A PROJECT REPORT

ON

HEALTH INSURANCE INDUSTRY IN INDIA AND

COMPARATIVE STUDY
Submitted by
PRIYANSHI AGGARWAL

Enrollment No. 1801357228

Batch: 2018-2021

TO
NAME: SHEETAL MAURYA
Assistant Professor
College of Vocational Studies

In the partial fulfillment of degree of

B.A (VOC)- Management and Marketing of Insurance

College of Vocational Studies

University of Delhi

November, 2020

1
 DECLARATION
I hereby declare that the project work entitled “Health Insurance
Industry in India and Comparative Study” submitted to College of
Vocational Studies, University of Delhi is the original work done by me
under the guidance of Ms. Sheetal Maurya, Assistant Professor and this
project work is submitted in the partial fulfillment of the requirement for
the award of the degree of B.A. (VS) Management and Marketing of
Insurance.

Priyanshi Aggarwal

2k18/MMI/45

Enrollment No.: 1801357228

B.A. (VS) Management and Marketing of Insurance

5th Semester, 3rd Year

2
 CERTIFICATE

This is to certify that the Project Report titled “Health Insurance

Industry in India and Comparative Study” is worked carried out
by Ms. Priyanshi Aggarwal , College of Vocational Studies,
University of Delhi.

She has worked under my guidance and direction. Her work is found
to be satisfactory and complete in all respect.

DATE SIGNATURE OF GUIDE

_______________ _______________
Ms. Sheetal Maurya

3
 ACKNOWLEDGMENT

The writing of this project has been one of the significant academic
challenges, I have faced and without the support, patience and guidance
of the people involved, this task would not have been completed. It is to
them I owe my deepest gratitude.
All praise to the almighty with whose auspicious blessings I have been
able to accomplish my research project report successfully. Equal credit
goes to my parents and teachers who made me what I am today by their
hard labor, devotion support & prayer.

I hereby take this opportunity to add a special note of thanks for

MS. SHEETAL MAURYA, ASSISSTANT PROFFESOR
who undertook to act as a mentor despite her many other academic and
professional commitments. Her wisdom, knowledge and commitment to
the highest standards inspired and motivated me.

My sincere thanks to all other who were associated with the project
directly or indirectly for providing me the excellent guidance during the
project.

4
 Table of Contents
Chapter Particulars Page no.
no.
1. INTRODUCTION 8
2. LITERATURE REVIEW
2.1 Literature Review 12
2.2 Selection of Health Insurance 12
2.3 Perception of Customers 14
3. OBJECTIVES OF STUDY AND RESEARCH
METHODOLOGY
3.1 Statement of Purpose 16
3.2 Objective of the Study 16
3.3 Research Methodology 16
3.4 Statistical Tool 17
4. HEALTH INSURANCE
4.1 Meaning of Health Insurance 19
4.2 Background of Health Insurance 20
4.3 Health Insurance Scenario in India 21
4.4 Advantages of Health Insurance 23
4.5 Main Important Features of Health Insurance 24
4.6 Main Functions of Health Insurance 25
4.7 Importance of Health Insurance 25
4.8 Main Important Types of Coverage of Mediclaim 26
4.9 Main Kinds of Health Insurance 27
4.10 Health Insurance Policy 29
4.11 How is Health Insurance Different from Mediclaim 32
Policy
5. HEALTH INSURANCE IN INDIA
5.1 About 37
5.2 Characteristics of Health Insurance System in India 37
5.3 Healthcare Insurance Awareness In India 38
5.4 The Need to Spread Health Insurance Awareness 39
5.5 Awareness Help to Booming Health Insurance in India 40
6. Regulatory Framework-IRDA
6.2 Rules by IRDA 48
6.3 Third Party Administration 49
6.4 Claim Management 53

5
7. INDIAN HEALTH INSURANCE MARKET
7.1 Indian Health Insurance Market 57
7.2 Investments in Indian Health Insurance Market 58
7.3 Government Initiatives 58
7.4 Road Ahead 59
7.5 How Covid-19 is Changing the Health Insurance Market in 60
India?
7.6 Growth Drivers 62
8. KEY PLAYERS
8.1 Health Insurance Companies in India 66
9. COMPARATIVE STUDY 74
10. DATA ANALYSIS AND FINDINGS 79
11. CONCLUSION AND RECOMMENDATION 96
ANNEXURE-I 100
ANNEXURE-II 102

6
 CHAPTER 1
INTRODUCTION

7
1.1 INTRODUCTION
How many accident you need to realize that you need Health Cover? It takes just one visit to a
hospital to make us realize how vulnerable we are, every passing second. For the rich as well as
poor, male as well as female and young as well as old, being diagnosed with an illness and
having the need to be hospitalized can be a tough ordeal. Heart problems, diabetes, stroke, renal
failure, cancer – the list of lifestyle diseases just seem to get longer and more common these
days. Thankfully there are more speciality hospitals and specialist doctors – but all that comes at
a cost. The superrich can afford such costs, but what about an average middle class person. For
an illness that requires hospitalization/ surgery, costs can easily run into five digit bills. A Health
insurance policy can cover such expenses to a large extent. Read why Health Insurance is more
important these days compared to Old days Health is a human right, which has also been
accepted in the constitution. Its accessibility and affordability has to be insured. While the well-
to-do segment of the population both in rural & urban areas have acceptability and affordability
towards medical care, at the same time cannot be said about the people who belong to poor
segment of the society.

It is well known that more than 75% of the population utilizes private sectors for medical care
unfortunately medical care becoming costlier day by day and it has become almost out of reach
of the poor people. Today there is need for injection of substantial resources in the health sectors
to ensure affordability of medical care to all. Health insurance is an important option, which
needs to be considered by the policy makers and planners. As mentioned earlier, the cost of
Health Insurance depends on the sum assured, age, current health condition and your previous
medical history. Higher the sum assured, higher the premium. So what is the ideal health
insurance cover requirement? There is no standard answer or thumb rule for this. If we agree that
health insurance is important, one has to look at his/ her own lifestyle, health condition, age/ life
stage, family history of illnesses and affordability. Most of the insurance companies limit the
sum assured to a maximum of 5 lakhs. Many health insurance policies ―provide additional
benefits such as daily allowance, ambulance charges, etc. for hospitalization. Not only are such
―benefits superfluous, they tend to drive the premiums higher. So it is best to avoid such plans
and stick to something basic and simple.

