2. RajbirKaur,MPH,PU
Contents:
• Meaning of health insurance.
• Some of the key terms used.
• History of health insurance.
• Model of total health expenditure.
• Table of different countries for health
expenditure and private health insurance.
• Health insurance in different countries.
3. RajbirKaur,MPH,PU
• Health insurance in India.
• Statistics
• Table of health care financing
• Typical model of health insurance.
• Proposed model of health insurance.
• Role of private health insurance
• Laws and authorities
• List of Public Sector Banks.
• List of Private banks.
• Coverage of health insurance
• Benefits of health insurance.
• Drawbacks of health insurance.
• How to go for insurance.
4. RajbirKaur,MPH,PU
Health Insurance: Meaning
• prepayment plan providing services or
cash indemnities for medical care
needed in times of illness or disability.
• all about protection- against an illness.
5. RajbirKaur,MPH,PU
Terms
• Policy – the legal document issued by
the insurance company that outlines the
terms and conditions of the insurance.
• Policyholder – the person who buys
the insurance; also called the "insured."
• Premium – the payment required to
keep your insurance policy in force
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• Claim –. a person's request for
payment by an insurer of a loss covered
by a policy
first-party claims- claims to your
own insurance company
third-party claims- claims made by
one person against another person's
company
• Exclusion – specific conditions or
circumstances listed in the policy that
are not covered by the policy.
7. RajbirKaur,MPH,PU
• Occurrence – an accident that results
in bodily injury during the period of an
insurance policy.
• Peril – the cause of loss or damage.
• Risk – the chance of a loss.
• Underwriting – the process of
selecting risks for insurance, and
determining how much to charge to
insure these risks and which coverage
to provide.
8. RajbirKaur,MPH,PU
Health insurance history
• (1883–84) in Germany Compulsory
accident and sickness insurance was
initiated by Otto von Bismarck
• adopted by Great Britain, France,
Chile, the Soviet Union, and other
nations after World War I.
• Act of 1946, In Britain the National
Health Insurance which went into effect
in 1948, provided the most
comprehensive compulsory medical care
plan.
9. RajbirKaur,MPH,PU
individual obtained free medical
attention (participating doctor national
health service)
cost was met by the national
government and local taxation
nominal charges for some services
were levied since then
• 1958 the Canadian Hospital and Diagnoses
Act provided full hospital services almost
free of charge in public wards
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• more comprehensive coverage added
in 1967( financed by the federal
government ; administered by the
provinces)
• National health insurance- widely
adopted in Europe and parts of Asia.
• United States –the only Western
industrial nation without
comprehensive national health
insurance
11. RajbirKaur,MPH,PU
Health expenditure
Tax-based and
out-of-pocket
expenses are
direct expense
related outlays
Health
insurance
involves a fund
pool for future
health care
External fund
sources rely on
donations,
grants
Total healthTotal health
expenditureexpenditure
PublicPublic
PrivatePrivate
SocialSocial
securitysecurity
ExternallyExternally
fundedfunded
Tax-fundedTax-funded
PrivatePrivate
health ins.health ins.
ExternallyExternally
sourcedsourced
Out-of-Out-of-
pocketpocket
Using central / stateUsing central / state
revenues for healthrevenues for health
Compulsory premiumCompulsory premium
contributions tocontributions to
healthhealth
Channeling loans,Channeling loans,
grants etc. togrants etc. to
healthcarehealthcare
Payments to healthPayments to health
care providers forcare providers for
servicesservices
PremiumPremium
contributions towardscontributions towards
health supporthealth support
Channeling donationsChanneling donations
etc. to healthcareetc. to healthcare
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PHE*
(% of total)
PHE* cover
(%)
Nature of PHE* cover PHI**
(% of total)
PHI** cover
(%)
Australia 68.9 100 • All permanent residents as
enrolled under MediCare (tax-
financed)
7.3 44.9
France 75.8 99.9 • Social security systems
covering all residents
12.7 86.0
Greece 56.1 100 • All population (financed through
tax and health insurance
contributions)
N.A. 10.0
Mexico 47.9 50 • Formal worker section and
government employees
• Voluntary system for others
2.5 2.8
Portugal 68.5 100 • All permanent residents as
enrolled under NHS (tax-
financed)
1.5 14.8
UK 80.9 100 • All permanent residents as
enrolled under NHS (tax-
financed)
3.3 10.0
US 44.2 24.7 • Above 65 or disabled
(MediCare), poor (Medicaid) and
poor children (SCHIP)
35.1 71.9
* PHE: Public health expenditure
** PHI: Private health insurance
14. RajbirKaur,MPH,PU
UK
The National Health Service (NHS)
• Founded over 50 years ago.
