The Right to Health is as important as the Right of Education. India’s per capita public spending on Health is an abysmal $ 32 or about Rs.1800 per annum.
The 12th Five Year Plan has proposed an outlay of Rs.28,560 Crore or $ 6 Billion for Health care. In the recent Budget speech, Hon’ble Finance Minister Mr. P. Chidambaram has proposed a multi pronged approach to increase the penetration of insurance, both in Life and General Insurance. He has put forth a number of proposals that have been finalised in consultation with the regulator, IRDA.
Insurance Companies (both LIC and the 4 PSU General Insurance Companies) will be empowered to open Branches in Tier II Cities & below with a population of 10,000 or more without prior approval of IRDA , on or before 31.3.2014. The main aim was to ensure penetration of insurance activities at the grass root level in the country to provide insurance coverage i.e. mainly Personal line of insurance, Micro Insurance and Health Insurance.
Amongst other effective points proposed for implementation, it has been mentioned that KYC of Banks will be sufficient to acquire insurance policies.
Banks will be permitted to act as an insurance brokers , as well, so that the entire network of bank branches will be utilised to increase penetration for selling
Micro Insurance including Health Insurance products. Group insurance products will now be offered to different socio-economic groups such as SHGs, domestic workers’ associations, anganwadi workers, teachers in schools and nurses in hospitals etc, who were overlooked earlier.
The Insurance Laws(Amendment) Bill and the PFRDA Bills have been placed before the House, which are likely to be cleared at the earliest.
The Central Government is considering the implementation of a comprehensive and integrated social security Package for the unorganised sector mainly for the benefit of the poorest and the most vulnerable sections of society. This Package will include life and disability cover, health cover, maternity assistance and pension benefits.
After giving the matter deep thought and considering past experience the Government of India finally designed a World Class Health Insurance Scheme for BPL Families in every nook & corner of the country w.e.f. 01.04.2008, which is referred to as the Rashtriya Swasthya Bima Yojana (RSBY).
The Rashtriya Swasthya Bima Yojana (RSBY) covers 34 Million Families below the Poverty Line. It is further extended to cover other categories like Rickshaw Pullers, Auto & Taxi Drivers, Sanitation Workers, Rag Pickers, Construction & Mine Workers.
This RSBY Scheme has the following unique features:
a) The participating BPL Household has some freedom of choice between Govt. Hospitals and Private Hospitals and this makes him a potential client for treatment and in return the Hospital will earn revenues.
b) A large volume of premium is paid to the Insurer and is totally dependent on the number of BPL families enrolled in the Scheme.
c) The scope of earning incentives by providing treatment to large number of beneficiaries.
d) Similarly, Govt. Hospitals are paid by the Insurer for providing treatment to BPL beneficiaries.
Information Technology (IT) applications are being used for Social Sector Schemes on a large scale. A biometric enabled smart card embedded with a chip of 64 KB facilities, instead of 32 KB, as earlier , will contain all the records of fingerprints and individual photographs of each BPL family along with other family particulars to make the scheme safe & foolproof.
The RSBY Schemes also provides other facilities like portability, which refers to enrolment in a particular district, which would enable that beneficiary to take Hospital Benefits from any empanelled Hospital, pan India.
This scheme provides cashless & paperless transactions. The beneficiary has to take his/her Smart Card & provide verification through his/her finger print. Similarly, no paper related for treatment is required by Insurer for claim settlement and to make payments to Hospitals /Nursing Home through NEFT/RTGS.
The RSBY Scheme is evolving as a robust monitoring and evaluation system. An elaborate backend data management system is being put in place which can trade any transaction across India and provide periodic analytical reports.
The 12th Five Year Plan for Healthcare is well thought out and it attracts the e-healthcare system, which can became a global benchmark. The Central Government is doing well in using the Tamil Nadu model as the blueprint of the National Healthcare Policy.