Health insurance is a form of group insurance, where individuals pay premiums or taxes in order
to help protect themselves from high or unexpected healthcare expenses. Health insurance works
by estimating the overall "risk" of healthcare expenses and developing a routine finance structure
(such as a monthly premium, or annual tax) that will ensure that money is available to pay for the
healthcare benefits specified in the insurance agreement. The healthcare benefit is administered
by a central organization, which is most often either a government agency, or a private or not-
for-profit entity operating a health plan.

The concept of health insurance was proposed in 1694 by Hugh the Elder Chamberlen from the
Peter Chamberlen family. In the late 19th century, "accident insurance" began to be available,

8
which operated much like modern 10 disability insurance. This payment model continued until
the start of the 20th century in some jurisdictions (like California), where all laws regulating
health insurance actually referred to disability insurance. Patients were expected to pay all other
health care costs out of their own pockets, under what is known as the fee-for-service business
model. During the middle to late 20th century, traditional disability insurance evolved into
modern health insurance programs.

Today, most comprehensive private health insurance programs cover the cost of routine,
preventive, and emergency health care procedures, and also most prescription drugs, but this was
not always the case. Insurance may be described as a social device to reduce or eliminate risk of
life and property. Under the plan of insurance, a large number of people associate themselves by
sharing risk, attached to individual insurance plan that exclusively covers healthcare costs and is
called Health Insurance. Since the past two decades, there has been a phenomenal surge in
acceleration of healthcare costs. This has compelled individuals to have a re-look on their actual
monthly expenditures, spending patterns and simultaneously allocate a proportion of their
income towards personal healthcare. This has resulted in individuals availing healthcare
insurance coverage not only for themselves but also for their family members including their
dependents. In short, healthcare insurance provides a cushion against medical emergencies.

The concept of insurance is closely concerned with security. Insurance acts as a shield against
risks and unforeseen circumstances. Some major health insurance companies in India include
National Insurance Company, New India Assurance, United India Insurance, ICICI Lombard,
Tata 11 AIG, Star Allied Health Insurance, HDFC standard life, Bajaj Allianz, Apollo, AG
Health Insurance Company among others.

India‘s fast growing demand for affordable health cover is attracting greater business attention,
with both life and non-life insurance companies now entering the market with innovative new
protection and savings medical insurance products. This intense competition for health insurance
customers has only intensified in recent months, with the introduction of new savings linked and
investment-oriented health insurance schemes by some of the country‘s largest insurance groups.
India‘s insurance sector first opened up to private and international investors in 2001.

Health insurance, in particular, has become as one of the country‘s fastest growing insurance
lines, accounting for almost a third of new written premiums last year. Sales of medical
insurance products have been driven by three key factors: a low penetration rate of about 5
percent at present, surging treatment costs, and a lack of other social safety options across most
of India. With total expenditure on healthcare, through both Indian government schemes and
private sector activity, expected to exceed US$200 billion by 2015, even more significant
opportunities for the country‘s health insurance sector will likely emerge.

When the policy expires, customers are entitled to receive the fund value. Normally this is not a
cashless process as payment is reimbursed on submission of medical bills. Most of these health

9
insurance plans sold by life insurance companies are unit-linked insurance products (Ulips),
whereby returns are determined by the performance of the stock market. While life insurer health
plans are tied to equity returns, medical insurance policies sold through non-life companies tend
to provide cashless hospitalization cover for policyholders in the event of an illness or accident.
These plans, with premiums reviewed and renewed annually, also offer customers a variety of
additional value-added benefits such as hospital cash allowance, home nursing allowance and
recovery grants.

Customer satisfaction levels for health insurance in India have consistently ranked below
comparable levels elsewhere, with critics frequently citing the low coverage of plans in terms of
both the diseases and number of hospitals covered. Unlike other homogenous general insurance
products, premiums for medical plans are based on the health of an individual policyholder and
this had led to confusion 14 and fraud in the Indian market and increased policy cancellations
from customers who do not find any value in their health insurance policies.

The industry is also becoming tech-savvy with facilities to buy certain types of insurance
products online and payment of premium through Internet. The insurance penetration level in
India is very low when compared with the global average. This has brought about a plethora of
distribution channels such as agents, brokers, (bank insurance model) avenues, soliciting
insurance through Internet or direct mailing. Many banks, financial institutions and insurance
intermediaries saw a huge opportunity in marketing insurance products.

Insurance brokers play a vital role in bringing together insurance companies and the insured, and
their role assumes importance when a claim arises. Research includes awareness of health
insurance, preference of health insurance consumption pattern, new services offered by insurance
sectors, claim settlement procedure, and major issues of health insurance. Health insurance
policy does not always cover every possible health problem someone might encounter in the
future. There are certain terms and conditions agreed to by the insured (person who is taking the
plan), and the insurer (entity that is providing the plan) and the entire procedure happens
according to what has been agreed to in the contract.

The best time to avail a health insurance plan is when the insured is still in a good physical
condition. The normal logic among young people is that since they are rarely afflicted by
physical ailments they do not need such a plan. In reality people can fall prey to a disease or
other physical problem at any time - nobody can be absolutely sure of a life fully free of such
issues. Normally as someone gets older the problems increase and the possibilities of some major
disease are always there. A problem with trying to get a medical insurance during old age is that
since there are more chances of a medical condition the premium is often high or the insurer is
not ready to cover the individual in question.

10
 CHAPTER 2
LITERATURE REVIEW

11
2.1 LITERATURE REVIEW
When a person experiences a bad shock to health, their medical expenses typically rise and their
contribution to household income and home production declines. According to the WHO,
―Each year, approximately 150 million people experience financial catastrophe, meaning they
are obliged to spend on health care more than 40% of the income available to them after meeting
their basic needs. Low income and high medical expenses can also lead to debt, sale of assets,
and removal of children from school, especially in poor nations. A short-term health shock can
thus contribute to long-term poverty. At the same time, because households often cannot borrow
easily, they may instead forego high-value care. When they do access care it will often be of low
quality, which can lead to poor health outcomes.

