Health Insurances In India.pptx

Health Insurances In India
CHAIRPERSON
DR. ASHWINI NARASANNAVAR
ASSISTANT PROFESSOR
DEPT OF PUBLIC HEALTH
JNMC,
KAHER, BELGAVI.
BY
DR. MELKEY STEPHEN BUNYAN
MPH 1
DEPT OF PUBLIC HEALTH
JNMC,
KAHER, BELGAVI.

Melkey Stephen Bunyan
Topics we will be discussing
 Introduction about Insurances
 When was it Insurance Introduced?
 Why was Insurance Introduced?
 Importance of insurances
 General Classification of Insurance Plans
 Types of insurances and their uses
 Missuses happening

Introduction about Insurances
 Insurance is a means of protection from financial loss. It is a form of risk
management.
 And Health Insurance is something which is related to, over all health.
 The revenue is generated either by individuals paying a premium or by
employers contributing towards their employees or even the government
paying on behalf of the poor.
 This revenue (called premium) is pooled into an autonomous fund that is used
specifically to finance health care.

World
 About 7.3 Billion of people around the world →Without the coverage of insurance
 More than150 million people in 79 million households every year face financial
ruin as a result of large medical bills
 People becoming bankrupt/ indebt ness because of high medical bill– 40%
 About 43.1% of the Americans are without the coverage of insurance
 Lack of health insurance affects the health system as a whole, not only against
those who are insured

World
 People without health insurance -28 million
 People becoming bankrupt/indebtedness because of high medical bill-137
million
India
 People with health insurance : 30%

India
 About 80-90% of Indians are without the coverage of insurance
 People with health insurance-10-20%
↓ mandatory health insurance schemes like
ESIS, MEDICLAIM etc or through railways, defences,& security forces
 More than 40% of individuals, hospitalized in India borrow money or sell assets to
cover the costs (world bank 2002)
 People paying medical bill once hospitalized -58% of annual
income
 About 24% of people →Impoverished after hospitalization

When was Insurance Introduced?
 Health Insurance was launched in 1986.
 The National Health Insurance Program (Rashtriya Swasthya Bima Yojana-
RSBY) Launched in 2007.
 Is led by the Ministry of Health and was adopted by 29 states in 2014.
 It is funded 75% by the government and 25% by the states.
 Health insurance for the poorest citizens. Indian Prime Minister Narendra
Modi announced that the new system is expected to reach more than 500 million
people and is called "Modicare". The reform is still in progress and aims to install
universal social security in the country.

Why was Insurance introduced?
 The concept of health insurance first proposed by – Hugh Chamberlain from Peter Chamberlain
family in 1694
 Late 19th century, early health insurance → disability insurance, covering only cost of emergency
care for catastrophic injuries that could (and often did) lead to a disability.
 1850-Accident insurance→USA ( Franklin Health assurance company of Massachusetts)
↓ against
Rail road & steam boat accidents

 Middle to late 20th century→ traditional disability insurance evolved into modern
health insurance
 The first employer-sponsored group disability policy was issued in 1911
 Hospital and medical expense policies were introduced during the first half of the 20th
century.
 During 1920s- individual hospitals began offering services to individuals on a pre-paid
basis, eventually leading to the development of Blue Cross organizations

India
History of Insurance in India →1818
Oriental Life Insurance Company → Started By European in Kolkatta
Bombay mutual life insurance company → First Indian insurance
company started → 1870
First Insurance Legislation was enacted in 1938
Health insurance →Gone through several Phases
Govt of India opened Insurance sector by allowing private companies to
Solicit insurance →1999

Advantages of health insurance:
 People pay when they are healthy and able
 Patients do not have to meet their entire health care costs, they
contribute small amount
 There is minimal expenses at the time of illness
Disadvantages of health insurance:
 It is administratively more complex
 Conceptually, difficult to explain to the people
 One needs large numbers for it to be successful

