32188711 Health Insurance

8/19/2019 32188711 Health Insurance

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Table of contents

CHAPTER I: INTRODUCTION

1.1. Background

1.2. Significance of the study

1.3. Scope and objectives

1.4. Limitations

CHAPTER II: PROFILE OF THE COMPANY

2.1. INURANCE IN INDIA

2.11. HS!"#$ "% &S'#(&)* & &+(

2.12. ,L*S!"&*S & &+(& L%* &S'#(&)* B'S&*SS

2.13. ,-"#!(&! ,L*S!"&*S & !H* &+(& &S'#(&)* B'S&*SS

2.14. *)"&",) -"L)$ )"&!*! (&+ ,-*#(!/*S "% LB*#(LS(!"&

"% &S'#(&)* S*)!"#

2.10. LS! "% &S'#(&)* )",-(&*S & &+(

2.1. B(S) %'&)!"&S "% &S'#(&)*

2.1. !"- &S'#(&)* )",-(&*S & &+(

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2.2. HEALTH INURANCE IN INDIA

2.21.H*(L!H &S'#(&)* & &+(6 )'##*&! S)*&(#"

2.22. )"&S',*# (&+ S")(L -*#S-*)!/* "& H*(L!H &S'#*&)*

2.23. ,-()! "% H*(L!H &S'#(&)* "& S!#')!'#* (&+ 7'(L!$ "%

-#/(!* -#"/S"&

2.24. #"L* "% #*'L(!"#S

2.20. /(#"'S H*(L!H &S'#(&)* -#"+')!S (/(L(BL* & &+(

2.2.*&*#(L &S'#(&)* /S. L%* &S'#(&)*

2.28. H*(L!H &S'#(&)* %"# S*&"# )!9*&S

2.2. ,"+*LS "% L"& !*#, )(#* & "!H*# )"'&!#*S

1: *#,(&$

2: ;(-(&3: '&!*+ S!(!*S

4: '&!*+ 5&+",

2.2


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3.4. S"'#)*S "% +(!(

CHAPTER I": ANALYI OF DATA

4.1. H*(L!H &S'#(&)* & &+( "--"'#!'&!$=)H(LL*&*S (&+

)"&)*#&S

4.2. /"L'&!(#$ H*(L!H S)H*,*S "# -#/(!* >%"#?-#"%! S)H*,*

4.3. &S'#(&)* "%%*#*+ B$ &"@S A )",,'&!$?B(S*+ H*(L!H

&S'#(&)*

4.4. S")(L &S'#(&)* "# ,(&+(!"#$ H*(L!H &S'#(&)* S)H*,*S

"# "/*#&,*&! #'& S)H*,*S nameCy the *SS= )HS:

4.0. H*(L!H &S'#(&)* &!(!/*S B$ S!(!* "/*#&,*&!S

CHAPTER I": UMMARY AND CONCLUION

CHAPTER ": U!!ETION AND RECCOMENDATION

#I#ILIO!RAPHY

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CHAPTER I: INTRODUCTION

1.1. Background

1.2. Scope of the study

1.3. #esearch objectives

1.4. Limitations

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1.1. #ac$%&o'n(

"ver the Cast 0D years ndia has achieved a Cot in terms of heaCth improvement. But stiCC

ndia is Eay behind many fast deveCoping countries such as )hina= /ietnam and Sri

Lanka in heaCth indicators Satia et aC 1


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f it is EeCC managed then it can improve access to care and heaCth status in the country

very rapidCy.

HeaCth insurance as it is different from other segments of insurance business is more

compCeG because of serious confCicts arising out of adverse seCection= moraC haard= and

information gap probCems. %or eGampCe= eGperiences from other countries suggest that

the entry of private firms into the heaCth insurance sector= if not properCy reguCated= does

have adverse conseFuences for the costs of care= eFuity= consumer satisfaction= fraud and

ethicaC standards. !he #+( EouCd have a significant roCe in the reguCation of this sector

and responsibiCity to minimise the unintended conseFuences of this change.

HeaCth sector poCicy formuCation= assessment and impCementation is an eGtremeCy

compCeG task especiaCCy in a changing epidemioCogicaC= institutionaC= technoCogicaC= and

poCiticaC scenario. %urther= given the institutionaC compCeGity of our heaCth sector

programmes and the pCuraCistic character of heaCth care providers= heaCth sector reform

strategies in the conteGt of heaCth insurance that have evoCved eCseEhere may have very

CittCe suitabiCity to our country situation. -roper understanding of the ndian heaCth

situation and appCication of the principCes of insurance keeping in vieE the sociaC reaCities

and nationaC objective are important.

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1.2. )%n)f)cance of t*e st'(+

!his dissertation presents revieE of heaCth insurance situation in ndia ? the opportunities

it provides= the chaCCenges it faces and the concerns it raises. ( discussion of theimpCications of privatiation of insurance on heaCth sector from various perspectives and

hoE it EiCC shape the character of our heaCth care system is aCso attempted. !he paper

foCCoEing areas6

*conomic poCicy conteGt

HeaCth financing in ndia

HeaCth insurance scenario in ndia

HeaCth insurance for the poor

)onsumer perspective on heaCth insurance

,odeCs of heaCth insurance in other countries

)ompetitive anaCysis of heaCth insurance sector in ndia

1.,. Resea&c* ob-ect)es

To 'n(e&stan( t*e /os)t)on of *ealt* )ns'&ance )n In()a

To 'n(e&stan( t*e ()ffe&ent sc*e0es of *ealt* )ns'&ance /&o)(e( b+

()ffe&ent co0/an)es.

To f)n( o't t*e f't'&e of Ins'&ance secto& )n In()a

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1.. L)0)tat)ons

1. !he study is confined to Cimited period.

2. (ccuracy of the study is pureCy based on the secondary data.

3. !he anaCysis and concCusion made by me as per my Cimited understanding and

there may be something variation in the actuaC situation.

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CHAPTER II: PROFILE OF THE COMPANY

2.1. HITORY

OF

INURANCE IN

INDIA

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2.11. HITORY OF INURANCE IN INDIA

n ndia= insurance has a deep?rooted history. t finds mention in the Eritings of ,anu

Manusmrithi := $agnavaCkya Dharmasastra : and 5autiCya Arthasastra :. !he Eritings

taCk in terms of pooCing of resources that couCd be re?distributed in times of caCamities

such as fire= fCoods= epidemics and famine. !his Eas probabCy a pre?cursor to modern day

insurance. (ncient ndian history has preserved the earCiest traces of insurance in the

form of marine trade Coans and carriers@ contracts. nsurance in ndia has evoCved over

time heaviCy draEing from other countries= *ngCand in particuCar.

11 saE the a(ent of l)fe )ns'&ance b's)ness )n In()a Eith the estabCishment of the

"rientaC Life nsurance )ompany in )aCcutta. !his )ompany hoEever faiCed in 134. n

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Eere aCso aCCegations of unfair trade practices. !he overnment of ndia= therefore=

decided to nationaCie insurance business.

(n "rdinance Eas issued on 1


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!his miCCennium has seen insurance come a fuCC circCe in a journey eGtending to nearCy

2DD years. !he process of &eo/en)n% of t*e secto& had begun in the earCy 1


13/72

!he )ns'&ance secto& )s a colossal one and is groEing at a speedy rate of 10?2DJ.

!ogether Eith banking services= insurance services add about 8J to the country@s +-. (

EeCC?deveCoped and evoCved insurance sector is a boon for economic deveCopment as it

provides Cong? term funds for infrastructure deveCopment at the same time strengthening

the risk taking abiCity of the country.

2.12. MILETONE IN INDIAN LIFE INURANCE #UINE

• 1


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• 1


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many sociaC sector programmes.!his has Ced to severe resource constraints in the heaCth

sector in respect of non?saCary eGpenditure and this has affected the capacity and

credibiCity of the government heaCth care system to deCiver good FuaCity care over the

years. iven the increasing saCaries= Cack of effective monitoring and Cack of incentives to

provide good FuaCity services the provides in the government sector became indifferent to

the cCients. )Cients aCso did not demand good FuaCity and better access= as government

services Eere free of cost.

'nder this situation more and more cCients turned to the private sector heaCth providers

and thus the private sector heaCthcare has eGpanded. iven the sociaCistic poCiticaC

thinking and popuCist poCicy it has been generaCCy difficuCt for any government to

introduce cost recovery in pubCic heaCth sector. iven that government is unabCe to

provide more resources for heaCth care= and institute cost recovery= one of the Eays to

reduce the under?funding and augment the resources in the heaCth sector Eas to encourage

the deveCopment heaCth insurance.

(nother imperative for CiberaCiation of the insurance sector Eas the need for Cong?term

financiaC resources on sustainabCe basis for the deveCopment of infrastructure sector such

as roads= transports etc. t Eas reaCied that during the course of economic CiberaCiation=

the funds to deveCopment the infrastructure aCso became a major constraint. )ountry

certainCy needed infrastructure deveCopment. %or this the finances are major constraint. n

these investments the benefits are more sociaC than private. !he major concern Eas hoE

these finances can be made avaiCabCe at CoE costs. n past the deveCopment of sociaC

sector Eere financed using government channeCed funds through various semi?

government financiaC institutions. 'nder the CiberaCied economy this may not be

possibCe. "ne hope is that if the insurance sector deveCops rapidCy under privatiation

then it can provide Cong?term finance to the infrastructure sector.