Theory suggests that health insurance can address some of these problems. By covering the cost
of care after a health shock, insurance can help to smooth consumption, reduce asset sales and
new debt, increase the quantity and quality of care sought, and can improve health outcomes.

Unfortunately, rigorous evidence on the impact of insurance is scarce, and there are even fewer
studies on the effects of insurance in developing countries. One reason for the lack of evidence is
that it is difficult to find a valid control group for the insured. We cannot simply compare the
outcomes of 19 insured and uninsured households, since health insurance status is typically
strongly correlated with other household characteristics. For example, rich and well educated
households typically have both better health and better health insurance coverage, but the
positive correlation between health and insurance status tells us nothing about the impact of
insurance. On the other hand, those in poor health may be more likely to pay for health insurance
but finding that the insured tend to be sicker would not imply that insurance causes illness.

Below we review past evidence on the impacts of health insurance, focusing on studies where
health insurance status is plausibly exogenous, or where studies have attempted to eliminate bias
due to self-selection. A majority of the rigorous studies are based on United States data.

2.2 SELECTION OF HEALTH INSURANCE

Understanding who chooses to purchase voluntary health insurance is important for
understanding both how well targeted the insurance product is and the financial viability of the
insurance program. As explained below, the latter will be particularly sensitive to the existence
of adverse versus positive selection. The extent of adverse selection or positive selection into
insurance has important repercussions for an insurance provider‘s ability to cover its costs.
Standard insurance theory predicts that insurance markets will suffer from adverse selection,
which occurs when less healthy people or people who are more risky with their health are more

12
willing to purchase health insurance because they know that the amount they spend on healthcare
will be larger than the premium they will pay. Voluntary health insurance cannot be financially
sustainable if adverse selection is severe, since only the most costly patients would find it
worthwhile to purchase insurance, and premium levels will not be able to cover the high costs of
care.

Some studies in wealthier nations find evidence that people with higher expected medical
expenditures (measured in a variety of ways across studies) are more likely to buy insurance or
pay for health insurance at higher premiums than those with lower expected medical
expenditures. However, the extent of adverse selection in health and other insurance is often
found to be minimal or non-existent. There is also some recent evidence of positive selection into
health insurance.

The literature review suggests that income is one of the important determinants of purchase of
health insurance. Relation of health insurance purchase decision and health expenditure is based
on the premise that families which have higher chances of requiring hospitalization will have
higher probability of buying health insurance.

Some other socio economic factors like age, education etc. have also been found to be important
factors affecting health insurance purchase In India knowledge and awareness about health
insurance could be important factor for health insurance purchase decision. Very few studies
have tried to analyze reasons for low penetration of health insurance in India.

Some studies have tried to analyze community based health insurance in India. Some individuals
face greater risk vulnerability than others due to their age, pre-existing health status, job profile
and marital status. For example, Hopkins and Kidd (1996) suggest that the probable distribution
of future health states is based on present and past Health status, Health care expenditure of the
household may be anther proxy of health status of the household this view of the role of
education in Health.

The implication is that not only is a better educated person likely to be healthier which would
lower the probability of insurance, but also he/she is likely to be better informed about both the
services available in the public hospital system and the benefits of joining a private health
insurance fund. The indirect effect of education is and the benefits of joining a private health
insurance fund its impact on income. Education and income are generally positively correlated.
Higher income generally decreases the opportunity cost associated with the purchase of private
health insurance.

Overall, increases in both income and education would be expected to lead to an increase in the
probability of buying the insurance. Another set of factors which are found important in the
literature of health insurance are demographic and economic variables. These variables are
employment, age, marital status and gender. The available evidence suggests that socioeconomic
variables act on choice in the expected ways. Those who are employed and those in executive

13
positions are likely to purchase insurance. Married respondents are more likely to take out
coverage, though family size apparently has been of little influence on the purchase decision.

2.3 PERCEPTION OF CUSTOMERS

The perception of individuals towards the risk is also an important factor. A consumer‘s
knowledge of being at risk by being a member of a particular group of people with high-risk
characteristics (e.g., those who know they have high cholesterol) likely to influence their
insurance decision. Hopkins and Kidd (1996) and Butler (1999) found that smokers are less
likely to purchase insurance. Smoking behavior is viewed in these studies as a proxy for risk-
aversion. Of the other possible determinants of the decision to purchase insurance, an obvious
factor is price. However few studies have attempted to estimate price elasticity of demand. This
is because of lack of price information and also because of limited variation in price in highly
regulated health insurance market. To overcome this problem Butler (1999) constructed
‗effective prices ‘from information on insurance fund premium revenue (averaged over policies
sold) and the expected benefits paid out by age category.

The studies in Indian context on health insurance are scanty. Several recent papers and reports
have critically reviewed the Indian health delivery and financing system (Bhat and Mavalankar
2000, Berman and Khan 1993, World Bank 1995, Planning Commission 1996, etc). These
studies have documented issues and challenges the system faces in terms of 24 accessibility,
efficiency and quality of the health care delivery.

14
 CHAPTER 3
OBJECTIVES OF STUDY
AND
RESEARCH
METHODOLOGY

15
3.1 STATEMENT OF PURPOSE
The purpose of this study is to find out the Awareness, Preferences and Buying patter of Health
Insurance, in four main Health Insurance companies. Health Insurance is viable solution to
ensure access to basic Health care services to the masses, the number of people with Health
Insurance coverage is low in India. There are some structural issues with system. The present
study is an attempt to find the cause for low Health Insurance coverage. The studies address the
awareness and buying pattern of Health Insurance and scope of the private Health Insurance
Company’s schemes. Given the growing interest on the importance of Health Insurance, the
outcome of the present study is considered useful in guiding policy making and to help to
knowing the complete process of Health Insurance.

3.2 OBJECTIVE OF THE STUDY

 To suggest the ways to aware people about Health Insurance. (SUGGEST)
 To know the preference of individual regarding health insurance.
 To assess the effectiveness of company services

3.3 RESEARCH METHODOLOGY

[Link] and [Link] in the Encyclopedia of Social Sciences define the research as “the
manipulation of things, concepts or symbols for the 27 purpose of generalizing to extend, correct
or verify knowledge, whether that knowledge aids in construction of theory or in the practice of
an art.” In short, the research for knowledge through objective and systematic method of finding
solution to a problem is research. The systematic approach concerning generalization and the
formulation of a theory is also research.