Term
 Premium : The amount you or your employer pays in
exchange for insurance coverage
 Provider : Any person (Doctor, Nurse, Dentist) or institution
(Hospital or Clinic) that provides medical care
 Third Party Payer : Any payer for health care services other
than you.
 Ex : Insurance Company

 Deductible : The amount of money you must pay each
year to cover your medical care expenses before your
insurance policy starts paying.
 Co-insurance : The amount you are required to pay for
medical care in a fee for service plan after you have met
your deductible
 It is expressed in %
 Ex : In a claim : Insurance company – 80%
 Your Payment – 20%

 Co-Payment : Another way of sharing medical
cost .
 Ex : In a claim :
 - You pay - $ 5 for every visit to Doctor
 - Insurance Company pays– rest of the amount

Classification of Health Insurances
I. Public Sector : A. Schemes for Profit
B. Schemes for Not Profit
II. Private Sector : A. Schemes for Profit
B. Schemes for Not Profit

1. Public Sector
A. Schemes for Profit :
A. Ex- 1. LIC
- 2. General Insurance Company and
its 4 Subsidiaries
B. Schemes for Not Profit :
a. Mandatory
b. Employer based
c. Other Government initiatives for
disadvantaged groups

a. Mandatory :
i. For Central Govt Employees – CGHS
ii. For Industrial Workers – ESI
b. Employer based : Public Sector Schemes
- Railways, Defence and Security Forces
c. Other Govt Initiatives for Disadvantaged groups : 1. Workman’s Compensation
Act

2. Maternity Benefit Act
3. Plantation Labour Act
4. Rajiv Arogya Shree
5. Rashtriya Swasthya Bima Yojana
6. Janashri Bima Yojana
7. Krishi Shramika Samajika Suraksha Yojana
8. Schemes for un-organized sectors

2. Private Sector
A. Schemes for Profit:
Ex: 1. TATA AIG
2. ICICI Lombard
3. Bajaj Allianz
4. Royal Sundaram
5. Cholamandalam
6. IDFC, HDFC, and many more

Importance of insurances
 Covers the whole or a part of the risk of a person incurring medical expenses.
 The benefit is administered by a central organization, such as a government
agency, private business, or not-for-profit entity.
 And there are Supply side and Demand side Limitations.

General Classification of Insurance Plans
 Hospitalization
 Family Floater Health Insurance
 Pre-Existing Disease Coverage Plan
 Senior Citizen Health Insurance Plan
 Maternity Health Insurance
 Hospital daily cash benefits
 Critical Illness
 Disease Specific Special Plans

Types of insurances and their uses
 Broadly there are three major types of health insurance:
● Social Health Insurance (SHI)
● Private Health Insurance
● Community Health Insurance

Social Health Insurance
 Prevalent in European countries
 Employed contributes part of their salary to the insured fund
Contribution depends on the income.
 The employer also contributes a matching grant
 The govt fills in the deficit
 This is used to meet the health cost of the entire population
This type of insurance is similar to ESIS in India

Employees State Insurance Scheme(ESIS)
 The ESIS is a social security system which provides both cash and medical
benefits.
 semi-government body headed by the Union Minister of Labour as Chairman and
a Director General as the chief executive.
 The Act compulsorily covers :
a) all power using non-seasonal factories employing 10 or more persons;
b) all non-power using factories employing 20 or more employees and,
c) service establishments like shops, hotels restaurants, cinema, road transport and news
papers are covered.

 Contributions are paid through a payroll tax levied on the employer
 The benefits are comprehensive cover, including OP, IP and rehabilitation.
 All workers and their dependent relatives are eligible for the benefits.
 These include comprehensive health care at ESIS facilities,
 cash compensation for illness,
 maternity benefits,
 disability benefits,
 survivorship and
 funeral expenses in the event of death of the worker.
 ESIS has its own dispensaries, hospitals and medical staff.