!he financiaC sector= Ehich consists of banks= financiaC institutions= insurance companies=

provident funds schemes= mutuaC funds Eere aCC under government controC. !here Eas

Cess competition across these units. (s a resuCt these institutions remained significantCy

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Cess deveCoped in their approach and management. nsurance sector has been most

affected by the government controCs. overnment had significant controC on the poCicies

these insurance companies couCd offer and utiCiation of the resources mobiCied by

insurance companies. "ne can see that most of the insurance products e.g.= Cife insurance

products: Eere promoted as mechanisms to improve the savings and taG sheCters rather as

risk coverage instruments. "ther segments of the insurance products greE because of the

statutory obCigations e.g.= ,otor /ehicCe= ,arine and %ire: under various acts. !he

management and organiation of insurance sector companies remained Cess deveCoped

and they negCected neE product deveCopment and marketing. !hus one of the hopes in

opening of the insurance sector Eas that the private and foreign companies EouCd rapidCy

deveCop the sector and improve coverage of the popuCation Eith insurance using neE

products and better management.

Last imperative for opening of the insurance sector Eas signing the !" ndia. (fter this

there Eas CittCe choice but to open the entire financiaC sector ? incCuding insurance sector

to private and foreign investors. +hoCakia 1


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,etLife nsurance )ompany Limited EEE.metCife.com

"m 5otak ,ahindra Life nsurance )o. Ltd. EEE.omkotakmahnidra.com

SB Life nsurance )ompany Limited EEE.sbiCife.co.in

!(!( ( Life nsurance )ompany Limited EEE.tata?aig.com

(,- Sanmar (ssurance )ompany Limited EEE.ampsanmar.com

+abur )' Life nsurance )o. -vt. Limited EEE.avivaindia.com

!ENERAL INURER

P'bl)c ecto&

&ationaC nsurance )ompany Limited EEE.nationaCinsuranceindia.com

&eE ndia (ssurance )ompany Limited EEE.niacC.com

"rientaC nsurance )ompany Limited EEE.orientaCinsurance.nic.in

'nited ndia nsurance )ompany Limited EEE.uiic.co.in

P&)ate ecto&

Bajaj (CCian eneraC nsurance )o. Limited EEE.bajajaCCian.co.in

)) Lombard eneraC nsurance )o. Ltd. EEE.iciciCombard.com

%%)"?!okio eneraC nsurance )o. Ltd. EEE.itgi.co.in

#eCiance eneraC nsurance )o. Limited EEE.riC.com

#oyaC Sundaram (CCiance nsurance )o. Ltd. EEE.royaCsun.com

!(!( ( eneraC nsurance )o. Limited EEE.tata?aig.com

)hoCamandaCam eneraC nsurance )o. Ltd. EEE.choCainsurance.com

*Gport )redit uarantee )orporation EEE.ecgcindia.com

H+%) )hubb eneraC nsurance )o. Ltd.

REINURER

eneraC nsurance )orporation of ndia EEE.gicindia.com

2.17. CONCEPT AND FUNCTION OF INURANCE

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nsured= are youK !he functions of nsurance EiCC give you an idea on hoE to go ahead

Eith the approach of insurance and Ehat type of insurance to choose. n a Caymans

Eords= insurance means= Ma guard against pecuniary Coss arising on the happening of an

unforeseen event@. n deveCoping economies= the insurance sector stiCC hoCds a Cot of

potentiaC Ehich can be tapped. ,ajority of the peopCe in the deveCoping countries remains

unaEare of the functions and benefits of insurance and it is for this reason that the

insurance sector is stiCC to groE.

!angibCe or intangibCe > an individuaC can insure anythingN Be it a house= car= factory= or

the voice of a singer= Ceg of a footbaCCer= and the hand of an author.....etc. t is possibCe to

insure aCC these as they have the possibiCity of becoming non functionaC by any disaster or

an accident.

#AIC FUNCTION OF INURANCE6

1. 1.-rimary %unctions

2. 2.Secondary %unctions

3. 3."ther %unctions

P&)0a&+ f'nct)ons of )ns'&ance

• P&o)()n% /&otect)on > !he eCementary purpose of insurance is to aCCoE security

against future risk= accidents and uncertainty. nsurance cannot arrest the risk

from taking pCace= but can for sure aCCoE for the Cosses arising Eith the risk.

nsurance is in reaCity a protective cover against economic Coss= by apportioning

the risk Eith others.

•

Collect)e &)s$ bea&)n% > nsurance is an instrument to share the financiaC Coss. tis a medium through Ehich feE Cosses are divided among Carger number of

peopCe. (CC the insured add the premiums toEards a fund and out of Ehich the

persons facing a specific risk is paid.

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• Eal'at)n% &)s$ > nsurance fiGes the CikeCy voCume of risk by assessing diverse

factors that give rise to risk. #isk is the basis for ascertaining the premium rate as

EeCC.

• P&o)(e Ce&ta)nt+ > nsurance is a device= Ehich assists in changing uncertainty

to certainty.

econ(a&+ f'nct)ons of )ns'&ance

• P&eent)n% losses > nsurance Earns individuaCs and businessmen to embrace

appropriate device to prevent unfortunate aftermaths of risk by observing safety

instructionsO instaCCation of automatic sparkCer or aCarm systems= etc.

• Coe&)n% la&%e& &)s$s 8)t* s0all ca/)tal > nsurance assuages the businessmen

from security investments. !his is done by paying smaCC amount of premium

against Carger risks and dubiety.

• Hel/s )n t*e (eelo/0ent of la&%e& )n('st&)es > nsurance provides an

opportunity to deveCop to those Carger industries Ehich have more risks in their

setting up.

Ot*e& f'nct)ons of )ns'&ance

• Is a sa)n%s an( )nest0ent tool > nsurance is the best savings and investment

option= restricting unnecessary eGpenses by the insured. (Cso to take the benefit of

income taG eGemptions= peopCe take up insurance as a good investment option.

• Me()'0 of ea&n)n% fo&e)%n e3c*an%e > Being an internationaC business= any

country can earn foreign eGchange by Eay of issue of marine insurance poCicies

and a different other Eays.

• R)s$ F&ee t&a(e > nsurance boosts eGports insurance= making foreign trade risk

free Eith the heCp of different types of poCicies under marine insurance cover.

nsurance provides indemnity= or reimbursement= in the event of an unanticipated Coss or

disaster. !here are different types of insurance poCicies under the sun cover aCmost

anything that one might think of. !here are Coads of companies Eho are providing such

customied insurance poCicies.

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2.19. CHALLEN!E FACIN! INURANCE INDUTRY:

• T*&eat of Ne8 Ent&ants: !he insurance industry has been budding Eith neE

entrants every other day. !herefore the companies shouCd carve out niche areas

such that the threat of neE entrants might not be a hindrance. !here is aCso a

chance that the big pCayers might sFueee the smaCC neE entrants.

• Po8e& of '//l)e&s: !hose Eho are suppCying the capitaC are not that big a threat.

%or instance= if someone as a very taCented insurance underEriter is presentCy

Eorking for a smaCC insurance company= there eGists a chance that any big pCayer

EiCCing to enter the insurance industry might entice that person off.

• Po8e& of #'+e&s: &o individuaC is a big threat to the insurance industry and big

corporate houses have a Cot more negotiating capabiCity Eith the insurance

companies. Big corporate cCients Cike airCines and pharmaceuticaC companies pay

miCCions of doCCars every year in premiums.

• Aa)lab)l)t+ of 'bst)t'tes: !here eGist a Cot of substitutes in the insurance

industry. ,ajorCy= the Carge insurance companies provide simiCar kinds of services

> be it auto= home= commerciaC= heaCth or Cife insurance.

Ho8 to c*oose an )ns'&ance co0/an+

!here are many factors to probe into Ehen an investor chose an insurance company.

• !he consumers as EeCC as the investors shouCd onCy focus on the insurers financiaC

strength and capabiCity to meet ongoing responsibiCities to its poCicyhoCders.

• !he fundamentaCs of the insurance company shouCd be strong and shouCd not

indicate a poor investment opportunity as this might aCso deter groEth.

2.1;. TOP INURANCE COMPANIE IN INDIA:

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L)fe Ins'&ance Co&/o&at)on of In()a ?

!he Life nsurance )orporation of ndia L): is undoubtedCy ndias Cargest Cife

insurance company. %uCCy oEned by government= L) is aCso the Cargest investor of the

country. L) has an estimated asset of #s. !riCCion. t aCso funds aCmost 24.J of the

eGpenses of overnment of ndia.

*stabCished in 1


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,etLife ndia nsurance )ompany Limited is another popuCar pCayer in ndian insurance

sector. ( joint venture betEeen the ;ammu and 5ashmir Bank= ,. -aCConji and )o.

-rivate Limited and other private investors and ,etLife nternationaC HoCdings= nc.=

,etLife nsurance offers a Eide range of financiaC soCutions to its customers incCuding

,et Suraksha= ,et Suraksha !#"-= ,et ,ortgage -rotector and ,et Suraksha -Cus etc.

t has its branches situated over DD Cocations across the country. ,ore than 0D=DDD

%inanciaC (dvisors Eork for ,etLife.

IN! "+s+a L)fe Ins'&ance ?

& /ysya Life nsurance entered into the ndian insurance industry in September 2DD1.

( joint venture betEeen & roup= (mbuja )ements= *Gide ndustries and *nam

roup= & /ysya Life nsurance uses its tEo channeCs= vi. the (Cternate )hanneC and

the !ied (gency %orce to distribute its products. !he first channeC has branches in 234

cities across the country and has got 3 saCes teams. "n the other hand= the Cater one has

more than D=DDD advisors. )urrentCy= & /ysya Life nsurance has tie ups Eith more

than 2DD cooperative banks.

#)&la 'n L)fe F)nanc)al e&)ces ?

BirCa Sun Life %inanciaC Services is a joint venture betEeen (ditya BirCa roup and Sun

Life %inanciaC nc= )anada. t has got an eGtensive netEork of more than DD branches.

,ore than 1=80=DDD empaneCCed advisors Eork for BirCa Sun Life= Ehich currentCy covers

over 2 miCCion Cives.

MA< Ne8 Yo&$ L)fe ?

