Voluntry health insurance


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  • The Bill also facilitated the establishment of an authority to protect the interests of the insurance holders by regulating, promoting and ensuring orderly growth of the insurance industry.
  • The unregulated environment and a near total absence of any form of control over providers regarding quality, cost or data-sharing, makes it difficult for proper underwriting and actuarial premium setting.There is total lack of any effort to promote health insurance through campaigns regarding the benefits of health insurance and lack of innovation to make the policies suitable to the needs of the people.There is an acute shortage of supply of services in rural areas. Not only is there non-availability of hospitals for simple surgeries, but several parts of the country have barely one or two hospitals with specialist services.High prevalence levels of risks that could affect a majority of the people at the same time could make the enterprise unviable as there would be no gains in forming large pools. The result could be higher premiums. In India this is an important factor due to the large load of communicable diseases. A study of claims (Bhat 2002) found that 22% of total claims were for communicable diseases.
  • Voluntry health insurance

    2. 2. Table of contents<br />Introduction – health Insurance scenario<br />Market share<br />VHI ( Voluntary health insurance)<br />Types of plans<br />VHI providers<br />How health insurance works<br />Increased need of VHI<br />Concerns and challenges<br />
    4. 4. HEALTHINSURANCE<br />Health insurance in a narrow sense would be an individual or group purchasing health care coverage in advance by paying a fee called premium.<br />In its broader sense, it would be any arrangement that helps to defer, delay, reduce or altogether avoid payment for health care incurred by individuals and households<br />
    5. 5. Health Scenario In India<br />Total Expenditure on health in India is nearly 6% of the entire GDP<br />Government spending is less than 25% against the average spending of 30-40 % in other developing countries.<br />Indian health insurance industry stands at INR 5,125 crores with only a small Section of the total population (around 2%) being covered so far.<br />CAGR of around 35 % (FY2002-08)<br />Health Insurance industry in India is one of the fastest growing segments.<br />
    6. 6. India Health Insurance Market Size & Growth Rate<br />
    7. 7. MARKET SHARE<br />
    8. 8. VARIOUS HEALTH INSURANCE PRODUCTS AVAILABLE IN INDIA <br />The existing health insurance schemes available in India <br />can be broadly categorized as: <br />1. Voluntary health insurance schemes or private-for-profit schemes <br />2. Mandatory health insurance schemes or government run schemes (namely ESIS, CGHS) <br />3. Insurance offered by NGOs/Community based health insurance <br />4. Employer based schemes <br />
    9. 9. Voluntary health insurance schemes or private-for-profit schemes <br />In private insurance, buyers are willing to pay premium to an insurance company that pools similar risks and insures them for health related expenses. <br />The main distinction is that the premiums are set at a level, which are based on assessment of risk status of the consumer (or of the group of employees) and the level of benefits provided, rather than as a proportion of consumer’s income. <br />
    10. 10. Types of plans<br />Group Insurance Plan<br /> Group insurance offers medical insurance to the groups like employees of a company, members of an association or a co-operative society and so on.<br />Individual Insurance Plan<br /> Individual insurance caters to the special needs of the individuals. Premium is comparatively high for this kind of insurance.<br />Floater Insurance Plan<br /> Floater plan can be availed individually or by all the members of the family. It provides single premium for the entire family<br />
    11. 11. Types of plans cont…..<br />Health insurance plans can be further categorized as:<br />Med claim Policy<br />Personal Accident - Individual<br />Personal Accident - Family<br />Insurance for Group Accident<br />Jan ArogyaBima Policy<br />BhavishyaArogya Policy (Insurance for senior citizens)<br />Traffic Accident Policy<br />Overseas Med claim Policy<br />
    12. 12. Nowadays, few more health plans are readily available in the market as:<br />Health Plan for Tax Saver- This is at premium policy of fixed rate under which the customers can save up to the amount of Rs. 3,366 as per Indian Income Tax Act, Section 80 D.<br />Family Floater Health Plan - This policy takes the responsibility of the expenses on hospitalization of the whole family.<br />Critical Care Plan - In case of serious illness like stroke, heart attack, cancer, kidney failure or paralysis this plan offers a lump-sum benefit on diagnosed disease. This policy can also be used for the benefit of Personal Accident and Permanent Total Disablement (PTD).<br />
