Health Insurance-An Overview

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Information about Health Insurance-An Overview
Health & Medicine

Published on November 22, 2008

Author: rajbir

Source: slideshare.net

Overview of health insurance services

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.

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.

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.

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.

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.

prepayment plan providing services or cash indemnities for medical care needed in times of illness or disability.

all about protection- against an illness.

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 fo rce

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 fo rce

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 clai ms - 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.

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 clai ms - 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.

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.

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.

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.

(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.

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

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

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

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

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 health expenditure Public Private Social security Externally funded Tax-funded Private health ins. Externally sourced Out-of-pocket Using central / state revenues for health Compulsory premium contributions to health Channeling loans, grants etc. to healthcare Payments to health care providers for services Premium contributions towards health support Channeling donations etc. to healthcare

Using central / state revenues for health

Compulsory premium contributions to health

Channeling loans, grants etc. to healthcare

Payments to health care providers for services

Premium contributions towards health support

Channeling donations etc. to healthcare

Most countries have a mix of public and private role for health care funding . . .

* PHE: Public health expenditure ** PHI: Private health insurance 44.9 7.3 All permanent residents as enrolled under MediCare (tax-financed) 100 68.9 Australia 71.9 35.1 Above 65 or disabled (MediCare), poor (Medicaid) and poor children (SCHIP) 24.7 44.2 US 10.0 3.3 All permanent residents as enrolled under NHS (tax-financed) 100 80.9 UK 14.8 1.5 All permanent residents as enrolled under NHS (tax-financed) 100 68.5 Portugal 2.8 2.5 Formal worker section and government employees Voluntary system for others 50 47.9 Mexico 56.1 75.8 PHE* (% of total) 10.0 N.A. All population (financed through tax and health insurance contributions) 100 Greece 86.0 12.7 Social security systems covering all residents 99.9 France PHI** cover (%) PHI** (% of total) Nature of PHE* cover PHE* cover (%)

All permanent residents as enrolled under MediCare (tax-financed)

Above 65 or disabled (MediCare), poor (Medicaid) and poor children (SCHIP)

All permanent residents as enrolled under NHS (tax-financed)

All permanent residents as enrolled under NHS (tax-financed)

Formal worker section and government employees

Voluntary system for others

All population (financed through tax and health insurance contributions)

Social security systems covering all residents

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 .

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 .

free to choose private insurance. also possible, to take a full private insurance.

free to choose private insurance.

also possible, to take a full private insurance.

Germany Compulsory health insurance Health insurance companies responsible for compulsory health insurances. These are public corporations .

Health insurance companies responsible for compulsory health insurances.

These are public corporations .

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

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

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

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

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.

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.

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

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

India No universal health insurance in India Limited to industrial workers and their families Central Govt. Health Scheme(1954) Employees state Insurance scheme(1948)

No universal health insurance in India

Limited to industrial workers and their families

Central Govt. Health Scheme(1954)

Employees state Insurance scheme(1948)

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.

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.

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 86% from out-of-pocket expenses 83% from private sector spending Health care financing in India 2002, % Source: WHO. CII-McKinsey. 2003.

Traditional model for health insurance.

The traditional model has focused on insurers or intermediaries working with the employed segment only as the front-end Individual Insurer Provider Government / Employer Fixed fees Service charges Voluntary premiums Mandatory premium Mandatory premium Could be allied to insurer or be a government approved provider Intermediaries Financial flows Service flows

Fixed fees

Service charges

Voluntary premiums

Mandatory premium

Mandatory premium

Could be allied to insurer or be a government approved provider

to one that allows the flexibility to serve different segments of the population, in an efficient manner . . .

to one that allows the flexibility to serve different segments of the population, in an efficient manner . . .

. . . 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-employed population Salaried population Unemployed / Poor Government / Employers Government Private hospitals Public hospitals Clinics Chemists Insurers / NGOs : Processing activities and claims settlement Insurers / NGOs : Enrolments and actuarial assessment Health care Health insurance Insurers / NGOs: Community health facilities / health education Employer supported health insurance Government sponsored health insurance Voluntarily funded health insurance Community health schemes

The experience of different countries suggests that private insurance has an important role to play in overall health care . . .

The experience of different countries suggests that private insurance has an important role to play in overall health care . . .

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

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

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.

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.

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.

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.

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  

  Overseas Mediclaim Insurance (Employment & Study)  (Corporate Frequent Traveller)   (Business & Holiday)  

Personal Accident Insurance 

Group Personal Accident Insurance  

Jan Arogya Bima Policy  

Medi Claim Policy  

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

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

ESI corporation Provides cash and medical benefits to industrial employees Sickness, maternity and employment injury

Provides cash and medical benefits to industrial employees

Sickness, maternity and employment injury

List of private banks Bajaj Alliaz Cholamandalam ICICI Lombard Iffco-Tokio National Insurance New India Oriental Insurance Reliance Royal Sundaram Star Health United India

Bajaj Alliaz

Cholamandalam

ICICI Lombard

Iffco-Tokio

National Insurance

New India

Oriental Insurance

Reliance

Royal Sundaram

Star Health

United India

insurance cover applies to various costs care through general practitioner care services artificial limbs pharmaceutical products medical aid analysis and laboratory examination stay and treatment in care facilities 7. rehabilitation clinics and surgical stations part of the transportation costs

care through general practitioner

care services

artificial limbs

pharmaceutical products

medical aid

analysis and laboratory examination

stay and treatment in care facilities

7. rehabilitation clinics and surgical stations part of the transportation costs

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.

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.

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.

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.

key issue related to health care financing in India lack of adequate insurance

key issue related to health care financing in India

lack of adequate insurance

. . 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

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

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.

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.

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.

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.

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.

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.

Critical Plans-3 types-Rider, Term & Regular Senior citizens specific covers Sr. Citizen Mediclaim United India Insurance Sr. Citizen Red Carpet Star Health Allied Health of Privileged Elder Oriental Insurance Sr. Citizen Mediclaim New India Assurance Varishtha Mediclaim National Insurance Silver Health Bajaj Allianz general insurance

Critical Plans-3 types-Rider, Term & Regular

Senior citizens specific covers

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 Diabetes Star Health Cancer, Diabetes ICICI Prulife

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

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.

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.

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

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

References [email_address] www.in.kpmg.com World Health Organization Park K.(!8th Edition): Preventive and Social Medicine Rowitz Louis: Public Health for the 21st Century Merson Micheal H.:International Public Health www.google.com

[email_address]

www.in.kpmg.com

World Health Organization

Park K.(!8th Edition): Preventive and Social Medicine

Rowitz Louis: Public Health for the 21st Century

Merson Micheal H.:International Public Health

www.google.com

The Tribune The Indian Express-Money Express Special Thanks to Mr.Gurpreet Singh Senior Relationship Manager ICICI direct

The Tribune

The Indian Express-Money Express

Special Thanks to Mr.Gurpreet Singh

Senior Relationship Manager

ICICI direct

THANKS

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