• defining element - principle of equal
treatment
• equal access to all necessary medical
services –regardless of their financial
status
• basic medical services are guaranteed
to all residents of the UK.
• Medical treatment is free.
17. RajbirKaur,MPH,PU
France
Régime général d`assurance
maladie
• Everyone (a domicile of France)
receives protection through insurance
• Principle of solidarity
• covers financial risks caused by illness,
maternity, disability and death
• offers financial protection in case of
industrial accidents and occupational
diseases
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• also special health insurances apart
from the general health insurance, for
· self-employed persons, artists and
traders (3.1%)
· farmers (4.2%)
· some occupational groups like sailors,
miners or railway men
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Couverture maladie
universelle
• students and persons, who do not belong
to the area of responsibility of a
professional insurance system
• The CMU came into force on January 1,
2000 in order to introduce compulsory
health insurance not connected with any
occupation.
20. RajbirKaur,MPH,PU
Australia
Lifetime Health Cover
• Lifetime Health Cover is a Government
initiative
• health funds charged differently
premiums based on age of member
• recognizes the length of time of private
health insurance -rewards by offering
lower premiums.
• People taking hospital cover early in life
charged lower premiums throughout
their life
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India
• No universal health insurance in India
• Limited to industrial workers and their
families
• Central Govt. Health Scheme(1954)
• Employees state Insurance
scheme(1948)
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Statistics
• Yet, 80 per cent of Indian
population is without life insurance
cover
• this part of the population subject
to weak social security and
pension systems with hardly any
old age income security.
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The proportion of insurance in health care
financing in India is extremely low . . .
Public spending in
health care is
very low at 17%
and the National
Health Policy has
recognized this
More than 86% of
healthcare
financing is
through
unplanned or,
non-contributory
spending
0%
100%
Source of finance Means of finance
86% from
out-of-
pocket
expenses
83% from
private
sector
spending
Health care financing in India
2002, %
Source: WHO. CII-McKinsey. 2003.
25. RajbirKaur,MPH,PU
The traditional
model has
focused on
insurers or
intermediaries
working with
the employed
segment only
as the front-
end
IndividualIndividual
InsurerInsurer
ProviderProvider
GovernmentGovernment
/ Employer/ Employer
Fixed feesFixed fees
ServiceService
chargescharges
VoluntaryVoluntary
premiumspremiums
MandatoryMandatory
premiumpremium
MandatoryMandatory
premiumpremium
Could be allied toCould be allied to
insurer or be ainsurer or be a
governmentgovernment
approvedapproved
providerprovider
IntermediariesIntermediaries
Financial flows
Service flows
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to one that allows the flexibility
to serve different segments of
the population, in an efficient
manner . . .
27. RajbirKaur,MPH,PU
. . .