Research design provides the glue that the research project together. A designed is used to
structure the research to show how all of the major parts of the research project, the sample or
group measurement, treatments and methods of assignment work to gather try to central research
question.

Hence, it is clear that research design is the blueprint for researcher it lays down the
methodology involved in the collection of information and answering at meaningful conclusion
from the same.

This classification are made according to the objective of the research, in some causes the
research will fall in to one of this category but in other cases research will fall in to two
categories.

There are two types of methods of collecting data

16
1. PRIMARY DATA

2. SECONDARY DATA

PRIMARY DATA: The main purpose of collection of primary data was to prepared questionnaire.
The researcher tried to find out the awareness and Buying pattern of Health Insurance Through:

Personal Approach

 Surveys

 Mails

 Questionnaires

 Articles, magazines

 Telephone, discussion meeting with Managers, Agents of all the four Health Insurance
companies &customers etc. for this project personal interviews was conducted for collection

SECONDARY DATA consists of published data collected through

 Books

 Websites

 Newspapers

 Journals

 Magazines

 Research papers

3.3 THE STATISTICAL TOOL:

The statistical analysis has been done using Microsoft excel.

17
 CHAPTER 4
HEALTH INSURANCE

18
4.1 MEANING OF HEALTH INSURANCE
Health insurance is also known as MEDICAL INSURANCE. It is a type of insurance which
covers the cost of medical and surgical expenses of an insured person. Health insurance either
reimburses the expenses of treatment or directly pays to the care provider of the insured
individual. When you buy health insurance your insurance provider give you legal assurance to
offer financial help in case of any health issue. Health insurance promises to cover whole or a
part of the person’s medical expenses.

To be financially stable is everyone’s dream. However, with rising medical costs, treatment for
illnesses can easily eat into your savings. Arranging funds during a medical emergency can also
be a daunting task. A health insurance policy can protect you from the financial strain caused due
to a medical emergency. A health insurance plan plays an important role in providing financial
stability in case of medical emergencies. After all, with healthcare costs shooting up every single
day, it can be tough to meet treatment costs by shelling out money from your savings. It is an
effective way to protect your finances from huge expenses of medical treatment.

The health insurance market in India is very limited covering about 10% of the total population
Health insurance guarantees payments to a person in the event of sickness or injury. and works
as protection scheme. Health insurance is protection, scheme to take care of health of a person
and works it works by buying a policy from a company or an insurance agent. Depending on the
premium paid the health insurance policy will pay specified amounts for the medical expenses
incurred to overcome the health problem. Currently the trend of some of the reputable companies
seems to be to build in a health insurance policy as a benefit to an employee. Some countries
offers free health insurance to their citizen. In India certain sectors like railways, army and the
employees working with the central government are covered in a health scheme provided cover
to almost 20million people in different part of country.

Health like education should be essential and should be freely available to all the citizens of a
country. Some developed countries realizing the importance of the health of the nation spend as
much as 6% to 8% of their GDP on it and 32 have advanced facilities in their government run
hospitals. Some examples include the United Kingdom where the National Health Services
hospitals provide all the health requirements to majority of their citizens. Sweden and Norway
follow similar government run health schemes. As per the census of USA in the year 2004, it
was noted that 92.0 percent people had health insurance coverage; however 8.0 percent of people
lived without an insurance cover.

Developing countries like India have priority of spending in other sectors like the army and the
infrastructure development and barely 2% of the GDP is spent on the health and results in the
government hospitals lack in facilities especially for any advanced procedure such as heart
surgery or hip placement .Health insurance schemes are particularly important for individuals
from the lower income group to provide them and their family members with adequate cover in

19
event of any mishap or illness. The escalating medical costs are due to the advanced diagnostic
and therapeutic procedures that have become the hallmark of modern medical care.

An insurance scheme will guarantee that no compromises are made in your treatment for wants
of funds. Remember when negotiating a policy you ask for adequate cover as the provided by the
health insurance will depend on the type of policy purchased. Before you ask for the best health
insurance quote or plan to buy a health 33 insurance plan become an informed consumer. Find
definitions of commonly used health insurance terms in this health insurance glossary. It serves
as a dictionary to help consumers understand common terms used in health insurance.

“Health insurance aims that one can access to the best health care without
fearing the financial strain, it help people to have peace in mind rather than to
have fear”.

4.2 BACKGROUND OF HEALTH INSURANCE

Evolution of Health Insurance

The concept of Health Insurance was proposed in the year 1694 by Hugh the elder Chamberlen
from Peter Chamberlen family. In 19th Century “Accident Assurance” began to be available
which operated much like modern disability insurance. This payment model continued until the
start of 20th century. During the middle to late 20th century traditional disability insurance
evolved in to modern health insurance programs. Today, most comprehensive health insurance
programs cover the cost of routine, preventive and emergency health care procedures and also
most prescription drugs. But this is not always the case.

Over the last 50 years, India has achieved a lot in terms of health insurance. Before
independence, the health structure was in dismal condition i.e. high morbidity and high mortality
and prevalence of infectious diseases. Since independence, emphasis has been put on primary
health care and we made considerable progress in improving the health status of the country. But
still, India is way behind many fast developing countries such as China, Vietnam and Sri Lanka
in health indicators.

Health insurance, which remains highly underdeveloped and less significant segment of the
product portfolios, is now emerging as a tool to manage financial needs of people to seek health
services.

The new economic policy and liberalization process followed by Government of India since
1991 paved the way for privatization of insurance sector in the country. The Insurance
Regulatory and Development Authority (IRDA) bill, passed in Indian parliament, is the
important beginning of changes having significant implications for the health sector.

20
Health Insurance is more complex than other segments of insurance business because of serious
conflicts arising out of adverse selection, moral hazard, unavailability of data and information
gap problems. Health sector policy formulation, assessment and implementation are an
extremely complex task, especially, in changing epidemiological, institutional, technological and
political scenario. Proper understanding of Indian Health situation and application of principles
of insurance, keeping in view the social realities and national objectives, are important.