Central Government Health Scheme
 The CGHS was introduced in 1954 The list of beneficiaries includes all categories
of current as well as former
 central government employees,
 members of Parliament,
 Supreme Court and
 High Court Judges
 The staff contributes a nominal amount (ranging from Rs 15 to Rs 150 per month)
from their salaries.

Private Health Insurance
 Popular in USA
 Here individuals purchase health insurance from
insurance companies
 They pay premium depending on the risk they have. Those with
higher risk will have to pay higher premium
 The premium depends on the benefits that individual wants (primary secondary or tertiary care)
 The insurance company reimburses the cost of health when the person falls sick
This is similar to “MEDICLAIM”health Insurance policies in our countries & affordable only to the elite
Even in USA, about 10% of population afford for this type of insurance

Community Health Insurance
 Definition: A not- for-profit health insurance, that is organized mainly for the informal
sector and is managed by the community.
Introduction:
 In India first Community health insurance was organized in 1955
 Most of them are organized by NGOs
 Today, there are more than 40 such schemes, covering 4 million people
objectives:
 To improve the access to the health care
 To subsidize the cost of medical care at primary, secondary and tertiary levels
 To reduce exploitation from money lenders
 To protect households from high medical expenditure
 To encourage peoples participation in health services
 To make medical facilities available at grassroot level

Pre-Requisites
 Reasons for initiating health insurance – high medical cost, financial barriers etc.
 A credible NGO that can organize the health insurance programme.
 The capacity within the organization to manage the programme.
 Community that can afford to pay the premium.
 A network of health care providers.

Specific “organized” organized communities have been targeted.
Eg Farmers cooperatives in Yashasvini,
students in students health home etc
Patterns of Community Health Insurance:
 Type 1 provider model
 Type 2 Insurer model
 Type 3 linked model:

TYPES OF COMMUNITY HEALTH INSURANCE:
1) Type 1 provider model:
NGO HOSPITAL
COMMUNITY
premium Health care
Eg KLE Hospital

Provider Model
 Here the hospital organizes the health insurance and is also provider of care
 Advantages
Cost of treatment is usually low
 Disadvantage:
Quality of care is low
Hospitals do not have much link with the community

 Type 2 Insurer model:
NGO HOSPITAL
COMMUNITY
HOSPITAL
Re-imbursement
Reimbursement
premium
Health care

In the Insurer Model
 Here NGO acts as a Insurer & organizes the insurance
 It collects premium from the community & then contacts specific hospitals to provide care
Advantage: Scheme is tailor made to meet the requirements of the community
Disadvantage : Insurance fund is in danger of becoming bankrupt

 Type 3 linked model:
INSURANCE COMPANY
NGO
COMMUNITY
HOSPITAL
Group premium Re-imbursement
Re-imbursement
premium

Linked Model
This is similar to the insurer model, where NGO insures with an
Insurance company
NGO acts as Intermediary between community & insurance company
Advantage: More financial stability as risk is spread over larger pool
Disadvantage: The scheme is very rigid & depends on the insurance company

Advantages of Community Health
Insurances
 Creating awareness by the community
 A community can afford to pay the premium
 Management of funds & maintenance by NGO
 The capacity within organization to manage the
programme
 Reason for instituting CHI: eg high medical costs,
financial barriers to health care etc

Disadvantages
 People pay less premium
 Cost & quality not standardized
 No financial stability
 Most Schemes during membership time
 Distance
 Cultural reasons like religion, cast, language etc.
 Opportunity cost of work days lost etc.

Characteristics
 People pay less premium
 Cost & quality not standardized
 Creating awareness in community
 Collection of premium by community
 NGOs - Management of funds
- And maintenance of records

 Many CHIs depend on donations
 No financial stability
 Unit of membership – family to entire village
 Most schemes collect premium during membership time
 Few schemes allow members to join the scheme around the year

 About 50% of schemes cover in-patient services only
 Another 50% cover both out-patient &
in-patient services
 Most of them exclude certain pre-existing conditions
 For promotion tools , NGOs adopt – awareness camps, street plays, puppet
shows etc..