Tamil Nadu took the lead in providing Universal Health Coverage by setting up a effective drug procurement & distribution mechanism. Its IT enabled supply chain management system ensures delivery to needy patients, transparency to prevent misuse and stringent quality control to eliminate spurious drugs.
The Government is actively considering provision of Universal Health coverage upto Rs.30,000/- for all the citizens of India. At present, 78% of India’s Healthcare expenditure comes out of the patient’s pocket and drugs account for 72% of the expenditure. The new policy planned by the Centre will provide 52% of the population with 350 free essential drugs, by April 2017, at a cost of Rs.300 billion. This cost will be shared by the Centre and State Governments in 75:25 ratio.
To implement an effective policy the Government will need to put in place a robust IT infrastructure, stringent processes with checks & balances, quality compliance measures and the infrastructure to procure & distribute drugs. With the right approach, India can build one of the most advanced healthcare systems in the world.
This Tamil Nadu model shows e-healthcare structured around a robust IT infrastructure. It ensures transparency and accountability along with efficient supply and inventory management. It is the mission of the Tamil Nadu Medical Services Corporation (TNMSC), a State owned Company, to ensure availability of essential and affordable drugs to all. Its main aim is to build up a procurement & distribution system on a well designed IT architecture to ensure that the supply chain from the manufacturer to warehouses to pharmacy and finally to the patient is tracked. This IT system ensures quality compliance, transparency in procurement and distribution and prevention of misuse.
Other states like Rajasthan & Kerala are following this module & trying to replicate the referred Tamil Nadu Model. The present State Government of West Bengal has already decided to open Fair Price Drug Shops in all major Hospitals in Kolkata & Other District Hospitals. This is quite acceptable to the Central Government Health Department as well.
The Central Government has proposed raising the FDI threshold in insurance from 26% to 49%. In the pension sector the Government plans to raise the bar to 49%. This is because the Government wants higher insurance penetration and is of the opinion that the overseas joint venture partners of the private sector companies are in possession of adequate capital and are eager to invest in our country.
Therefore, the Insurers and IRDA have already started launching awareness campaigns for insurance needs and Insurance products for health, motor, house and travel insurance. In this aspect General Insurance Council with the collaboration of IRDA is playing a big role for awareness campaigns on Television, Newspapers, other media Channels with a total budget spending of Rs.16 cores.
Four Financial Regulators like the RBI, IRDA, SEBI & the PENSION Fund Regulatory and Development Authority have signed a MOU for co-operation in the field of consolidated supervision and monitoring of financial groups identified as Financial Conglomerates.
To remove confusion and bring better clarity in the various terms used in health insurance, the IRDA has issued the Health Insurance Regulations 2013 for standardisation of the same. In an elaborate circular addressed to life insurers, non life insurers, stand alone health insurers and TPAs, IRDA had defined 46 commonly used terms and standardized 11 critical illness terms.
It is expected that standard terms would reduce ambiguity, enable all stakeholders to provide better services and enable customers to interact more effectively with Insurers, TPAs and Service Providers. While life insurance companies are actively working to strengthen their health insurance portfolio, stand alone health insurance companies are taking steps to bring in more variety in their products.
However, our greatest hindrance in the Health Insurance sector is to prevent huge losses due to false claims. The high incidence of fraudulent claims is becoming a big concern for Health Insurers.
Business Figures For Last Five Years In India
Figures in Crores of Rupees.
YEARTotalHealth Growth % Market non-lifeInsuranceon HealthShare %
premiumpremiumInsurancein Health
Insurance
2008-09319416634–
2009-1038391833325.1921.70
2010-11469551113733.6523.71
2011-12581191318423.7722.68
2012-13690451534116.3622.22
Analysis of Health Insurance Premium of Different Insurance Companies of India during 2012-13
Data of Health Insurance Premium for different Insurance Companies of India for year 2012-13 is now available and the total figure has reached Rs. 15341 crores for the year ended March 31, 2013.