Though hospitals, dispensaries, public health centers and other medical facilities are present,
they are not sufficient to cater to the growing needs of India’s substantial population. Rural
access to quality medical service has to be improved. The inadequate manpower of doctors in
public sector hospitals is also a concern for health authorities. Furthermore, the infrastructure
required in the hospitals, like medicine, furniture and equipment are not adequate to serve the
population. Compounding the problem, government spending on healthcare services is not up to
the World Health Organization (WHO) norms of gross domestic product in healthcare.

Though the public sector is not expanding its healthcare services, private, co-operative and other
non-profit organizations have started hospitals and are providing medical services to the public.
Moreover, the Government of India is taking other steps to improve healthcare. For example, the
Government has, from time to time, appointed various committees to address the pervasive
problems in the healthcare sector. In addition, it has demonstrated a strong commitment to
population control, including the implementation of family planning programs geared towards
controlling the population.

4.3 HEALTH INSURANCE SCENARIO IN INDIA

Health is a human right. It’s accessibility and affordability has to be ensured. The escalating cost
of medical treatment is beyond the reach of common man. While well to do segment of the
population both in Rural and Urban areas have accessibility and affordability towards medical
care, the same cannot be said about the people who belong to the poor segment of the society.

Health care has always been a problem area for India, a nation with a large population and larger
percentage of this population living in urban slums and in rural area, below the poverty line. The
government and people have started exploring various health financing options to manage
problem arising out of increasing cost of care and changing epidemiological pattern of diseases.

The control of government expenditure to manage fiscal deficits in early 1990s has let to severe
resource constraints in the health sector. Under this situation, one of the ways for the government

21
to reduce under funding and augment the resources in the health sector was to encourage the
development of health insurance.

In the light of escalating health care costs, coupled with demand for health care services, lack of
easy access of people from low income group to quality health care, health insurance is emerging
as an alternative mechanism for financing health care. Indian health financing scene raises
number of challenges, which are:

• Increase in health care costs

• High financial burden on poor eroding their incomes

• Need for long term and nursing care for senior citizens because of increasing nuclear family
system

• Increasing burden of new diseases and health risks

• Due to underfunding of government health care, preventive and primary care and public health
functions have been neglected,

In the above scenario, exploring health financing options became critical. Naturally, health
insurance has emerged as one of the financing options to overcome some of the problems of our
system.

In simple terms, health insurance can be defined as a contract where an individual or group
purchases in advance health coverage by paying a fee called “premium”. Health insurance refers
to a wide variety of policies. These range from policies that cover the cost of doctors and
hospitals to those that meet a specific need, such as paying for long term care. Even disability
insurance, which replaces lost income if you cannot work because of illness or accident, is
considered health insurance, even though it is not specifically for medical expenses.

Health insurance is very well established in many countries, but in India it still remains an
untapped market. Less than 15% of India’s 1.1 billion people are covered through health
insurance. And most of it covers only government employees. At any given point of time, 40 to
50 million people are on medication for major sickness and share of public financing in total
health care is just about 1% of GDP. Over 80% of health financing is private financing, much of
which is out of pocket payments and not by any pre-payment schemes. Given the health
financing and demand scenario, health insurance has a wider scope in present day situation in
India. However, it requires careful and significant efforts to tap Indian health insurance market
with proper understanding and training.

Over the past 50 Years Indian has made considerable progress in improving its health status.
Death rate has reduced from 40 to 9 per thousand, infant mortality rate reduced from 161 to 71
per thousand live birth and life expectancy increased from 31 to 63 years. However, many

22
challenge remain and these are: life expectancy 4 years below world average, high incidence of
communicable diseases, increasing incidence of non- communicable diseases, neglect of
women‘s health, considerable regional variation and threat from environment degradation. It is
estimated that at any given point of time 40 to 50 million people are on medication for major
sickness in India. About 200 million workdays are lost annually due to sickness. Survey data
indicate that about 60% people use private health providers for outpatient while 60% use
government providers for in-door treatment. The average expenditure for care is 2-5 times more
in private sector than in public sector. 37 India spreads about 6 percent of GDP on Heath
expenditure. Health Care expenditure is 75 percent or 4.25 percent of GDP and most of the rest
(1.75percent) in government funding. At present, the insurance coverage is negligible.

Most of the public funding is for preventive, promote and primary care programs care
expenditure has grown at the rate of 12.84 percentage per annum and for each one present
increase in per capita income the private health care expenditure has increased by 1.47 percent
number of private doctors and private clinical facilities are also expanding exponentially. Indian
Health financing scene raises number of challenges, which are increasing health care cost, high
financial burden on poor eroding their incomes, increasing burden of new diseases and health
risks and neglect of preventive and primary care and public health function due to underfunding
of the government Health care.

4.4 ADVANTAGES OF HEALTH INSURANCE

Now days there are different insurance policies coming in the market like life insurance, vehicle
insurance, but the importance of health insurance seems to be growing at a very fast rate. Health
insurance is mainly taken to protect a person from any unexpected medical expenses incurred
due to any illness. With the present condition, it is observed that with the latest technologies or
the advancements taking place, the health care has immensely improved but so has the expenses.
The treatments are becoming more and more expensive with each passing day. It is required that
every individual gets a financial security related to any unexpected medical expenses coming his
way. The main merits observed in health insurance are;

1. Medical cash benefits- this benefit entitles you to get cash benefits, if you are hospitalized. All
the financial expenses incurred would be covered in this plan. The amount provided to you will
be on per day basis and the amount depends upon the plan you have opted.

2. Cashless facility- in this benefit, you can get hospitalized on the basis of this plan without
paying a penny. But this benefit can be availed only in some special cases. Sometimes the
amount paid by you, is reimbursed within 24 hours.

3. Before and after expenses- as per this policy all the expenses related to illness incurred 60
days prior to 90 days after hospitalization would come under the cash benefits that you can avail.

23
4. Floater benefits- this is an add-on benefit for the health insurance policy holders. In this
policy, an individual can take a single policy for the whole family which would cover the entire
member in a single sum assured.