,aG &eE $ork Life nsurance )ompany Ltd. is one of the top insurance companies in

ndia. ( joint venture betEeen ,aG ndia Limited and &eE $ork Life nternationaC a part

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of the %ortune 1DD company ? &eE $ork Life:= ,aG &eE $ork Life nsurance )ompany

Ltd. started its operation in (priC 2DD1. t currentCy has around 810 offices Cocated in 3<

cities across the country. t aCso has around 80=32 agent advisors. ,aG &eE $ork Life

offers 3< products= Ehich cover both= Cife and heaCth insurance.

#a-a- All)an4 ?

Bajaj (CCian is a joint venture betEeen Bajaj %inserv Limited and (CCian S*= Ehere

Bajaj %inserv Limited hoCds 84J of the stake= Ehereas (CCian S* hoCds the rest 2J

stake. Bajaj (CCian has been rated i((( by )#( for its abiCity to pay cCaims. !he

company aCso achieved a groEth of 11J Eith a premium income of #s. 2 crore as on

,arch 31= 2DD


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2.2. HEALTH

INURANCE

IN INDIA

2.21.HEALTH INURANCE IN INDIA: CURRENT CENARIO

Int&o('ct)on

!he heaCth care system in ndia is characterised by muCtipCe systems of medicine= miGed

oEnership patterns and different kinds of deCivery structures. -ubCic sector oEnership is

divided betEeen centraC and state governments= municipaC and Panchayat CocaC

governments. -ubCic heaCth faciCities incCude teaching hospitaCs= secondary CeveC

hospitaCs= first?CeveC referraC hospitaCs )H)s or ruraC hospitaCs:= dispensariesO primary

heaCth centres -H)s:= sub?centres= and heaCth posts. (Cso incCuded are pubCic faciCities

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for seCected occupationaC groups Cike organied Eork force *S:= defence= government

empCoyees )HS:= raiCEays= post and teCegraph and mines among others. !he private

sector for profit and not for profit: is the dominant sector Eith 0D per cent of peopCe

seeking indoor care and around D to 8D per cent of those seeking ambuCatory care or

outpatient care: from private heaCth faciCities. hiCe ndia has made significant gains in

terms of heaCth indicators ? demographic= infrastructuraC and epidemioCogicaC See !abCes

1 and 2:= it continues to grappCe Eith neEer chaCCenges. &ot onCy have communicabCe

diseases persisted over time but some of them Cike maCaria have aCso deveCoped

insecticide?resistant vectors EhiCe others Cike tubercuCosis are becoming increasingCy drug

resistant. H/ A (+S has of Cate assumed eGtremeCy viruCent proportions. !he 1


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Table 1. Socioconomic indicators

Lan( a&ea 2J of EorCd area

#'&(en of ()sease =>? 21J of gCobaC disease burden

Po/'lat)on 1J of EorCd popuCation

U&ban : R'&al 2682

L)te&ac+ &ate =>? 0.3

an)tat)on =>? #uraC > ?

#uraC > 23.2

Poe&t+ l)ne =Rs.? #uraC > 328.0O 'rban > 404.11

Healt* secto& an( )ts f)nanc)n%: /&esent scene an( )ss'es fo& t*e f't'&e

+uring the Cast 0D years ndia has deveCoped a Carge government heaCth infrastructure

Eith more than 10D medicaC coCCeges= 40D district hospitaCs= 3DDD )ommunity HeaCth

)enters= 2D=DDD -rimary HeaCth )are centers and 13D=DDD Sub?HeaCth )enters. "n top of

this there are Carge number of private and &" heaCth faciCities and practitioners scatters

though out the country.

"ver the past 0D ears ndia has made considerabCe progress in improving its heaCth status.

+eath rate has reduced from 4D to < per thousand= infant mortaCity rate reduced from 11

to 81 per thousand Cive births and Cife eGpectancy increased from 31 to 3 years.

HoEever= many chaCCenges remain and these are6 Cife eGpectancy 4 years beCoE EorCd

average= high incidence of communicabCe diseases= increasing incidence of non?

communicabCe diseases= negCect of Eomens heaCth= considerabCe regionaC variation and

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threat from environment degradation. t is estimated that at any given point of time 4D to

0D miCCion peopCe are on medication for major sickness in ndia. (bout 2DD miCCion

Eorkdays are Cost annuaCCy due to sickness. Survey data indicate that about DJ peopCe

use private heaCth providers for outpatient treatment EhiCe D J use government

providers for in?door treatment. !he average eGpenditure for care is 2?0 times more in

private sector than in pubCic sector.

ndia spends about J of +- on heaCth eGpenditure. -rivate heaCth care eGpenditure is

80J or 4.20J of +- and most of the rest 1.80J: is government funding. (t present=

the insurance coverage is negCigibCe. ,ost of the pubCic funding is for preventive=

promotive and primary care programmes EhiCe private eGpenditure is CargeCy for curative

care. "ver the period the private heaCth care eGpenditure has groEn at the rate of 12.4J

per annum and for each one percent increase in per capitaC income the private heaCth care

eGpenditure has increased by 1.48J. &umber of private doctors and private cCinicaC

faciCities are aCso eGpanding eGponentiaCCy. ndian heaCth financing scene raises number of

chaCCenges= Ehich are6 increasing heaCth care costs= high financiaC burden on poor eroding

their incomes= increasing burden of neE diseases and heaCth risks and negCect of

preventive and primary care and pubCic heaCth functions due to under funding of the

government heaCth care.

iven the above scenario eGpCoring heaCth?financing options becomes criticaC. HeaCth

nsurance is considered one of the financing mechanisms to over come some of the

probCems of our system.

2.22. Cons'0e& an( soc)al /e&s/ect)e on *ealt* )ns'&ance

ith the CiberaCiation of insurance and entry of private companies in this business it is

very important that specific interventions are deveCoped Ehich focus on increasing the

consumer aEareness about insurance products. "ne of the major chaCCenges after

privatiation of insurance EouCd be hoE to deveCop such mechanisms= Ehich heCp

making consumers aEare about the various intricacies of insurance pCans. (s of noE

*L& * L & 5 ( # & S ! ! ' ! * -age 2


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information= knoECedge and aEareness of eGisting insurance pCans is very Cimited. !his is

aCso shoEn by the study of umber and 5uCkarni 2DDD: among the members of S*(=

*SS and medicCaim schemes. ith )onsumer -rotection (ct coming in force it has

become easy for aggrieved consumers to compCain and seek redressaC for their probCems.

)onsumer organiations such as )*#) of (hmedabad have been heCping consumers to

get due justice in disputes Eith the insurance companies. !heir eGperience EouCd be

varying vaCuabCe in guiding deveCopment of heaCth insurance pCans that are transparent

and just.

,any a times the insurance cCaims are rejected due to some smaCC technicaC reasons. !his

Ceads to disputes. ,ost of the time the conditions and various points incCuded in

insurance poCicy contracts is not negotiabCe and these are binding on consumers. !here is

no anaCysis on Ehat is fair practice and Ehat is unfair practice. iven that insurance

companies are Carge and aCmost monopoCy setting the consumers is treated as secondary

and they do not have opportunity to negotiate the terms and conditions of a contract.

,any times insurance companies do not strictCy foCCoE the conditions in aCC cases and this

create confusion and disputes. Shah , 1


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constitutes pre? eGiting conditions. )ourts= hoEever= have ruCed that even if there is deCay

in reneEing the poCicies it shouCd be considered as reneEed poCicy. n case tEo doctors

give different reports one favouring consumer and other insurance company= the

insurance company generaCCy foCCoEs the Cater opinion. !here are severaC such consumer?

reCated issues= Ehich need to be addressed in heaCth insurance.

"ne of the pCanks on Ehich the insurance has been dereguCated is the gain in efficiency

and passing on these benefits to the consumers. t is very unreaCistic to assume that

insurance companies EiCC be abCe to gain efficiency= Ehich heCps them to reduce the price

of schemes. (t Ceast one shouCd not be eGpecting this thing happening in the short?run.

But providing fuCC information to the consumer and deaCing Eith cCaims in a just and

eGpeditious manner is the minimum eGpected outcome of the dereguCation process.

)onsumer organiations have to pCay very active roCe in future deveCopment of the heaCth

insurance sector in ndia.

!here are severaC sociaC issues such as eGcCusions of seGuaCCy transmitted diseases= (+S=

deCivery and maternaC conditions etc. !hese are not sociaCCy and ethicaCCy acceptabCe.

Qnsurance companies much take care of aCC the risks reCated to heaCth. !he companies

may charge additionaC premium for certain conditions. SecondCy the present medicCaim

poCicy premiums are high and do not differentiate betEeen peopCe Civing in urban and

ruraC areas Ehere the costs of medicaC care are different. !hus the present poCicy is Cess

attractive to poor and ruraC peopCe. !he taG subsidy provided to the medicCaim is aCso

going CargeCy to the rich Eho are the taGpayers.

!he neEer heaCth insurance poCicies have to improve upon the shortcoming of the

eGisting poCicies.