    13. 13. Personal Accident Plan - It is a cover against permanent partial disablement (PPD), accidental death and permanent total disablement (PTD).<br />Health Guard - It offers access to the cashless facility at various hospitals all over India and also medical reimbursement for entire hospitalization expenses.<br />Hospital Cash -It provides extended financial support at the most required time.<br />Personal Guard - It is cover against accidents and accidental injuries.<br />Silver Health - This insurance plan is a special scheme that takes care of expensive medical treatments for people aged between 46 to 75 years.<br />
    14. 14. VHI providers<br />In the public sector,<br /> General Insurance Corporation (GIC) and its four subsidiary <br />companies <br />National Insurance Corporation, <br />New India Assurance Company, <br />Oriental Insurance Company and<br /> United Insurance Company) <br />Life Insurance Corporation (LIC) of India provide voluntary <br />insurance schemes<br />Private sector:<br /> Bajaj Alliance, ICICI, Royal Sundaram, and Cholamandalam<br /> and many others are offering health insurance schemes.<br />
    15. 15. Change in market share <br />
    16. 16. MEDICAL INSURANCE SCHEME OR MEDICLAIM<br />Of the various schemes offered, Mediclaim is the main product of the GIC.<br />Mediclaim was introduced in November 1986 and it covers individuals and groups with persons aged 5 – 80 yrs. Children (3 months – 5 yrs) are covered with their parents. <br />This scheme provides for reimbursement of medical expenses (now offers cashless scheme) by an individual towards hospitalization and domiciliary hospitalization as per the sum insured. <br />There are exclusions and pre-existing disease clauses. <br />Premiums are calculated based on age and the sum Insured, which in turn varies from Rs 15 000 to Rs 5 00 000.<br />Another scheme, namely the Jan Arogya Bima policy specifically targets the poor population groups. <br />
    17. 17. IRDA<br />With the passing of the Insurance Regulatory Development Authority Bill (IRDA) in 1999 the insurance sector was opened to private and foreign participation, thereby paving the way for the entry of private health insurance companies. <br />The bill allows foreign promoters to hold paid up capital of up to 26 percent in an Indian company and requires them to have a capital of Rs 100 crore along with a business plan to begin its operations.<br />Currently, a few companies such as Bajaj Alliance, ICICI, Royal Sundaram, and Cholamandalam among others are offering health insurance schemes.<br />
    18. 18. VHI schemes - examples<br />The companies providing various kinds of health insurance schemes are: Max NewYork Life Insurance<br /><ul><li>MedicashPlan, Wellness plan, Safety Net </li></ul>New India Assurance Company Ltd.<br /><ul><li>Universal Health Insurance Scheme
    19. 19. Medical reimbursement 
    20. 20. Personal Accident Cover 
    21. 21. Disability Cover </li></ul>Apollo DKV Insurance Company Ltd<br /><ul><li>Easy Health Insurance Plan 
    22. 22. Maxima Health Plan 
    23. 23. Individual Personal Accident Plan </li></li></ul><li>How Health Insurance Works<br />Premium: As health coverage the policy-holder has to pay each month.<br />Deductible: It is must for a holder to pay out-of-pocket before the health plan actually pays its share.<br />Coinsurance: In this a percentage of the total cost of the health insurance is to be paid rather than paying a fixed amount up front.<br />
    24. 24. Cont…<br />Exclusions: Under this the customer generally pays the full cost of non-covered or excluded services.<br />Coverage Limits: The insured person is expected to pay for specific services, in case if health plan's maximum payment limit exceeds. In other words the remaining costs of the opted health plan will be paid by the bearer.<br />Out-of-pocket maximums: In this case the health plan reimburses all further costs of the members when they have actually end up paying out of their pockets.<br />
    25. 25. Premium calculation<br />Premiums are calculated based on the insurance product (or plan) purchased by the individual<br />To decide on the amount that one would need to shell out, the insurance company takes all costs into considerations. Like :<br />Mortality rate : Age and heredity<br />Marketing and administration expenses<br />Adjusted or Modified Community Rating<br />Rating bands<br />Adjusted and modified community rating<br />
    26. 26. Increased need of VHI in last few years – why?<br />Indians at greater risk<br /><ul><li>Lifestyles have changed
    27. 27. Rare non-communicable diseases are now common</li></ul>The Cost Factor<br /><ul><li>Medical care is unbelievably </li></ul> expensive<br /><ul><li>Incomplete financial planning
    28. 28. Indirect costs add to </li></ul> the financial burden<br />
    29. 29. Concerns and Challenges<br />Reasons for poor penetration of voluntry health insurance<br />Lack of regulations and control on provider behavior<br />Unaffordable premiums and high claim ratios<br />Reluctance of the health insurance companies to promote their products and lack of innovation<br />Too many exclusions and administrative procedures<br />Inadequate supply of services<br />Co-variate risks<br />India is a low-income country with 26% population living below the poverty line, and 35% illiterate population with skewed health risks. <br />
    30. 30. Complicated VHI schemes<br />
    31. 31. Common perception….<br />
    32. 32. VHI…really serving the purpose?<br />
    33. 33. You can get sick only once….<br />
    35. 35. Thank You<br />