5. Other benefits- the policy holder is entitled to a 5% of bonus amount of the sum assured every
year as a bonus. This policy includes, all the expenses including the ambulance charges, health
checkups to the maximum limit of Rs. 1000 per family. It even provides tax benefits as per
income tax act. Considering all the aspects, health insurance has advantages which could be
availed very easily. The health insurance is needed now more than ever due to skyrocketing
medical expenses, the increasing possibilities of diseases. So, if you still don‘t have a good
health care plan, just go for it at the earliest.

4.5 MAIN IMPORTANT FEATURES OF HEALTH INSURANCE

Though the features may vary from insurer to insurer, some basic features are:

1. Reimbursement for Hospitalization due to illness/disease/ surgery.

2. Reimbursement for Domiciliary Hospitalization expenses in lieu of Hospitalization.

3. Pre-hospitalization Expenses.

4. Post-hospitalization Expenses.

5. Ambulance Charges.

6. Cashless Access

7. Income Tax Benefit etc.

Insurance may be described as a social device to reduce or eliminate risk of life and property.
Under the plan of insurance, a large number of people associate themselves by sharing risk,
attached to individual insurance plan that exclusively covers healthcare costs and is called Health
Insurance. Since the past two decades, there has been a phenomenal surge in acceleration of
healthcare costs. This has compelled individuals to have a relook on their actual monthly
expenditures, spending patterns and simultaneously allocate a proportion of their income towards
personal healthcare. This has resulted in individuals availing healthcare insurance coverage not
only for themselves but also for their family members including their dependents. In short,
healthcare insurance provides a cushion against medical emergencies. The concept of Insurance
is closely concerned with security. Insurance acts as a shield against risks and unforeseen
circumstances.

24
4.6 MAIN FUNCTIONS OF HEALTH INSURANCE
The primary function of Health Insurance is to pay those covered expenses, as outlined in the
policy, incurred as a result of an accident or illness. It often has two elements, one being
hospitalization expenses and the other being for the medical care rendered by a physician or
other health care professional. The vast majority of health insurance is employer-based, meaning
that people have access to it through their employment. Not all employers offer it, and for those
whose employers do not, they are free to obtain individual/family policies on their own.

Health insurance comes in a variety of types. These include traditional indemnity plans, which
are becoming less common, and an array of managed care plans, including Health Maintenance
Organizations and Preferred Provider Organizations. Both of the latter provide medical care on a
prepaid basis, but differ in their delivery models, including by the degree of choice of provider
that the member retains.

Most health insurance plans have deductibles and co-payments, although different terminology
may be used. A deductible is an amount that the insured/member must pay before the insurer's
liability for payment is triggered. A co-payment is a form of cost-sharing such that the insurer
pays a percentage of a covered expense, and the insured pays the remainder. The size of the
deductible and co-payment has an impact on premium. Insurance may be described as a social
device to reduce or eliminate risk of life and property.

Under the plan of insurance, a large number of people associate themselves by sharing risk,
attached to individual insurance plan that exclusively covers healthcare costs and is called Health
Insurance Since the past two decades, there has been a phenomenal surge in acceleration of
healthcare costs. This has compelled individuals to have a re-look on their actual monthly
expenditures, spending patterns and simultaneously allocate a proportion of their income towards
personal healthcare. This has resulted in individuals availing healthcare insurance coverage not
only for themselves but also for their family members including their dependents. In short,
healthcare insurance provides a cushion against medical emergencies. The concept of Insurance
is closely concerned with security. Insurance acts as a shield against risks and unforeseen
circumstances. In general, by and large, Indians are traditionally risk averse rather than risk
lovers by Nature.

4.7 IMPORTANCE OF HEALTH INSURANCE

The importance of Health Insurance can never be undervalued for the following reasons:

• Provides security to human life which is of prime importance to any individual.

• Closely bonds Insurance Companies, Hospitals, Policyholders and TPAs together for the
benefit of Indian masses.

25
• An answer to the solution of uncertainties and risks those are prevalent and ever-pervading in
human life.

• Access to quality healthcare.

• Means of savings and a safe investment option.

• Provides financial stability in life.

• A tax-saving instrument that significantly contributes in reduction of tax deductions.

• Reduces tensions and stress caused on account of hospitalization.

• Greatly contributes in leading a stress-free life.

The health insurance schemes marketed by insurance companies face some other challenges
worth noting, for example :-Absence of accreditation of providers and a rationalized cost
structure.-Adverse claims experience / high loss ratio.-High moral hazard at various levels of
service.-Non regulated market and no control through state machinery.-The limited government
funding of healthcare programmers.-Lack of propagation of health insurance as a health
insurance among masses.-Rising medical costs and imbalance in cost structure among service
providers.-Servicing through third party administrators (TPA) introduced with cashless entry to
hospitals meeting with limited success.

4.8 MAIN IMPORTANT TYPES OF COVERAGE OF MEDICLAIM

A) HMO (Health Maintenance Organization).

You go to your family doctor for any health services. If there is urgency in going to a
specialist, your family care doctor will help you in referring one. Mediclaim companies will
not insure you without the referral from your family doctor and therefore, you will have to
pay yourself for such specialist services.

B) PPO (Preferred Provider Organization Plan).

Through this plan you can analysis to any primary, specialist, or medical facility without
referral and get totally covered. It is the Mediclaim companies that cover you when your
child breaks a bone accidentally and you approach directly to the orthopedic doctor, without
consulting your primary doctor.

C) POS (Point of Service).

This plan essentially includes both an HMO and a PPO plan. Mediclaim companies give you
the option from the two plans for every medical case. The plan offers extra covered

26
 preventative programs; however, you may have to pay more from your pocket, if you choose
a doctor outside your plan.

D) HSA (Health Savings Account).

This plan is much more superior than the above mentioned mediclaim plans. The plan covers
eyeglasses, dental, cosmetic procedures, over-the-counter medications, etc. It is a tax-
deferred savings account as long as withdrawals 48 are concern for medical expenses. Funds
outstanding at the end of the year are carried forward into an IRA account.

