling loans, grants etc. togrants etc. to healthcarehealthcare Payments to healthPayments to health care providers forcare providers for servicesservices PremiumPremium contributions towardscontributions towards health supporthealth support Channeling donationsChanneling donations etc. to healthcareetc. to healthcare
  • 12. RajbirKaur,MPH,PU Most countries have a mix of public and private role for health care funding . . .
  • 13. RajbirKaur,MPH,PU PHE* (% of total) PHE* cover (%) Nature of PHE* cover PHI** (% of total) PHI** cover (%) Australia 68.9 100 • All permanent residents as enrolled under MediCare (tax- financed) 7.3 44.9 France 75.8 99.9 • Social security systems covering all residents 12.7 86.0 Greece 56.1 100 • All population (financed through tax and health insurance contributions) N.A. 10.0 Mexico 47.9 50 • Formal worker section and government employees • Voluntary system for others 2.5 2.8 Portugal 68.5 100 • All permanent residents as enrolled under NHS (tax- financed) 1.5 14.8 UK 80.9 100 • All permanent residents as enrolled under NHS (tax- financed) 3.3 10.0 US 44.2 24.7 • Above 65 or disabled (MediCare), poor (Medicaid) and poor children (SCHIP) 35.1 71.9 * PHE: Public health expenditure ** PHI: Private health insurance
  • 14. RajbirKaur,MPH,PU 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.
  • 15. RajbirKaur,MPH,PU • free to choose private insurance. • also possible, to take a full private insurance.
  • 16. RajbirKaur,MPH,PU Germany Compulsory health insurance • Health insurance companies responsible for compulsory health insurances. • These are public corporations.
  • 17. RajbirKaur,MPH,PU 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
  • 18. RajbirKaur,MPH,PU • 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
  • 19. RajbirKaur,MPH,PU 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.
  • 20. RajbirKaur,MPH,PU 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
  • 21. RajbirKaur,MPH,PU India • No universal health insurance in India • Limited to industrial workers and their families • Central Govt. Health Scheme(1954) • Employees state Insurance scheme(1948)
  • 22. RajbirKaur,MPH,PU Statistics • 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.
  • 23. RajbirKaur,MPH,PU 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 0% 100% Source of finance Means of finance 86% from out-of- pocket expenses 83% from private sector spending Health care financing in India 2002, % Source: WHO. CII-McKinsey. 2003.
  • 24. RajbirKaur,MPH,PU Traditional model for health insurance.
  • 25. RajbirKaur,MPH,PU The traditional model has focused on insurers or intermediaries working with the employed segment only as the front- end IndividualIndividual InsurerInsurer ProviderProvider GovernmentGovernment / Employer/ Employer Fixed feesFixed fees ServiceService chargescharges VoluntaryVoluntary premiumspremiums MandatoryMandatory premiumpremium MandatoryMandatory premiumpremium Could be allied toCould be allied to insurer or be ainsurer or be a governmentgovernment approvedapproved providerprovider IntermediariesIntermediaries Financial flows Service flows
  • 26. RajbirKaur,MPH,PU to one that allows the flexibility to serve different segments of the population, in an efficient manner . . .
  • 27. RajbirKaur,MPH,PU . . . 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-employedSelf-employed populationpopulation SalariedSalaried populationpopulation Unemployed /Unemployed / PoorPoor Government /Government / EmployersEmployers GovernmentGovernment PrivatePrivate hospitalshospitals PublicPublic hospitalshospitals ClinicsClinics ChemistsChemists Insurers / NGOsInsurers / NGOs:: Processing activities and claims settlementProcessing activities and claims settlement Insurers / NGOsInsurers / NGOs:: Enrolments and actuarial assessmentEnrolments and actuarial assessment Health care Health insurance Insurers / NGOs:Insurers / NGOs: Community health facilities / health educationCommunity health facilities / health education EmployerEmployer supportedsupported healthhealth insuranceinsurance GovernmentGovernment sponsoredsponsored healthhealth insuranceinsurance VoluntarilyVoluntarily funded healthfunded health insuranceinsurance CommunityCommunity healthhealth schemesschemes
  • 28. RajbirKaur,MPH,PU The experience of different countries suggests that private insurance has an important role to play in overall health care . . .
  • 29. RajbirKaur,MPH,PU • 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
  • 30. RajbirKaur,MPH,PU laws • 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.
  • 31. RajbirKaur,MPH,PU Authority-IRDA • 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.
  • 32. RajbirKaur,MPH,PU Oriental Insurance Corporation, National India Assurance Corporation, National Insurance Corporation, United India Insurance Corporation. • Overseas Mediclaim Insurance (Employment & Study) (Corporate Frequent Traveller) (Business & Holiday) • Personal Accident Insurance • Group Personal Accident Insurance • Jan Arogya Bima Policy • Medi Claim Policy
  • 33. RajbirKaur,MPH,PU Central Govt. Health Scheme • 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
  • 34. RajbirKaur,MPH,PU ESI corporation • Provides cash and medical benefits to industrial employees • Sickness, maternity and employment injury
  • 35. RajbirKaur,MPH,PU List of private banks • Bajaj Alliaz • Cholamandalam • ICICI Lombard • Iffco-Tokio • National Insurance • New India • Oriental Insurance • Reliance • Royal Sundaram • Star Health
  • 36. RajbirKaur,MPH,PU insurance cover applies to various costs 1. care through general practitioner 2. care services 3. artificial limbs 4. pharmaceutical products 5. medical aid 6. analysis and laboratory examination stay and treatment in care facilities 7. rehabilitation clinics and surgical stations part of the transportation costs
  • 37. RajbirKaur,MPH,PU 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.
  • 38. RajbirKaur,MPH,PU 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.
  • 39. RajbirKaur,MPH,PU key issue related to health care financing in India lack of adequate insurance
  • 40. RajbirKaur,MPH,PU . .• Limited coverage – 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 • System leakages – 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
  • 41. RajbirKaur,MPH,PU 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.
  • 42. RajbirKaur,MPH,PU 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.
  • 43. RajbirKaur,MPH,PU 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.
  • 44. RajbirKaur,MPH,PU Bajaj Allianz general insurance Silver Health National Insurance Varishtha Mediclaim New India Assurance Sr. Citizen Mediclaim Oriental Insurance Health of Privileged Elder Star Health Allied Sr. Citizen Red Carpet United India Insurance Sr. Citizen Mediclaim • Critical Plans-3 types-Rider, Term & Regular • Senior citizens specific covers
  • 45. RajbirKaur,MPH,PU • 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 ICICI Prulife Cancer, Diabetes Star Health Diabetes
  • 46. RajbirKaur,MPH,PU 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.
  • 47. RajbirKaur,MPH,PU Conclusion • 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
  • 48. RajbirKaur,MPH,PU References • rparera@kpmg.comrparera@kpmg.com • www.in.kpmg.comwww.in.kpmg.com • World Health OrganizationWorld Health Organization • Park K.(!8th Edition):Park K.(!8th Edition): Preventive and SocialPreventive and Social MedicineMedicine • Rowitz Louis:Rowitz Louis: Public Health for the 21stPublic Health for the 21st CenturyCentury • Merson Micheal H.:International PublicMerson Micheal H.:International Public HealthHealth • www.google.comwww.google.com
  • 49. RajbirKaur,MPH,PU • The Tribune • The Indian Express-Money Express Special Thanks to Mr.Gurpreet Singh Senior Relationship Manager ICICI direct
  • 50. RajbirKaur,MPH,PU