2.2,. I0/act of Healt* )ns'&ance on st&'ct'&e an( @'al)t+ of /&)ate

/&o)s)on

!he eGperiences in CiberaCiing the private heaCth insurance suggest that it has undesirabCe

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effects on the costs of heaCth care. !he costs of care generaCCy go up. iven the present

system of fee for service and current scenario of heaCth infrastructure in private sector= the

deveCopment of insurance EiCC need improvements in FuaCity and change in structure. !he

neE investments to improve FuaCity EiCC resuCt into high cost and therefore increase in

prices of insurance products. !here EouCd be deveCopments in the direction of eGpCoring

options of managed care= Ehich EouCd heCp in reducing the costs. !he deveCopments

EouCd be needed in the direction of strong information base and accreditation system for

providers. !he structure of the heaCth sector EiCC have to change from muCtipCe?singCe

doctor hospitaCs and cCinics to Carger hospitaCs and poCycCinics= Ehich provide services of

muCtipCe speciaCities and can operate at Carger scaCe. !his

EiCC aCCoE them to provide high FuaCity professionaC care at competitive prices. (s one of

the responses to these issues !hird -arty (dministrators !-(: are rapidCy emerging in

ndia. Here Ee can Cearn from the modeCs= Ehich have emerged eCseEhere. But their

appCicabiCity to ndian situation needs to be eGamined carefuCCy. !hese aspects of the

heaCth sector EiCC need detaiCed study.

e Cack adeFuate information base to operate insurance schemes at Carge scaCe. !he

insurance mechanism prevaCent in many deveCoped countries has their history. HeaCth

reforms eGperiences in many countries are repCete Eith the suggestion that the systems

cannot be repCicated easiCy.

SeCf?reguCation is an important in any market driven system. !he reguCation from outside

does not Eork. mpCementation of reguCation in this sector is difficuCt. e significantCy

Cack mechanisms and institutions= Ehich EouCd ensure seCf? reguCation and continuing

education of provides and various stakehoCders. !he accreditation systems are hard to

impCement Eithout mechanisms to seCf?reguCate. %or eGampCe it took 30 years in 'S to

put the accreditation system effectiveCy in pCace. %or eGampCe= it has been difficuCt for

many States in ndia to put nursing homes CegisCation in pCace. iven the deterioration on

standards in medicaC education= Cack of reguCation by medicaC counciC and rising

eGpectations of the community it is difficuCty to ensure FuaCity standards in ndian heaCth

care system. iven this situation heaCth insurance systems EiCC have to deaC Eith this

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compCeG issue of FuaCity of care in years to come.

2.2. Role of &e%'lato&s

!he government has estabCished nsurance #eguCatory and +eveCopment (uthority

#+(: Ehich is the statutory body for reguCation of the EhoCe insurance industry. !hey

EouCd be granting Cicenses to private companies and EiCC reguCate the insurance business.

(s the heaCth insurance is in its very earCy phase= the roCe of #+( EiCC be very cruciaC.

!hey have to ensure that the sector deveCops rapidCy and the benefit of the insurance goes

to the consumers. But it has to guard against the iCC effects of private insurance. !he main

danger in the heaCth insurance business Ee see is that the private companies EiCC cover

the risk of middCe cCass Eho can afford to pay high premiums. 'nreguCated

reimbursement of medicaC costs by the insurance companies EiCC push up the prices of

private care. So Carge section of ndias popuCation Eho are not insured EiCC be at a

reCative disadvantage as they EiCC= in future= have to pay much more for the private

care. !hus checking increase in the costs of medicaC care EiCC be very important roCe of

the #+(.

SecondCy= #+( EiCC need to evoCve mechanisms by Ehich it puts some kind of statue in pCace that private insurance companies do not skim the market by focusing on rich and

upper? cCass cCients and in the process negCect a major section of ndias popuCation. !hey

must ensure that companies deveCop products for such poorer segments of the community

and possibCy buiCd an eCement of cross?subsidy for them. overnment companies can take

the Cead in this matter and cataCye neE products for the poor and CoEer middCe cCass as

they have done in the past.

!hirdCy the reguCators shouCd aCso encourage &"s= )o?operatives and other coCCectives

to inter into the heaCth insurance business and deveCop products for the poor as EeCC as for

the middCe cCass empCoyed in the services sector such as education= transportation=

retaiCing etc and the seCf empCoyed. !his couCd be run as no?profit?no Coss basis simiCar to

the scheme pioneered by ndian ,edicaC (ssociation for its members. SpeciaC Cicenses

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EiCC have to be given to &" for this purpose Eithout insisting on the minimum capitaC

norms= Ehich are for commerciaC insurance companies.

2.25. "ARIOU HEALTH INURANCE PRODUCT A"AILA#LE IN INDIA

!he eGisting heaCth insurance schemes avaiCabCe in ndia can be broadCy categoried as6

/oCuntary heaCth insurance schemes or private?for?profit schemes ,andatory heaCth

insurance schemes or government run schemes nameCy *SS= )HS: nsurance offered

by &"sA)ommunity based heaCth insurance *mpCoyer based schemes

1. "ol'nta&+ *ealt* )ns'&ance sc*e0es o& /&)atefo&/&of)t sc*e0es:

n private insurance= buyers are EiCCing to pay premium to an insurance company that

pooCs simiCar risks and insures them for heaCth reCated eGpenses. !he main distinction is

that the premiums are set at a CeveC= Ehich are based on assessment of risk status of the

consumer or of the group of empCoyees: and the CeveC of benefits provided= rather than as

a proportion of consumer@s income.

n the pubCic sector= the eneraC nsurance )orporation ): and its four subsidiary

companies &ationaC nsurance )orporation= &eE ndia (ssurance )ompany= "rientaC

nsurance )ompany and 'nited nsurance )ompany: provide voCuntary insurance

schemes.

!he most popuCar heaCth insurance cover offered by ) is ,edicCaim poCicy

Me()cla)0 /ol)c+: ? t Eas introduced in 1


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segment of popuCation.

Some of the various other voCuntary heaCth insurance schemes avaiCabCe in the market

are 6? (sha deep pCan = ;eevan (sha pCan = ;an (rogya poCicy= #aja #ajesEari poCicy=

"verseas ,edicCaim poCicy= )ancer nsurance poCicy= Bhavishya (rogya poCicy= +readed

disease poCicy= HeaCth uard= )riticaC iCCness poCicy= roup HeaCth insurance poCicy=

Shakti ShieCd etc. (t present HeaCth insurance is provided mainCy in the form of riders.

!here are very feE pure heaCth insurance poCicies under voCuntary heaCth insurance

schemes.

2. Man(ato&+ *ealt* )ns'&ance sc*e0es o& %oe&n0ent &'n sc*e0es =na0el+ EI

C!H?

E0/lo+e& tate Ins'&ance c*e0e =EI?: *nacted in 1


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#ising costs and technoCogicaC advancement in super speciaCty treatment.

,anagement information is not satisfactory.

!he patients are not satisfied Eith the services they get LoE utiCiation of the

hospitaCs.

n ruraC areas= the access to services is aCso a probCem.(CC these probCems indicate an

urgent need for reforms in the *SS Scheme.

Cent&al !oe&n0ent Healt* Ins'&ance c*e0e =C!H?: *stabCished in 1


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these= the scheme Eas not successfuC.

!he reasons for faiCing to attract ruraC poor are many 6?

!he pubCic sector companies Eho Ehere reFuired to impCement this scheme find it to be

potentiaCCy Coss making and do not invest in propagating it. !o meet the target= it is

Cearnt that severaC fieCd officers pay the premium under fictious names. dentification of

eCigibCe famiCies is a difficuCt task -oor find it difficuCt to pay the entire premium at one

time for future benefit= foregoing current consumption needs. -aper Eork reFuired to

settCe the cCaims is cumbersome +eficit in avaiCabiCity of service providers Set back due

to heaCth insurance companies refusing to reneE the previous year@s poCicies.

n 2DD4= the government aCso provided an insurance product to the elf Hel/ !&o'/

=H!? for a premium of #s.12D and sum assured of #s.1DDDDA?. HoEever= the intake is

negCigibCe. !he reasons for poor intake are simiCar to those cited above.

,. Ins'&ance offe&e( b+ N!OsBCo00'n)t+ base( *ealt* )ns'&ance

)ommunity based schemes are typicaCCy targeted at poorer popuCation Civing in

communities. Such schemes are generaCCy run by charitabCe trusts or non?governmentaC

organiations &"s:. n these schemes the members prepay a set amount each year for

specified services. !he premia are usuaCCy fCat rate not income reCated: and therefore not

progressive. !he benefits offered are mainCy in terms of preventive care= though

ambuCatory and inpatient care is aCso covered. Such schemes tend to be financed through

patient coCCection= government grants and donations. ncreasingCy in ndia= )BH

schemes are negotiating Eith for profit insurers for the purchase of custom designed

group insurance poCicies.

)BH schemes suffer from poor design and management. "ften there is a probCem of

adverse seCection as premiums are not based on assessment of individuaC risk status.

!hese schemes faiC to incCude the poorest of the poor. !hey have CoE membership and

reFuire eGtensive financiaC support. "ther issues reCate to sustainabiCity and repCication of

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such schemes.

Some of the popuCar )ommunity Based HeaCth nsurance schemes are6 ? SeCf?*mpCoyed

omen@s (ssociation S*(:= !ribuvandas %oundation !%:= !he ,uCCur ,iCk )o?

operative= SeEagram= (ction for )ommunity "rganiation= #ehabiCitation and

+eveCopment ())"#+:= /oCuntary HeaCth Services /HS: etc.

. E0/lo+e& base( sc*e0es

*mpCoyers in both pubCic and private sector offers empCoyer based insurance schemes

through their oEn empCoyer. !hese faciCities are by Eay of Cump sum payments=

reimbursement of empCoyees@ heaCth eGpenditure for out patient care and hospitaCiation=

fiGed medicaC aCCoEance or covering them under the group heaCth insurance schemes.

!he #aiCEays= +efense and Security forces= -Cantation sector and ,ining sector run their

oEn heaCth services for empCoyees and their famiCies.