1.Yashaswini Health Insurance
scheme (KARNATAKA)
Introduction :
 Started : 2002 – 2003
 Brainchild of Dr. Devi Shetty – Narayana Hrudalaya, Bangalore
 He proposed while addressing to Karnataka Milk Federation
 So, initial beneficiaries were – members of milk co-operative societies

 Now extended to
– Farmers of co-operative societies and banks, their family members
– Members of self help groups
 Covers 40% of farmers in state
 Self funded scheme, no insurance company involved
 Yashaswini insurance card given to beneficiaries
 World’s cheapest health insurance

 AIM
International standard health care to beneficiaries at Low cost premium
 Eligibility
- Age: newborn to 75 years
- Member of a co-operative society for atleast 6 months

FUNDING
 Initial contribution by various philanthropists – Rs. 2.0 billion
 Contribution by member
– Adult – Rs. 120 per year
– Child less than 18 Years – Rs.60 per year
15% rebate for family members of 5 or more

Mode of operation
 Collection of premium by farmers co-operatives
 Deposition of money in Yashaswini Trust account
 Independent administrator at Yashaswini Trust
 Network of 300 hospitals
 Hospitals get money from Govt. Health Department

Principle of Operation
Only 0.08% of population needs surgery in a year
Coverage of Benefits
 Free outpatient consultation
 Discounted tariffs for investigations
 Covers almost all diseases including – maternity, Newborn care, Dog bite, Snake bite,
Drowning, attack by animals, accidents – road, fire & electricity
 Rs 15,000 coverage

 All types of surgeries including – heart, brain, stomach, Eyes, Gall bladder,
kidneys, bones, spine etc.
 1st operation – Rs. 1 lakh limit
 2nd operation if needed – Rs. 2 lakh limit

2. SEWA (Self-Employed
Women’s Association, Gujarat.
 Started in 1992
 For Women working in informal sector and their families
 Provides health, life and assets insurance
 In association with National Insurance Company
 Premium : Rs. 85/- for whole life
 Additional payment of Rs.55/- for her husband

 Rs. 20/- per member paid to NIC
 NIC provides coverage to a maximum of
Rs. 2,000/- per person per year for hospitalization
 People can choose any public or private hospital

3. Tribhuvandas Foundation, Anand,
Gujarat.
 Rs. 20/- per member paid to NIC
 NIC provides coverage to a maximum of
Rs. 2,000/- per person per year for hospitalization
 People can choose any public or private hospital

4.The Malur Milk Co-operative, Karnataka
 Started in 1973
 Covers about 7,000 people in 3 villages
 Out patient and in patient health care are directly provided.

5. Sewagram, Wardha,
Maharashtra
 Started in 1972
 Covers about 15,000 people
 Cover 12 villages
 Out patient and in patient care given.

6. ACCORD (The Action for Community
Organization , Rehabilitation and
Development), Nilgiris. Tamil Nadu.
 Started in 1991
 Covers about 13,000 Adiwasis (tribal) people
 It is a group policy
 In association with New India Assurance Corporation

7. KKVS (Kadamalai Kalanjia Vattara
Sangam), Madurai
 Started in 2000
 Covers members of Women’s Self-help groups and their families
 Covers about 6,000 members

8. VHS (Voluntary Health
Services), Chennai.
 Started in 1963
 Both out patient and in patient care given
 Covers more than 1.3 lakh members

9. RAHA (Raigarh Ambikapur
Health Association), Chathisgarh
 Started in 1972
 Covers more than 72,000 members

10. Karuna Trust, Karnataka
 Started in 2002
 In association with
- UNDP (United Nations Development Programme)
- And state-owned National Insurance Company
 Poor people are covered

Future challenges
 Need of awareness among people about health insurances
 Pvt. Organizations are influencing more on people – Govt. also has to do
 Health Insurance per se, suffers from problems like – adverse selection, moral
hazard, high administrative cost, difficulty in calculating premium etc.