Health insurance
providers may need
to align themselves
to overall health
care including
financing,
preventive health
care and health
outreach in order
to grow coverage
Regulations and
policy must be
designed to
encourage this
Self-employedSelf-employed
populationpopulation
SalariedSalaried
populationpopulation
Unemployed /Unemployed /
PoorPoor
Government /Government /
EmployersEmployers
GovernmentGovernment
PrivatePrivate
hospitalshospitals
PublicPublic
hospitalshospitals
ClinicsClinics ChemistsChemists
Insurers / NGOsInsurers / NGOs::
Processing activities and claims settlementProcessing activities and claims settlement
Insurers / NGOsInsurers / NGOs::
Enrolments and actuarial assessmentEnrolments and actuarial assessment
Health
care
Health
insurance
Insurers / NGOs:Insurers / NGOs:
Community health facilities / health educationCommunity health facilities / health education
EmployerEmployer
supportedsupported
healthhealth
insuranceinsurance
GovernmentGovernment
sponsoredsponsored
healthhealth
insuranceinsurance
VoluntarilyVoluntarily
funded healthfunded health
insuranceinsurance
CommunityCommunity
healthhealth
schemesschemes
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The experience of different
countries suggests that private
insurance has an important
role to play in overall health
care . . .
29. RajbirKaur,MPH,PU
• Private health insurance has enhanced access to
timely hospital care
e.g. In UK, waiting time reduction and private
health insurance coverage have led to a
virtuous cycle
• Private health insurance has increased service
capacity and supply by injecting financial
resources up front
e.g. In the US, private health insurance has
financed hospitals in terms of doctors and
facilities
• Private health insurance increases choice
(provider, benefits, cost-sharing) for the individual
e.g. In Australia, private health insurance offer
the option of access to spare capacity and
elective care in non-public institutions
Private health
insurance has led
to expansion of
health coverage
and expenditure
in other countries
However,
regulation as well
as the role of
public health
expenditure
cannot be
ignored
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laws
• Insurance regulation formally began in
India with the passing of the Life
Insurance Companies Act of 1912 and
the provident fund Act of 1912
• Insurance is a federal subject in India.
There are two legislations that govern
the sector- The Insurance Act- 1938
and the IRDA Act- 1999.
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Authority-IRDA
• The General Insurance Corporation has
regulated some of the main health
policies that are offered by the Indian
Insurance Companies.
• United India Insurance Co Ltd.,
• New India Assurance Co Ltd.,
• Oriental Insurance Co Ltd. and
• National Insurance Co Ltd.
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Oriental Insurance Corporation, National
India Assurance Corporation, National
Insurance Corporation,
United India Insurance Corporation.
• Overseas Mediclaim Insurance
(Employment & Study)
(Corporate Frequent Traveller)
(Business & Holiday)
• Personal Accident Insurance
• Group Personal Accident Insurance
• Jan Arogya Bima Policy
• Medi Claim Policy
33. RajbirKaur,MPH,PU
Central Govt. Health Scheme
• Provides comprehensive medical care to
central govt. employees
• Mutual advantage to both employee and
employer
• Started in 1954 with 16 allopathic
dispensaries covering 2.3 lac
beneficiaries
• Now 320 dispensaries/hospitals in
various systems of medicines covering
42.76 lac beneficiaries
35. RajbirKaur,MPH,PU
List of private banks
• Bajaj Alliaz
• Cholamandalam
• ICICI Lombard
• Iffco-Tokio
• National Insurance
• New India
• Oriental Insurance
• Reliance
• Royal Sundaram
• Star Health
36. RajbirKaur,MPH,PU
insurance cover applies to
various costs
1. care through general practitioner
2. care services
3. artificial limbs
4. pharmaceutical products
5. medical aid
6. analysis and laboratory examination
stay and treatment in care facilities
7. rehabilitation clinics and surgical
stations
part of the transportation costs
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9. care in case of maternity; also aid care
and hospital stay
10.medical observation of newly born
children
11.Care services, which are required due
to the state of health, will be covered
for people in need of care.
38. RajbirKaur,MPH,PU
Benefits of insurance
• timely coverage for regular or at least
with annual health check ups.
• ability to afford for the medical
expenses.
• Uninsured Pregnant women use lesser
services
• get screening or preventive services.