2.27.!ENERAL INURANCE ". LIFE INURANCE

SeveraC Cife insurance companies have of Cate pCunged into the heaCth segment= Ehich tiCC

recentCy Eas dominated by generaC insurance companies. (mong others= )) -rudentiaC

has Caunched HospitaC )are and )risis )over and Bajaj (CCian= the )are %irst pCan. Life

nsurance )orporation= too= pCans to roCC out products soon. But= are these products any

different from those offered by the generaC insurance companies= popuCar as medicCaim

poCiciesK

A(anta%es of Healt* )ns'&ance offe&e( b+ L)fe )ns'&e&: Because of the Cong term

nature of the pCans= the poCicy hoCder can pCan in advance his future medicaCAcare

eGpenses. But it is not so under eneraC insurance. Since= the generaC insurance poCicies

are subject to reneEaC every year= if the poCicy hoCder has been making severaC cCaims and

*L& * L & 5 ( # & S ! ! ' ! * -age 2


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is considered a risk= the generaC insurance company may deny reneEaC or reneE it for a

much higher premium.

A(anta%es of Healt* )ns'&ance offe&e( b+ !ene&al )ns'&e&: !hough a Cump sum

amount is paid by Cife insurers and is of Cong term nature= this comes Eith a cost. !hey

charge bigger premiums compare Eith the eneraC insurers. n addition= most generaC

insurance companies offer medicaC charges up to 3D days before a person is hospitaCied

and pay the cCaims if a person has been undergoing treatment at home ? aCso caCCed

domiciCiary hospitaCiation. !he Cife insurers seem to Cack this faciCity at this point in

time.

2.28. HEALTH INURANCE FOR ENIOR CITIEN

(geing heaCth poCicy Fuestions are noE freFuentCy raised in ndia. ndia has not yet found

a cCear=fair and adeFuate system for financing the groEing demand for Cong?term care as

the popuCation ages. !he migration of popuCation for jobs and CiveCihood from ruraC areas

to urban areas and betEeen cities has Ced to the breaking doEn of the age oCd traditionaC

jointT or eGtendedT famiCy system in ndia. !his system provides a good supporting

structure for the care of oCder persons by keeping famiCies together= pooCing financiaC

resources and making famiCy members avaiCabCe in case of need. !his Eeakening in thetraditionaC support systems for oCder peopCe is eGpected to Cead to a rapid increase in the

demand for formaC care provided by institutions such as nursing and residentiaC homes

and aCso services provided in the community.

(t present= there are no sociaC schemes or federaC or centraC government mechanisms for

funding of heaCth care for the aging popuCation. !he reCiance is currentCy on private

sector= voCuntary organiations and indigenous programs that deCiver DJ of heaCth care

the remainder is in the form of overnment hospitaCs and ,unicipaC corporations:. !he

medicaC infrastructure to handCe substantiaC number of oCder aduCts is Cacking. !here is no

provision for organied Cong term care for chronicaCCy sick= eGcept for the upper middCe

cCass and the rich Eho can afford to provide good care at home Eith some professionaC

heCp. Hence= there is a need for innovative= cost effective heaCth insurance products for

*L& * L & 5 ( # & S ! ! ' ! * -age 2


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senior citiens Ehich cater effectiveCy to their needs.

LON! TERM CARE

!his paper focuses primariCy on Cong?term care as the subject of Cong?term care L!): is

receiving increasing attention both in the research community and by overnment

because of the beCief that an ageing popuCation EiCC greatCy sEeCC the demand for Cong

term care services and create huge pubCic eGpense. "ne of the issues Ehich need to be

determined is by hoE much demand EiCC increaseO another is to address the ambiguity

over Ehether Cong?term care is a response to a medicaC condition= a sociaC need or both.

!he coroCCary is to decide hoE the burden is to be shared betEeen the individuaC= the

famiCy and the state.

Before going on to discussing Ehat different nations are doing= it is essentiaC Ee first

appreciate the nature and significance of Cong?term heaCth care.

Long?term care is administered to peopCe Eho have reached a stage in Cife in Ehich they

are dependent on others for sociaC= personaC and medicaC needs. t is usuaCCy associated

Eith the very oCd= but= in fact= couCd begin at any age depending on the reasons for their

disabiCity > perhaps a road accident= a mentaC or a congenitaC condition. (n important

sociaC objective for Cong?term care is to ensure that peopCe are given the opportunity to

choose Ehere their care is deCivered. iven that oCder peopCe prefer to remain at home the

avaiCabiCity and affordabiCity of heCp to support this is cruciaC.

/arious countries have different insurance systems to cover L!). ndia is acFuainted Eith

short? term heaCth schemes provided by non?Cife insurers and the government. !he need

of the hour in ndia= keeping in vieE the increasing tendency to opt for nucCear famiCy

system and increased Congevity= is a comprehensive Cong term heaCth care faciCity for aCC.

f Ee Cook at most deveCoped economies a microcosm of Ehich is discussed here beCoE:=

Ee see that most of these nations have a Eorking and EorkabCe L!) system for the

benefit of its citiens= primariCy the senior citiens.

*L& * L & 5 ( # & S ! ! ' ! * -age 2


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*Gperiences from other countries need to be studied= so that Ee can deveCop a modeC

based on good innovations from various countries EhiCe keeping the reaCities of ndian

heaCth system.

2.2;. MODEL OF LON! TERM CARE IN OTHER COUNTRIE

1? !ERMANY

,andatory Cong?term care L!): insurance Eas introduced throughout ermany at the

beginning of 1


40/72

take up private insurance= and get part of the contribution paid by their empCoyer.

%or peopCe dependent on income support= the CocaC authority concerned may choose

betEeen paying the contributions on behaCf of the individuaCs concerned and taking the

risk of having to pay for their care.

Because it is a -($ system= the L!) insurance has not been abCe to buiCd up more than

a smaCC financiaC baCance. (ccording to the CaE= the baCance must be sufficient to continue

to make payments for 1.0 monthsO at the moment it is sufficient to cover three.

#enef)ts

t takes five years to FuaCify for benefits. (part from that= the onCy FuaCifying reFuirement

is the need for care= so benefits are paid independent of age. !hree kinds of benefits are

offered6 professionaC domiciCiary care= institutionaC care= and benefits in cash. +ifferent

kinds of benefits may aCso be combined. Benefits are not dependent on the income of the

individuaC. -eopCe appCying for benefits are eGamined by a doctor and then divided into

three groups. !he criticaC factors are the person@s abiCity to perform activities of daiCy

Civing (+L:= together Eith the time that these activities are estimated to consume.

,entaC impairments are not taken into account.

2? APAN

Since ;apan became industriaCied Fuite Cate= it aCso deveCoped sociaC security systems

sCightCy Cater than most other deveCoped countries. %amiCy patterns changed as traditionaC

caring arrangements based on three?generation househoCds and obCigations on chiCdren to

Cook after eCderCy parents shoEed signs of breaking doEn. n 1


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!he L!) insurance is financed by 0D J from taGes and by 0D J from insurance

premiums. !he taG revenues are coCCected by 0D J from nationaC taGes= and CocaC and

regionaC taGes contribute Eith 20 J each. -remiums are coCCected from peopCe aged 4D

years and over. %amiCy members are automaticaCCy covered.

%or the eCderCy= premiums are deducted from pensions. !hese premiums are aCso income?

#eCated !he L!) insurance is administered by municipaCities.

#enef)ts

*CigibiCity for benefits from the L!) insurance is soCeCy based on need. !hus= the

financiaC position and famiCy structure of the insured are not taken into account. !he L!)

insurance covers institutionaC as EeCC as home?based care= and cCients in aCC categories

eGcept the Ceast needy may choose betEeen them.

!here are three kinds of institutions6 former sociaC service nursing homes= formerCy

heaCth? insurance financed homes for eCderCy and medicaC nursing care faciCities. Home

care services incCuded are nursing care= rehabiCitation= medicaC advice and various

community services.

'nCike the erman system there are no cash benefits provided in the scheme.

hen the private L!) insurance Eas introduced= severaC Carge for?profit corporations

made huge investments in home services in the anticipation of increased demand due to

the increased freedom to choose providers. HoEever= recipients have proved to be more

conservative than eGpected= and stayed Eith their former providers. !his has incurred

some Cosses on private corporations offering home care.

,? UNITED TATE

!he 'nited States had a Fuite ambitious sociaC EeCfare programme for eCderCy aCready

around the turn of the tEentieth century. (t this time= more than one Fuarter of federaC

eGpenditure Eas dedicated to pensions for )iviC ar veterans and their famiCies.

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Long?term care makes up a smaCC but increasing part of pubCic spending in the 'nited

States.

F)nanc)n%

n the 'nited States= funds for heaCth and Cong?term care for eCderCy is provided from

pubCic as EeCC as private sources. -ubCic funding is based on Me()ca)( an( Me()ca&e

programmes= EhiCst the private eCement consists of private insurance as EeCC as out of?

pocket payments

Me()ca)( is a taG?based programme designed for CoE?income earners. t covers hospitaC

care as EeCC as home care. *ven if the ,edicaid programme Eas not originaCCy designed

to concentrate on heCp for the eCderCy= it has evoCved into an important piCCar for Cong?term

care financing

Me()ca&e is a nationaC sociaC insurance programme. )ontributions are paid either as

M,edicare taG@ EhiCe Eorking= or by continuing to pay premiums after retirement.

,edicare compensates nursing home costs if the insured has been treated in a hospitaC for

at Ceast three days. ,edicare onCy reimburses costs for doctors@ and nurses@ services.

Home care is onCy provided if the cCient needs skiCCed nursing care and is homebound.

HoEever= for cCients meeting the reFuirements= personaC care services may be provided as

EeCC. ,edicare home services are provided for free

n recent years= a private market for Cong?term care insurance has emerged in the 'nited

States. -rivate insurance companies > there are more than 1DD of them > offer

compCementary insurance for costs reCated to Cong?term care. !he insurance products are

designed for cases Ehere benefits from ,edicare have been eGhausted= and Ehere the

insured is not entitCed to ,edicaid benefits. nsurance is voCuntary= and has normaCCy been

taken out individuaCCy.