4.9 MAIN KINDS OF HEALTH INSURANCE

Individual
Health
Insurance
Policy

Floater
Tax Saver
Policy

Kinds of
Health
Insurance
Student Overseas
Medical Mediclaim
Policy Policy

Critical
Illness
Policy

Figure no.4.11 Health Insurance Types in India

1. Individual Mediclaim Policy

This is the plain vanilla mediclaim or health insurance policy for an individual protecting this
person from the expenses incurred due to disease or injury. Kinds of Health Insurance

27
Individual Health Insurance Policy Floater Policy Overseas Mediclaim policy Critical Illness
Policy Student medical policy Tax Saver

2. Floater Policy

A floater health insurance policy covers your entire family under one policy with one sum
insured and one premium. It covers all the expenses as covered under mediclaim only the
cover is now extended to the family instead of one person. This cover can be used by any
member of the family any number of times. The advantage of this policy is that saves money
by spreading the cover across family members 3. Critical Illness Policy Insurance companies
define certain specified illness or diseases as ―critical. If you have a critical illness policy,
then the insurance company will pay you a lump sum payment if you are diagnosed with a
critical illness as defined by the insurance company. Some of the diseases/conditions which
are usually deemed critical are Cancer ,Heart Attack, Kidney Failure, Major Organ
Transplant, Stroke, Paralysis and Heart Valve Replacement Surgery. (For a more
comprehensive list check with your insurer) Unlike other general insurance policies, these
policies come with multiple options in terms of sum assured and term of the policy. For
example ICICI Lombard provides critical cover for 5 years for a Rs. 12, 00,000 coverage.
These policies are also available with disability coverage to ensure that you are also covered
for loss of income during that critical period.

3. Overseas Mediclaim Policy

An Overseas Mediclaim Insurance policy provides cover for medical expenses incurred
abroad for treatment of illness and diseases contracted or injury sustained during the insured
period of overseas travel. Anyone who is travelling abroad for business or pleasure or for
educational purposes should have this policy.

4. Student Medical Insurance

Student Medical insurance covers the cost of health care while studying abroad. It is an
essential requirement of many foreign universities for its overseas students. Students are
generally advised to buy it in India as it is substantially cheaper than buying it abroad.

6. Tax Saver

This is a new class of insurance launched to take full advantage of the income tax benefit
under section 80 D of the Income Tax Act 1961. The premium is fixed at Rs 15,000 for all
plans. For Senior Citizens aged 65 and above, the premium is Rs. 20,000. This plans includes
reimbursement of OPD expenses upto Rs. 10,000. This includes diagnostics tests, dental
treatment and related expenses. This insurance is suitable for people who are looking to
cover all their medical expenses in a tax free manner.

28
4.10 HEALTH INSURANCE POLICY
What is Health Insurance Policy?
Health insurance plan is a contract between an insurer and the policyholder. The policyholder
pays a premium to the insurance company; in return the insurer pays for the medical expenses
incurred like hospitalization, day care, post and pre hospitalization etc. by the insured. The
policyholder might pay the bills first, and then get it reimbursed from the insurer. On the other
hand, if he/she opts for cashless service, the medical bills will be directly settled by the insurance
company with the hospital in case of hospitalization. The terms, however, might vary for
different insurers.

Importance of Health Insurance Policy:

 Savings

The best part about health insurance is it helps to keep your savings intact in case there is
a medical emergency. The insurer will take care of all the expenses such as
hospitalization, drugs/medicines, etc. A health insurance plan is a trusted way to ensure a
healthy and financially stable future.

 Security of Family’s health

Protecting the health of self and your family members or parents is necessary. You can
protect your family members by investing regularly in the family floater plan wherein
you can also get health cover for your parents. This type of health insurance ensures that
all types of medical treatments are covered.

 High Medical Costs

Due to the high healthcare services cost, you may not be able to afford treatment. But
when you have a health insurance cover, you can avail quality treatment at the best
network hospitals. Network hospitals are those wherein insurers have a tie-up with
hospitals that helps you get cashless treatment.

 Lifestyle changes

Our fast-paced lives have influenced our lifestyle choices. Work stress, indulgence in
junk food, smoking, environmental changes, etc., affect our overall health, and this could
lead to life-threatening diseases such as cancer, liver problem, kidney failure and so on.
In such situations, health insurance will cover the medical and surgical expenses incurred
during an illness.

29
Benefits of a Health Insurance Policy:

1. Financial Security

With the passing of time, the medical costs are rising and lifestyle-related diseases such as
diabetes, cancer, stroke, etc. are also surging. In such a case, having health insurance in the
present time is of utmost importance as it can financially protect you against the unavoidable
expenses. This way, your savings also remain protected.

2. Domiciliary treatment

Some health insurance companies provide cover for domiciliary treatment, wherein the treatment
for certain diseases is provided at home under medical supervision. Note that there is a limitation
on the amount and the number of days when availing insurance cover for domiciliary treatment.

3. Free health check-up

Health insurance understands that health is wealth; therefore, it needs consistent health
monitoring. As a policyholder, you are eligible for a free preventive health check-up after an
every 4 to 5 claim-free year. Some insurers also offer cashless treatments at their network
hospital.

4. Tax benefits

You can avail tax benefits under Section 80D of the Income Tax Act. As part of the law, you can
avail tax benefit for the expenses incurred on the preventive health check-up of parents above 60
years. Below is the table which shows the tax deductions for various health cover:

Scenario Tax Total Tax Exemption

exemptions

Individual and parents are Rs.25,00+ Rs.50,000

below 60 years Rs.25,000

Individual below 60 years and Rs.25,000+ Rs.75,000

parents above 60 years Rs.50,000

Individual and parents both are Rs.50,000+Rs. Rs.1,00,000

above 60 years 50,000

Table-4.10

30
Features of Health Insurance Policy
The most notable features of a modern health insurance plan are-

1. Coverage

Insurance plans offer comprehensive coverage for all expenses that can be occurred
during any health-related emergency. It includes hospitalization charges, post-
hospitalization charges, ambulance expenses all under a single policy. Critical illnesses
like cancer, kidney failure, and stroke are also covered for in a health insurance plan.

2. Renewal discounts

A No Claim Bonus is provided to the person insured in the following year if no claim has
been made against the policy in the previous year. This bonus can be in the form of a
high discount of the premium or the sum assured can be increased. Some insurers also
provide a free check-up if there is a good record of no-claim bonuses.

3. Co-payment

Co-payment is an option provided by most insurers that helps to decrease the yearly
premium. A percentage of the total expenses is paid by the insured while the insurance
company pays the balance.