 Improve existing systems to make – equitable, affordable, quality health care,
accessible to poor and vulnerable groups
 Govt. & House holds together should pool their funds
 Different financing options for different target groups

 Standard treatment cost guidelines, nationally / globally
 Skill building for persons involved and capacity building of all stake holders.
 Success depends on its design, implementation and monitoring

Rashtiya Swasthiya Bima Yojana (RSBY)
 Ministry of Labour and Employment, Government of India
 Health insurance coverage for Below Poverty Line (BPL) families.
 Coverage up to Rs. 30,000/- for most of the diseases that require hospitalization.

 Coverage extends to five members of the family
 Which includes the head of household, spouse and up to three dependents.
 Beneficiaries need to pay only Rs. 30/- as registration fee.

Aam Aadmi Bima Yojana (ABY)
 Social Security Scheme for rural landless household was launched on 2nd
October, 2007.
 The head of the family or one earning member in the family of such a household
is covered under the scheme.
 The premium of Rs.200/- per person per annum.
 The member to be covered should be aged between 18 and 59 years.
 Fund is maintained by LIC.
 A free add-on benefit in the form of scholarship to children is also available under
the Scheme.

On Natual Death 30,000
On death due to accident / on permanent disability due
to accident ( loss of 2 eyes or 2 limbs )
75,000
On partial permanent disability due to accident( loss of
one eye or one limb )
37,500

Janashree Bima Yojana (JBY)
 Launched on 10th August 2000.
 The Scheme replaced Social Security Group Insurance Scheme (SSGIS) and Rural
Group Life Insurance Scheme (RGLIS).
 45 occupational groups have been covered under this scheme.
 Life insurance protection to people who are below poverty line or marginally above
poverty line.
 Persons between aged 18 years and 59 years and who are the members of the
identified 45 occupational groups are eligible to be covered under the Scheme.
 Note: Aam Admi Bima Yojana and Janashree Bima Yojana have been merged
into one scheme. It is renamed as “Aam Admi Bima Yojana” , effective from
01.01.2013.

Railway and Defence
 Railway and Defence have their own Hospitals.
 The Railway Hospitals and the Defence Hosptials respectively.
 Health services are free of cost.

 Equity in Distribution
 The Suppliers conflicts
 The Demand conflicts
 The scams related to Health Insurances.

Advantages/Needs of Health Insurance in
General
 Today person may be healthy, tomorrow ?
 People pay when they are healthy and able
 Patients do not have to meet their entire health care costs
 Increase in cost of medical care and treatment
 Cost may be beyond the reach of common man

Disadvantages of Health Insurance in
General
 More complex administrative process
 Difficult to convince people
 Needs more numbers (at least 5000) to succeed

References
 Bhalwar R, Vaidya R, Tilak R, Gupta RK, Kunte R, editor et.al. Text Book of Public
Health and Communtiy Medicine. 1st edition. Pune: Department of Community
Medicine, AFMC. New Delhi: WHO, India Office; 2009. p. 427-32.
 Wikipedia contributors. Health insurance in India [Internet]. Wikipedia, The Free
Encyclopedia; 2021 Dec 4, 07:31 UTC [cited 2021 Dec 20]. Available
from: https://en.wikipedia.org/w/index.php?title=Health_insurance_in_India&oldi
d=1058553237.
 National Health Insurance Schemes[Internet]. NHP Admin. NHP CC DC. 2015 Apr
4, [cited 2015 Jul 4]. Available from: National Health Insurance Schemes | National
Health Portal Of India (nhp.gov.in).

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Health Insurances In India.pptx

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