Before signing up= the poCicyhoCder goes through a medicaC eGamination. !he insurance

*L& * L & 5 ( # & S ! ! ' ! * -age 2


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company aCso reFuests information regarding the customer@s consumption of medicaC

services= his or her CifestyCe and physicaC or mentaC disabiCities= if any. )ontributions are

based on these data= and sometimes they become prohibitiveCy high. *stimates shoE that

as much as 2D J of the eCderCy popuCation EouCd be refused Cong term care insurance.

#enef)ts

Benefits offered by private Cong?term insurance poCicies vary. Some onCy incCude nursing

home care= Ehereas others onCy cover home care. !ypicaCCy= onCy care given by nurses or

doctors is covered. &ormaCCy= poCicies offer a fiGed per diem compensation if care is

needed. Benefits are paid for a Cimited timeO e.g. five years or remaining Cife years

!he financing of L!) is a very topicaC issue in the 'nited States. eaknesses in the

eGisting system have received particuCar attention= and there is Eidespread concern that

L!) may become more probCematic under the burden of ageing.

? Un)te( )n%(o0

!he main principCe of the British L!) system as it evoCved during the post?Ear era Eas

that CocaC authorities provided care in residentiaC homes= Ehereas the &HS took care of

particuCarCy fraiC peopCe.

F)nanc)n%

n the '5 there are tEo main sources of L!) funding apart from consumers

themseCves:= nameCy CocaC authorities and the &HS. LocaC authorities are responsibCe for

the buCk of pubCic spending on L!)= and their share has increased in the Cast feE years.

LocaC authorities have tEo main sources of funding ? government grants and counciC

taGes. overnment grants are decided annuaCCy by the centraC government and then

*L& * L & 5 ( # & S ! ! ' ! * -age 2


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distributed to the individuaC authorities according to a resource aCCocation formuCa.

Since 1


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severaC grounds. %or eGampCe= it has been accused of offering poor co?ordination betEeen

different financing bodies and thus providing incentives for cost shifting.

%urthermore= there has been broad agreement that the system is unfair since it penaCies

savers and faiCs to offer comprehensive coverage despite the fact that pubCic financing is

universaC through the taG system.

%rom f)%'&e 1 it can be seen that the eGpenditure on heaCth as a J of +- is onCy 0J in

ndia Ehich is much CoEer than that of deveCoped countries but is comparabCe Eith

)hina.

)onsidering that ndia is one of the rapidCy groEing economies= the share of HeaCth in

+- is Fuite CoE. !his may be attributed to Cack of aEareness in generaC popuCation of

heaCth schemes and not understanding the significance of heaCth protection.

ndustry sources estimate that heaCth care spending in ndia EiCC increase by around 12J

annuaCCy over today@s vaCue of 'SP23 biCCion roughCy 0.2J of +-:.

*L& * L & 5 ( # & S ! ! ' ! * -age 2


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%rom figures 2 R 3 it can be seen that generaC government eGpenditure on heaCth as J of

totaC eGpenditure on heaCth and as a J of totaC government eGpenditure is much CoEer

than even )hina.

!his shoEs that in ndia= -rivate heaCth *Gpenditure dominates overnment eGpenditure.

!he government funds aCCocated to heaCth care sector have aCEays been CoE in reCation to

the popuCation of the country.

e see that overnment of ndia has earmarked a meager 3J of totaC eGpenses on HeaCth

!his may be understandabCe considering that Ee have very Cess sociaC?security schemes in

pCace. !his is another sad observation considering that ndia@s is second most popuCated

country in the EorCd Eith the maGimum of peopCe beCoE the poverty Cine. ,ore focus on

infrastructure deveCopment during the recent times may be the reason. (CternativeCy=

indirect support coming from private schemes can be a reason too. ( more active

penetration into the ruraC areas can improve the percentage over time

*L& * L & 5 ( # & S ! ! ' ! * -age 2


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SociaC security eGpenditure is aCso much CoEer compared to other countries eGcept '5

!his )hart can be interpreted in conjunction Eith %igure 2 above.!his may be due the

bottCenecks Ee discussed above on overnment Schemes.

!his can be justified keeping in vieE the nascent stage of insurance industry in ndia

Ehich is steadiCy yet confidentCy picking up. HoEever= ruraC aEareness and utiCiation of

these schemes are stiCC disappointing.

*L& * L & 5 ( # & S ! ! ' ! * -age 2


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"ver DJ of heaCth financing is private financing= much of Ehich is out of pocket

payments and not by any pre?payment schemes. ith insurance industry opening up and

non?Cife sector being detariffed= Ee can hope to see an infCuG of many competitive

products in the near future.

iven the heaCth financing and demand scenario= heaCth insurance has a Eider scope in

present day situation in ndia. HoEever= it reFuires carefuC and significant efforts to tap

ndian heaCth insurance market Eith proper understanding and training

2.2.IMPLICATION OF PRI"ATIATION ON HEALTH INURANCE

!he privatiation of insurance sector and constitution of IRDA envisage improving the

performance of state insurance sector in the country by increasing benefits from

competition in terms of CoEered costs and increased CeveC of consumer satisfaction.

HoEever= the impCications of the entry of private insurance companies in heaCth sector are

not very cCear. !here are severaC contentious issues pertaining to deveCopment in this

sector and these need criticaC eGamination. #oCe of private insurance varies depending on

the economic= sociaC and institutionaC settings in a country or a region.

)ritics of private insurance argue that privatiation EiCC divert scarce resources aEay

form the pooC= escaCate heaCth costs= aCCoE cream skimming and adverse seCection.

(ccording to this vieE= private heaCth insurance CargeCy negCects the sociaC aspect of

heaCth protection. n the contrast= supporters of private heaCth insurance cCaim that private

insurance can bridge financing gaps by offering consumers vaCue for money and heCp

them avoid Eaiting Cines= CoE FuaCity care and under the tabCe payments?probCems often

observed Ehen househoCds can use pubCic heaCth faciCities for free or participate in

mandatory sociaC insurance schemes. Both the arguments are correct in the sense= private

heaCth insurance can be vaCuabCe tooC to compCiment or suppCement eGisting heaCth

financing options onCy if they are carefuCCy managed and adapted to CocaC needs and

preferences.

*L& * L & 5 ( # & S ! ! ' ! * -age 2


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ndia= Eith reCativeCy deveCoped economy and a strong middCe cCass popuCation= offers

most promising environment for private heaCth insurance deveCopment. )urrentCy= private

heaCth insurance pCays onCy a marginaC roCe in heaCth care systems but it is graduaCCy

gaining importance.

-rivate heaCth insurance is certainCy not the onCy aCternative or the uCtimate soCution to

address aCarming heaCth care chaCCenges in ndia. HoEever= it is an option that Earrants?

and aCready receives?groEing consideration by poCicy makers in the country. !hus the

Fuestion is not if this tooC EiCC be used in the future but Ehether it EiCC be appCied to the

best of its potentiaC to serve the needs of the country@s heaCth care system.

CHAPTER III: REEARCH METHODOLO!Y

,.1. REAEARCH PROCE

,.2. LITRATURE TUDY

,.,. HO6 TO FIND RI!HT LITRATURE

,.. OURCE OF DATA

*L& * L & 5 ( # & S ! ! ' ! * -age 2


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REEARCH METHODOLO!Y

!o be abCe to estimate the reCiabiCity of a report= the methods Ehich it is based upon haveto be considered. Hence= this third chapter= methodoCogy= EiCC give the reader an insightinto my research process= seCection and data coCCection.

,.1. REAEARCH PROCE:

,y Eork began Eith a Citerature study= foCCoEed by preparation for my data coCCection.,y data coCCection incCuded the detaiC about various heaCth insurance companies and their schemes= Ehich anaCyed. dreE concCusions from the anaCysis Ehich gave me anansEer to our purpose. !he different steps are separateCy presented beCoE under corresponding headCines.

*L& * L & 5 ( # & S ! ! ' ! * -age 2


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,.2. LITRATURE TUDY:

!he first part of the Eork Eith our dissertation Eas to carry out a Citerature study. beganEith a preCiminary treatment of the Citerature.

,.,. HO6 TO FIND RI!HT LITRATURE:

!o be abCe to see Ehich direction Ee Eanted our empiric study to take Ee began by)onsidering the subject of the ndian nsurance Sector. !o get the essentiaC informationfor the frame of reference carried out a Citerature study=concentrating on reCevant booksand articCes. !he Citerature Eas of scientific character and mainCy concerned the topicsCike insurance sector in ndia= roCe of heaCth insurance=benefits of heaCth insurance=historyand current scenario of heaCth sector in ndia. n addition to the books= used articCesfrom various EeCC knoEn journaCs.

A /&el)0)na&+ l)te&at'&e t&eat0ent

(fter acFuiring Citerature needed= it can be beneficiaC to prioritie them and makeorganied notes of the content before starting the Eork of the frame of references. used-ateC R +avidson@s 1


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!he data coCCected for this project is basicaCCy secon(a&+ (ata 8*)c* )s collecte( from

;ournaC= ,agines= nternet and Books.(s it is reaCCy a very difficuCt task to take vieEs

of higher authorities of any company in such a Cess time and anaCyse their reponses.

CHAPTER I":

ANALYI OF

DATA

*L& * L & 5 ( # & S ! ! ' ! * -age 2


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.1. Healt* Ins'&ance )n In()a O//o&t'n)t)es C*allen%es an( Conce&ns

Healt* Ins'&ance

HeaCth insurance in a narroE sense EouCd be Man individuaC or group purchasing heaCth

care coverage in advance by paying a fee caCCed !rmium." n its broader sense= it EouCd

be any arrangement that heCps to defer= deCay= reduce or aCtogether avoid payment for

heaCth care incurred by individuaCs and househoCds. iven the appropriateness of this

definition in the ndian conteGt= this is the definition= Ee EouCd adopt. !he heaCth

insurance market in ndia is very Cimited covering about 1DJ of the totaC popuCation. !he

eGisting schemes can be categoried as6

/oCuntary heaCth insurance schemes or private?for?profit schemesO

*mpCoyer?based schemesO

nsurance offered by &"s A community based heaCth insurance= and

,andatory heaCth insurance schemes or government run schemes nameCy *SS=

)HS:.