S.NoInsurerPremium% Share
1.Apollo Munich598.753.90
2.Bajaj allianz594.853.88
3.Bharti AXA195.491.27
4.Cholamandalam2871.87
5.Future Generali139.130.91
6.HDFC ERGO521.503.40
7.ICICI Lombard1665.1710.85
8.IFFCO TOKIO210.791.37
9.L&T26.370.17
10.Magma HDI0.000.00
11.Max Bupa206.421.35
12.National2372.2215.46
13.New India2757.7117.98
14.Oriental1491.949.73
15.Raheja QBE0.020.00
16.Reliance295.531.93
17.Religare Health38.390.25
18.Royal Sundaram209.231.36
19.SBI6.740.04
20.Shriram0.000.00
21.Star Health843.805.50
22.TATA-AIG181.871.19
23.United India2642.8117.23
24.Universal Sompo55.270.36
Grand Total15341100.00
% Market share
PSU’s vs Private Sector
Source : www.healthinsuranceindia.org
Data Source IRDA
On analysis of he data we find that % share of PSU companies is 60.39%. It is higher than overall market share
of PSU’s in Indian Insurance Market. This means that Health Insurance Premium is strengthening the premium figure of PSU’s.
Rs. Crores% Share
Public Sector9264.6860.39
Private Sector6076.3239.61
Grand Total15341100
Among the 5 top Insurance Companies we have 4 PSU’s and 1 Private Company. ICICI Lombard is at 4th position where else Oriental is behind it at 5th position. These 5 Insurance Companies have captured 71.25% market share. 19 Insurance Companies share 28.75. Out of there Magma HDI/Raheja QBE are yet to introduce their product.
Top 5 Insurance Companies are
CompanyRs. Crores % Share of total Health Insurance market
New India2757.7117.98
United2642.8117.23
National2372.2215.46
ICICI Lombard1665.1710.85
Oriental1491.949.73
Grand Total10929.8571.25
% Share of Various Companies Health Insurance Market 2012-2013
Source : www.healthinsuranceindia.org
Health Insurance Premium (Rs Crores) of Top 5 Insurance Companies during 2012-2013
Reduction in premium of Star Health during the year is due to loss of Tamilnadu Government as client during the year. Star Health premium which was over Rs. 1000 crores during last year has come down to Rs. 843 crores and the benefit has gone to United India which was successful in capturing the business
There are 18 companies out of 24 who are having market share of less than 5%
What is the learning from this study?
Is it worthwhile for players having less than 2% share to be in this complicated / complex business of Health Insurance. There are 14 Insurance Companies in this category which means 59% insurance of India are in this category and are having market share of less than 2%.
Should these companies focus on other portfolio? There are so many areas which are not being covered / insured. Health Care Equipment / Medical Equipment are one such area. Most of the companies have put this on decline list.
This is the world of specialization and market share. Let no one ignore it.
The Four Public Sector non-life companies which have a 70% share of Individual Health Policies (Public Sector procured over Rs.9265 crores , Private Insurers achieved Rs. 4,389 crores and Stand Alone Health Insurance Premium reached Rs.1687 crores -Gross Health Premium as on March 2013), have received IRDA approval to raise premium rates for individual health policies. Prices are set to rise by 20-30% depending on the age group of the insured.
The 4 Public Sector General Insurance Companies have designed their individual Health Insurance Schemes and other Health Products in line with the IRDA Health Regulations 2013 and obtained IRDA approval for the same . Some schemes have already been launched by the insurers, whilst others are following the lead.
The Health Insurance Regulations 2013 introduced regulations on renewability, portability, pre-existing diseases, cost of pre-insurance medical examination minimum entry age under Health Polices , Free look period, Penal Interest provision, Standardisation of definitions and documents with an idea that this Health Insurance Scheme should run efficiently for the benefit of the people of India, without any hassles and grievances.
Author-Dr. Abhijit Kar.
