Diseases are inevitable in the life of each one of us and can lead to financial distress and indebtedness, besides physical pain, emotional stress, and loss of man hours and the wages consequently. Cutting-edge technology has brought tremendous improvements in the quality of healthcare but the cost has become un- affordable to the majority of citizens. While public hospitals neglect the poor, private ones exploit the well to do.  This requires health insurance; an   insurance against the risk of incurring medical expenses . However insurance penetration is poor due to ignorance and poor governance of health sector. Insurance is riddled with flaws like false bills by the beneficiary and denial of even genuine claims by the insurer. Another paradox is that health insurance is in fact a medi-claim policy wherein a sick person can claim reimbursement of specified charges spent on medical treatment. There is no mention of the practices of healthy life style for prevention of disease, which if practiced will prevent disease and would be less expensive for the insured as well as the insurer. This will also save man hours lost of the insured, during sickness period. This will lead to a healthy India and not depend on the mere slogan of ‘health for all’. Can the Government moot a ‘health insurance corporation’ instead of a disease –centric approach?

With less than 11 % of the country’s population covered by any kind of health insurance, and only 1 % by private medical insurance, it is a dream to think of universal health care.. In 2004 the Indian government introduced the Universal Health Insurance (UHI) scheme, which was aimed at those living below the poverty line. The UHI, also referred to as the “Government Rupee-a-Day” scheme (because the annual premium is Rs 365 per person), was largely unsuccessful at attracting the poor, mainly because the insurance companies, that are required to implement the scheme, found it “loss-making” because of adverse selection, and did not market or sell it sufficiently. The recently launched Rashtriya Swasthya Bachat Yojna is more successful as it has enrolled 1.95 crore beneficiaries as of 2010. The budget is largely state-funded with the central and state governments contributing 75% and 25% of the premium respectively, and a small enrollment fee of Rs 30 being charged from the beneficiaries. The scheme is more in the nature of a subsidy; it is targeted at people living below the poverty line.. Factors that run against the scheme are its relatively low coverage of Rs 30,000 and its continued focus on private hospitals.

The current ‘Jan Dhan Yojna’ by the new government may be a good beginning in the direction of universal health insurance.

Health insurance can take several forms

·         Premium: The amount the policy-holder or their sponsor (e.g. an employer) pays to the health plan to purchase health coverage.

·         Deductible: The amount that the insured must pay out-of-pocket before the health insurer pays its share. For example, policy-holders might have to pay one lac deductible, before any of their health care is covered by the health insurer.

·         Co-payment: The amount that the insured person must pay out of pocket before the health insurer pays for a particular service. For example, an insured person might pay a Rs 200/- co-payment for every doctor’s prescription. It can be a percentage of the total cost that insured person may also pay. For example, the patient might have to pay 20% of the cost of a surgery over and above a co-payment, while the insurance company pays the other 80%. There is always a limit fixed by the insurer.

 

It has been suggested that general insurers who deal in the non-life insurance market, which is dominated by mandated insurance such as accident, fire etc, do not have expertise in pricing and administering health insurance.

Suggested ways to cover the gaps in regulatory issues with private insurers are as follows.

·         Lay down a definition of a pre-existing illness to provide transparency.

·         Ensure that a health insurance contract is incontestable after it has remained in force for a specified period.

·         Allow automatic renewal of policies even after claims have been made.

·         Allow portability of health insurance without any bias.

·         Prescribe standards on point-of-sale and after-sales disclosures specific to health insurance.

·         Encouraging the evolution of specialized medical insurance corporations which includes separating and then hiving off the health business of companies into separate companies; ideal is to set up a national health insurance corporation on the pattern of Life insurance corporation

·         Using a national task force to rapidly increase the percentage covered to about 20% to generate a positive feedback cycle for growth.

Servicing issues

Insurance claims are frequently rejected due to minor, technical reasons leading to disputes. There is no analysis on what is and is not fair practice. Given that insurance companies are large monopolies, the consumer does not have an opportunity to negotiate the terms and conditions. This has been poignantly brought out in the recent impasse where individual policy holders were denied insurance on a cashless basis, though their policies entitled them to cashless insurance. Also the medical coverage may not be enough to sufficiently cover the cost of tests, surgeries and procedures that need to be done. There are several exclusions, for treatment of sexually transmitted diseases, AIDS, delivery and maternal conditions, etc. These are not socially and ethically acceptable.

The cost of health insurance is rising and is not easily affordable. In some cases reckless exploitation by the corporate hospitals, often with the connivance of insured person is bleeding the insurance companies white. There is a need for the ethical approach on the part of doctors and hospitals and being helpful on the part of insurer.

Dr. R.Kumar

Formerly from PGIMER, Convener society for promotion of ethical and affordable healthcare

May 27, 2015

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