.2. "ol'nta&+ *ealt* )ns'&ance sc*e0es o& /&)atefo&/&of)t sc*e0es

n private insurance= buyers are EiCCing to pay premium to an insurance company that

pooCs peopCe Eith simiCar risks and insures them for heaCth eGpenses. !he key distinction

is that the premiums are set at a CeveC= Ehich provides a profit to third party and provider

*L& * L & 5 ( # & S ! ! ' ! * -age 2


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institutions. -remiums are based on an assessment of the risk status of the consumer or

of the group of empCoyees: and the CeveC of benefits provided= rather than as a proportion

of the consumer@s income.

n the pubCic sector= the eneraC nsurance )orporation ): and its four subsidiary

companies &ationaC nsurance )orporation= &eE ndia (ssurance )ompany= "rientaC

nsurance )ompany and 'nited nsurance )ompany: and the Life nsurance )orporation

L): of ndia provide voCuntary insurance schemes. !he Life nsurance )orporation

offers Ashad! Plan ## and $%an Asha Plan ##. !he eneraC nsurance )orporation

offers -ersonaC (ccident poCicy= $an Aro&ya !olicy, Ra' Ra'shari !olicy, Mdiclaim

!olicy, %rsas Mdiclaim !olicy, *ancr #nsuranc !olicy, Bha%ishya Aro&ya !olicy

and Dradd Disas !olicy (Sri%asta%a + as -uotd in Bhat R Mal%ankar D,

2000)

"f the various schemes offered= ,edicCaim is the main product of the ). !he ,edicaC

nsurance Scheme or ,edicCaim Eas introduced in &ovember 1 D yrs. )hiCdren 3 months > 0 yrs: are

covered Eith their parents. !his scheme provides for reimbursement of medicaC eGpenses

noE offers cashCess scheme: by an individuaC toEards hospitaCiation and domiciCiary

hospitaCiation as per the sum insured. !here are eGcCusions and pre?eGisting disease

cCauses. -remiums are caCcuCated based on age and the sum insured= Ehich in turn varies

from #s 10 DDD to #s 0 DD DDD. n 1


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had onCy covered 4DD DDD individuaCs by 1


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of diagnosis. !he iCCnesses covered incCude6 first heart attackO )oronary artery disease

reFuiring surgery6 strokeO cancerO kidney faiCureO major organ transpCantationO muCtipCe

scCerosisO surgery on aortaO primary puCmonary arteriaC hypertension= and paraCysis. hiCe

eGcCusion cCauses appCy= premium rates are competitive and high?sum insurance

can be opted for by the insured.

? !he HospitaC )ash +aiCy (CCoEance -oCicy provides cash benefit for each and every

compCeted day of hospitaCiation= due to sickness or accident. !he amount payabCe per

day is dependant on the seCected scheme. +ependant spouse and chiCdren aged 3 months

> 21years: can aCso be covered under the -oCicy. !he benefits payabCe to the

dependants are Cinked to that of insured. !he -oCicy pays for a maGimum singCe

hospitaCiation period of 3D days and an overaCC hospitaCiation period of 3DAD compCeted

days per poCicy period per person regardCess of the number of confinements to

hospitaCAnursing home per poCicy period.

ICICI Lo0ba&(: )) Lombard offers roup HeaCth nsurance -oCicy. !his

poCicy is avaiCabCe to those aged 0 > D years= Eith chiCdren being covered Eith

their parents: and is given to corporate bodies= institutions= and associations. !he

sum insured is minimum #s 10 DDDA? and a maGimum of #s 0DD DDDA?. !he premium chargeabCe depends upon the age of the person and the sum insured

seCected. ( sCab Eise group discount is admissibCe if the group sie eGceeds 1DD.

!he poCicy covers reimbursement of hospitaCiation eGpenses incurred for

diseases contracted or injuries sustained in ndia. ,edicaC eGpenses up to 3D days

for -re?hospitaCiation and up to D days for post?hospitaCiation are aCso

admissibCe. *GcCusion cCauses appCy. ,oreover= favourabCe cCaims eGperience is

recognied by discount and converseCy= unfavourabCe cCaims eGperience attracts

Coading on reneEaC premium. "n payment of additionaC premium= the poCicy can

be eGtended to cover maternity benefits= pre?eGisting diseases= and reimbursement

of cost of heaCth check?up after four consecutive cCaims?free years.

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Ma3 Ne8 Yo&$ L)fe Ins'&ance: !he Ceading private Cife insurance company ?

,aG &eE $ork Life nsurance )ompany Ltd. has Caunched CifeCine ? a heaCth

insurance product on ednesday= 0th ,arch 2DD= across ndia. &oE= the

company can boast of offering compCete heaCth and Cife insurance products across

CC regions in ndia. !his neECy Caunched heaCth insurance product of ,aG &eE

$ork Life nsurance )ompany offers three groups of heath insurance soCutions.

!he +irector ,arketing -roduct ,anagement and )orporate (ffairs of ,aG &eE

$ork Life nsurance said that these three distinct heath insurance products are

meant to cover eventuaCities Cike hospitaCiation= surgery and criticaC iCCness of the

insured. He points out that these pCans have been structured Eith features Cike

coverage for a Eide range of aiCments= no cCaim discount on revised premium for

a heaCthy Cife= a fiGed premium for a five?year term= free second opinion from the

best heaCth care institutions of ndia on detection of iCCness. %urther= it aCso has

provision for a free teCephonic medicaC heCpCine across ndia.

!he hospitaCiation ? is covered by Q,edicash pCanQ= Ehich is meant to provide a

fiGed amount of cash benefit on a day?to?day basis during the entire period of

hospitaCiation of the insured. !he ,edicash pCan EouCd aCso cover eGpenses foradmission in )'= Cump sum benefits against an unCimited number of surgeries

and recuperation benefits.

!he second pCan of the neECy Caunched heaCth insurance of ,aG &eE $ork Life

nsurance= is the QeCCness -CanQ= Ehich is a more attractive one and covers

criticaC iCCness Cike cancer= aCheimers= heart aiCments= Civer disease= deafness=

permanent disabiCity= etc. !he eCCness pCan covers thirty eight criticaC iCCnesses=

Ehich is the highest number of iCCness covered under one insurance pCan in ndia

by any insurance company.

!he third heaCth insurance poCicy of ,aG &eE $ork Life nsurance is a term pCus

heaCth protection pCan knoEn as QSafety &etQ. !his provides coverage to the

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insured person for any Cosses incurred by himAher in eventuaCities Cike criticaC

iCCness= accident= disabiCity and death.

ith 21 Cakh Cife insurance poCicies and Eith an assured sum of #s 2=DDD crores

in its kitty ,aG Life nsurance Eishes to achieve business at Ceast five percent

higher than it did in the Cast financiaC year. !he company aCso announced that it

EouCd go for an eGpansion drive and EouCd aCso increase the number of branch

offices in !amiC &adu Eithin the fiscaC year 2DD?2DD


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of treatment. "ver 13D minor surgeries that reFuire Cess than 24 hours

hospitaCiation under day care procedure are aCso covered. *Gtra heaCth covers Cike

generaC heaCth and eye eGamination= CocaC ambuCance service= hospitaC daiCy

aCCoEance= and 24 hours assistance can be avaiCed of.*GcCusion cCauses appCy.

E0/lo+e&base( sc*e0es:*mpCoyers in both the pubCic and private sector offers

empCoyer?based insurance schemes through their oEn empCoyer?managed

faciCities by Eay of Cump sum payments= reimbursement of empCoyee@s heaCth

eGpenditure for outpatient care and hospitaCiation= fiGed medicaC aCCoEance=

monthCy or annuaC irrespective of actuaC eGpenses= or covering them under the

group heaCth insurance poCicy. !he raiCEays= defence and security forces=

pCantations sector and mining sector provide medicaC services and A or benefits to

its oEn empCoyees. !he popuCation coverage under these schemes is minimaC=

about 3D?0D miCCion peopCe.

.,. Ins'&ance offe&e( b+ N!Os B co00'n)t+base( *ealt* )ns'&ance

)ommunity?based funds refer to schemes Ehere members prepay a set amount each year

for specified services. !he premia are usuaCCy fCat rate not income?reCated: and thereforenot progressive. ,aking profit is not the purpose of these funds= but rather improving

access to services. "ften there is a probCem Eith adverse seCection because of a Carge

number of high?risk members= since premiums are not based on assessment of individuaC

risk status. *Gemptions may be adopted as a means of assisting the poor= but this EiCC aCso

have adverse effect on the abiCity of the insurance fund to meet the cost of benefits.

)ommunity?based schemes are typicaCCy targeted at poorer popuCations Civing in

communities= in Ehich they are invoCved in defining contribution CeveC and coCCecting

mechanisms= defining the content of the benefit package= and A or aCCocating the schemes=

financiaC resources (#ntrnational 1aour 33ic 4ni%rsitis Pro&ramm 2002 as -uotd

in Ranson / Acharya A, 200). Such schemes are generaCCy run by trust hospitaCs or

nongovernmentaC organiations &"s:. !he benefits offered are mainCy in terms of

*L& * L & 5 ( # & S ! ! ' ! * -age 2


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preventive care= though ambuCatory and in?patient care is aCso covered. Such schemes

tend to be financed through patient coCCection= government grants and donations.

ncreasingCy in ndia= )BH schemes are negotiating Eith the for? profit insurers for the

purchase of custom designed group insurance poCicies. HoEever= the coverage of such

schemes is CoE= covering about 3D?0D miCCion Bhat= +). ( revieE by Bennett= )resse

et aC. (as -uotd in Ranson / Acharya A, 200) indicates that many community?based

insurance schemes suffer from poor design and management= faiC to incCude the poorest?

of?the? poor= have CoE membership and reFuire eGtensive financiaC support. "ther issues

reCate to sustainabiCity and repCication of such schemes.

o0e e3a0/les of co00'n)t+base( *ealt* )ns'&ance sc*e0es a&e ()sc'sse( *e&e)n.

elfE0/lo+e( 6o0enGs Assoc)at)on =E6A? !'-a&at: !his scheme

estabCished in 1


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being restricted to members of the (,'L +airy )ooperatives. Since then= over 1

DD DDD househoCds have been enroCCed under this scheme= Eith the !% functioning

as a third party insurer.