40. RajbirKaur,MPH,PU
. .• Limited coverage
– Only around 10% of the population is covered
– Geographic spread in terms of health care
facilities and financing awareness is limited
– Selection criteria by suppliers often restricts
the poor (and more likely to be ill) from
affordable pre-payment schemes
• System leakages
– Provider malpractices leading to over-
charging or pre-selection / selective
recommendation
• Lack of universal schemes
– Limitations in terms of coverage of illnesses
as well as treatment options
– Alternative therapies often not considered /
included under insurance
The extent of
coverage as well
as the type of
coverage are the
key issues related
to insurance
penetration
Some companies
have put-off plans
for India due to
potential leakages
in the system
41. RajbirKaur,MPH,PU
Criticism of insurance companies
• modern insurance companies –
indulging in money-making businesses
with little interest in insurance.
• the purpose of insurance is to spread
risk so the reluctance of insurance
companies to take on high-risk cases to
run counter to the principle of
insurance.
42. RajbirKaur,MPH,PU
Other criticisms include:
• Insurance policies contain too many
exclusion clauses.
• Most insurance companies now use call
centres and staff attempt to answer
questions by reading from a script. It is
difficult to speak to anybody with expert
knowledge.
43. RajbirKaur,MPH,PU
How to go for insurance- basic
knowledge
• If you are healthy- Basic Health Insurance
Plan
• If at hereditary risk/poor health-Critical
Illness Policy
-plays lump sum when holder is
diagnosed with one of specified critical
illness.( cancer, CAD, Heart attack, major
organ transplant, paralysis, stroke)
-after lump sum is paid policy
terminates
-these policies are far cheaper than
basic health policies, so can’t depend
alone on these.
44. RajbirKaur,MPH,PU
Bajaj Allianz general
insurance
Silver Health
National Insurance Varishtha Mediclaim
New India Assurance Sr. Citizen Mediclaim
Oriental Insurance Health of Privileged Elder
Star Health Allied Sr. Citizen Red Carpet
United India
Insurance
Sr. Citizen Mediclaim
• Critical Plans-3 types-Rider, Term &
Regular
• Senior citizens specific covers
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• Family Health Cover- Floater Plans
covers each member separately
gives higher coverage at lower cost
per person
• Disease Specific Plans- covers specific
diseases including pre-existing ones
good as regular checkups are done
regular screening & early detection
ICICI Prulife Cancer, Diabetes
Star Health Diabetes
46. RajbirKaur,MPH,PU
Below Poverty Line
• Union Budget- 15% hike on Health
• Punjab & Haryana (April 1,2008)
• Arogaya Kosh Yojana under NHIS-2cr
for free diagnostic tests
• Heart ailments, blood diseases, cancer,
ENT, Coronary bypass surgery covered.
• Vikalp Yojana- public-private
partnership, free consultancy and
medicines for registered BPL families in
private hospitals & clinics.
47. RajbirKaur,MPH,PU
Conclusion
• Growth potential for the insurance
sector is immense.
• Consideration required to poor and
unemployed.
• Private health insurance has positive
role to play.
• Insurance sector needs to widen its
scope from only providing treatment
facilities to promotive and preventive
health care
48. RajbirKaur,MPH,PU
References
• rparera@kpmg.comrparera@kpmg.com
• www.in.kpmg.comwww.in.kpmg.com
• World Health OrganizationWorld Health Organization
• Park K.(!8th Edition):Park K.(!8th Edition): Preventive and SocialPreventive and Social
MedicineMedicine
• Rowitz Louis:Rowitz Louis: Public Health for the 21stPublic Health for the 21st
CenturyCentury
• Merson Micheal H.:International PublicMerson Micheal H.:International Public
HealthHealth
• www.google.comwww.google.com
49. RajbirKaur,MPH,PU
• The Tribune
• The Indian Express-Money Express
Special Thanks to Mr.Gurpreet Singh
Senior Relationship Manager
ICICI direct