T*e Mall'& M)l$ Coo/e&at)e in 5arnataka estabCished a )BH scheme in 1


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1


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E0/lo+ee an( tate Ins'&ance c*e0e =EI?

!he enactment of the *mpCoyees State nsurance (ct in 1


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groups can be avaiCed of= under the provisions of the ,aternity Benefit (mendment: (ct

1


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impCementation even as a piCot project.

n keeping Eith the recommendations of the !enth %ive $ear -Can and the &ationaC

HeaCth -oCicy &H-: 2DD2= the +epartment of %amiCy eCfare is aCso proposing to

commission studies in eight states covering eight districts= to generate district?specific

data= Ehich is essentiaC for conceptuaCiation of a reasonabCe and financiaCCy viabCe

insurance scheme.

!he current pCan > the !enth %ive $ear -Can 2DD2?D8: ? aCso focuses on eGpCoring

aCternative systems of heaCth care financing incCuding heaCth insurance so that essentiaC=

need?based and affordabCe heaCth care is avaiCabCe to aCC. !he urgent need to evoCve=

impCement and evaCuate an appropriate scheme for heaCth financing for different income

groups is acknoECedged. n the past= the government has tried to ensure that the poor get

access to private heaCth faciCities through subsidy in the form of duty eGemptions and

other such benefits. SociaC heaCth insurance for famiCies Civing beCoE the poverty Cine has

been suggested as a mechanism for reducing the adverse economic conseFuences of

hospitaCiation and treatment for chronic aiCments reFuiring eGpensive and continuous

care.

n the budget for the year 2DD2?2DD3= an insurance scheme caCCed $anraskha Eas

introduced= Eith the aim of providing protection to the needy popuCation. ith a premium

of #e 1A? per day= it ensured indoor treatment up to #s 3 DDD per year at seCected and

designated hospitaCs and outpatient treatment up to #s 2 DDD per year at designated

cCinics= incCuding civiC hospitaCs= medicaC coCCeges= private trust hospitaCs and other &"?

run institutions. ( feE states have started impCementing this scheme under piCot phase.

n the budget for the period 2DD3?2DD4= another initiative of community?based heaCth

insurance has been announced. !his scheme aims to enabCe easy access of Cess

advantaged citiens to good heaCth services= and to offer heaCth protection to them. !his

poCicy covers peopCe betEeen the age of three months to 0 years. 'nder this scheme= a

premium eFuivaCent to #e 1 per day or #s 30 per year: for an individuaC= #s 1.0D per

day for a famiCy of five or #s 04 per year:= and #s 2 per day for a famiCy of seven or

*L& * L & 5 ( # & S ! ! ' ! * -age 2


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#s 83D per year:= EouCd entitCe them to get reimbursement of medicaC eGpenses up to

#s 3D DDD toEards hospitaCiation= a cover for death due to accident for #s 20DDD and

compensation due to Coss of earning at the rate of #s 0D per day up to a maGimum of 10

days. !he government EouCd contribute #s 1DD per year toEards the annuaC premium= so

as to ensure the affordabiCity of the scheme to famiCies Civing beCoE the poverty Cine. !he

impCementation of this scheme rests Eith the four pubCic sector insurance companies.

!he government aCso offers assistance by Eay of CCness (ssistance %unds= Ehich have

been set up by the ,inistry of HeaCth and %amiCy eCfare at the nationaC CeveC and in a

feE states. State CCness (ssistance %unds eGist in (ndhra -radesh= Bihar= oa= ujarat=

HimachaC -radesh= ;ammu and 5ashmir= 5arnataka= 5eraCa= ,adhya -radesh=

,aharashtra= ,ioram= #ajasthan= Sikkim= !amiC &adu= !ripura= est BengaC= &)! of

+eChi and '! of -ondicherry. ( &ationaC CCness (ssistance %und &(%: Eas set up in

1


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by the nsurance )ompany= nameCy the &eE ndia (ssurance )ompany.

!he overnment of oa aCong Eith the &eE ndia (ssurance )ompany in 1


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CHAPTER ": UMMARY AND CONCLUION

!he preceding sections of this paper present the heaCth insurance scenario in ndia. iven

the situation= there are feE issues of concern or barriers toEards impCementing a sociaC

heaCth insurance scheme in ndia. !hese are enumerated beCoE aCong Eith the possibCe

Eay ahead.

ndia is a CoE?income country Eith 2J popuCation Civing beCoE the poverty Cine= and

30J iCCiterate popuCation Eith skeEed heaCth risks. nsurance is Cimited to onCy a smaCC

proportion of peopCe in the organied sector covering Cess than 1DJ of the totaC

popuCation. )urrentCy= there no mechanism or infrastructure for coCCecting mandatory

premium among the Carge informaC sector. *ven in terms of the eGisting schemes= there is

insufficient and inadeFuate information about the various schemes. +ata gaps aCso

prevaiC. ,uch of the focus of the eGisting schemes is on hospitaC eGpenses. !here

continues to be Cack of aEareness among peopCe about heaCth insurance. n spite of

eGisting reguCation in some States= the private sector continues to operate in an aCmost

unhindered manner. !he groEth of heaCth insurance increases the need for Cicensing and

reguCating private heaCth providers and deveCoping specific criteria to decide upon

appropriate services and fees.HeaCth insurance per se= suffers from probCems Cike adverse

seCection= moraC haard= cream?skimming and high administrative costs. !his is coupCed

Eith the fact that in the absence of any costing mechanisms= there is difficuCty in

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caCcuCating the premium. !here is aCso a need to evoCve criteria to be used for deciding

upon target groups= Eho EouCd avaiC of the SH schemeAs and aCso to

address issues reCating to Ehether indirect costs EouCd be incCuded in heaCth insurance.

HeaCth insurance can improve access to good FuaCity heaCth care onCy if it is abCe to

provide for heaCth care institutions Eith adeFuate faciCities and skiCCed personneC at

affordabCe cost.

iven this scenario= the chaCCenge= then= for ndian poCicy?makers is to find Eays to

improve upon the eGisting situation in the heaCth sector and to make eFuitabCe= affordabCe

and FuaCity heaCth care accessibCe to the popuCation= especiaCCy the poor and the

vuCnerabCe sections of the society. t is in a Eay inevitabCe that the state reforms its pubCic

heaCth deCivery system and eGpCores other sociaC security options Cike heaCth insurance.

mpCementing reguCations EouCd be one= but by no means the best mechanism to contain

provider behaviour and costs. !his can onCy be done by deveCoping mechanisms Ehere

government and househoCds can together pooC their funds. !his couCd be one Eay of

controCCing provider behaviour.

!here is an urgent need to document gCobaC and ndian eGperiences in sociaC heaCth

insurance. +ifferent financing options EouCd need to be deveCoped for different target

groups. !he Eide differentiaCs in the demographic= epidemioCogicaC status and the

deCivery capacity of heaCth systems are a serious constraint to a nationaCCy mandated

heaCth insurance system. iven the heterogeneity of different regions in ndia and the

regionaC specifications= one EouCd need to undertake piCot projects to gather more

information about the popuCation to be targeted under an insurance scheme and deveCop

options for different popuCation groups. HeaCth poCicy?makers and heaCth systems

research institutions= in coCCaboration Eith economic poCicy study institutes= need to

gather information about the prevaiCing disease burden at various geographicaC regionsO to

deveCop standard treatment guideCines= to undertake costing of heaCth services for

evoCving benefit packages to determine the premium to be Cevied and subsidies to be

givenO and to map heaCth care faciCities avaiCabCe and the institutionaC mechanisms Ehich

need to be in pCace= for impCementing heaCth insurance schemes. SkiCC? buiCding for the

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personneC invoCved= and capacity?buiCding of aCC the stakehoCders invoCved= EouCd be a

criticaC component for ensuring the success of any heaCth insurance programme.

!he success of any sociaC insurance scheme EouCd depend on its design=the

impCementation and monitoring mechanisms Ehich EouCd be set in pCace and it EouCd

aCso caCC for restructuring and reforming the heaCth system= and deveCoping the necessary

prereFuisites to ensure its success.

CHAPTER "I: U!!ETION AND RECCOMENDATION

HeaCth insurance is Cike a knife. n the surgeon@s hand it can save the patient= EhiCe in the

hands of the Fuack= it can kiCC. HeaCth insurance is going to deveCop rapidCy in future. !he

main chaCCenge is to see that it benefits the poor and the Eeak in terms of better coverage

and heaCth services at CoEer costs Eithout negative aspects of cost increase and overuse

of procedures and technoCogy in provision of heaCth care.

n ndia has Cimited eGperience of heaCth insurance. iven that government has

CiberaCied the insurance industry= heaCth insurance is going to deveCop rapidCy in future.

!he chaCCenge is to see that it benefits the poor and the Eeak in terms of better coverage

and heaCth services at CoEer costs Eithout the negative aspects of cost increase and over

use of procedures and technoCogy in provision of heaCth care. !he eGperience from other

pCaces suggest that ifheaCth insurance is Ceft

Documents

32188711 Health Insurance