4. Tax benefits

Among the lesser-known health insurance benefits, is that under section 80D of the
Income Tax Act, 1961, health insurance policies entitle you to receive tax benefits. The
premium paid for a health insurance policy is tax-deductible, both for your own policy or
for your family members.

5. Flexibility

An insurance plan provides high flexibility to the insured person. Insurance buyers can
reduce their premium after a certain period or can change their policy duration entirely.
Health insurance providers are also willing to also adjust the terms of your insurance plan
in accordance with a change in your lifestyle, like change in your marital status.

With health insurance, you can cast a safety net to protect you from financial troubles during a
medical emergency. It is a sound investment to secure your financial stability in the future.

31
ESSENTIAL GUIDELINES FOR AVAILING HEALTH INSURANCE
POLICY
The following points should be borne in mind while purchasing an individual health policy:

• Understanding the policy coverage:

The policyholder should be able to clearly comprehend the extent of medical coverage being
offered under the particular health insurance policy before opting for it. The individual should
check whether pre-existing diseases and its resultant complications are covered or not, as well as
the extent of the coverage under that particular policy.

• Keeping an eye for medical expenses that are not covered/re-imposable under the policy:

Before availing a particular health insurance policy, the prospective policyholder should note the
medical expenses not covered under that Insurance policy. It is important to note that deductibles
are a part and parcel of any insurance coverage and the expenses incurred as part of the medical
treatment need to be borne by the individual. Generally this list includes aprons, sterilization
charges, gloves, Dettol, gloves etc.

• To understand whether it is a co-insurance policy:

Before availing a health policy, the prospective customer should understand whether it is a
coinsurance policy or not. It is advisable to get an individual health insurance policy with a co-
insurance payment option. The maximum amount does not exceed 15% of the entire medical
coverage for a particular disease.

• Understanding and updating oneself about expiry period regarding the policy cover:

An individual health insurance cover entails regular premium payments on a monthly, half yearly
or annual basis before the expiry of a 52 particular policy. Non-payment of premium within the
stipulated time results in the lapsing of the policy with subsequent break in the policy coverage
of the concerned individual. Even though the concerned individual holds policy with an
Insurance company for many years together, a break in the policy coverage (Which generally
does not exceed more than 15 days is treated as fresh policy cover.

4.11 How is Health Insurance Different from Mediclaim Policy?

One of the most common mistakes a person believes is mediclaim and health insurance policies
are alike. It’s high time to address the issue, but before that let’s understand what health
insurance and mediclaim are.

32
Mediclaim policy is a type of health cover that offers coverage for expenses, incurred by a
person during a medical emergency, including domiciliary care and hospitalization expenses due
to illness, surgery or accident. The policy may offer two kinds of claim facility namely.

On the other hand, health insurance policy is a comprehensive health cover for emergency
medical and surgical expenses beyond basic hospitalization. The expenses can include
Ambulance costs, Pre and Post-hospitalization expenses, Daycare treatments, OPD expenses,
Critical Illnesses, and much more. Such policies too offer cashless claim facility and
reimbursement of expenses when the insured pays for medical bills from his/her pocket.

To summarize, a Mediclaim policy limits itself to just the hospital or nursing home dues whereas
General Health insurance is an all-inclusive insurance policy that can cover much more.

How Does Health Insurance Score Over Mediclaim Policies

Mediclaim policies are often very restrictive but can come in handy during emergencies like
hospitalization due to accidents or ailment. However, since health insurance offers 360-degree
coverage, most experts recommend having a Health insurance plan. Such plans are designed to
keep all the healthcare requirements of an individual in mind. It accommodates coverage from
the very start of any health issue. A health plan has many added benefits and features, some of
which are listed below.

 Pre-Hospitalization involving OPD care such as doctor consultations, diagnostic tests,

and pharmacy.
 Global Coverage for planned hospitalization with the option of cashless hospitalization
for specified illnesses from a medical facility abroad.
 Cover for alternative treatments such as Ayurveda and Homoeopathy (AYUSH).
 Annual Health Check-ups which every insured member can avail once.
 No claims bonus for policyholders who do not claim in a policy year. A 10% increase in
Sum-Insured for 5 years is offered with a maximum increase of 50% in 5 claim-free
years.
 Automatic Recharge of Sum Insured once it gets exhausted in a policy year so that one
never runs out of coverage. This is at no extra cost and technically the insured gets
double sum insured for the same premium.
 Daily hospital cash allowance involves additional coverage like food and hospital visits.
 Cover for surgery costs for organ transplants as an add-on, either in full or in partial
amounts.
 Lifelong renewability. Once enrolled an insured can stay covered for a lifetime as long as
they timely renew their policy every year.
 In-built maternity cover feature, with a waiting period of nine months, for both prenatal
and postnatal expenses. Some policies also extend coverage for newborns from birth up
to ninety days.
 Cost cover for ambulance and day-care treatments in which hospitalization is less than 24
hours

33
  Add-on covers with the choice to enhance/upgrade policy coverage by paying a very
small amount.
 Coverage for loss of income due to an accident.

Insurance suppositions can be different from one another. An insurance plan that works for one
family might not work for another. For this very purpose, there are a wide range of plans that can
be tailored to suit different people with different medical backgrounds.

Mediclaim V/S Health Insurance

A few main points of comparison between Health Insurance and Mediclaim policy:

Factors Mediclaim Health Insurance

Mediclaim is a type of insurance Health insurance is a type of insurance that

that covers only hospitalization- provides comprehensive coverage for medical
Basic Definition
related expenses for a specified costs and surgical expenses beyond basic
time limit hospitalization

Offers all-inclusive coverage for various

Offers cover for domiciliary expenses like Ambulance, Pre and Post-
care and hospitalization Hospitalization, Diagnostic Tests, Day Care
Coverage
expenses incurred due to an Treatments, OPD Expenses, Critical Illnesses,
accident, surgery or illness Maternity Expenses, Alternative Treatment,
etc.

Health plans provide add-on cover for various

Hospitalization does not offer
Add-on cover medical conditions like diabetes,
any add-on cover.
hypertension and also for maternity

Main characteristics of a
Benefits and advantages by general health
Mediclaim policy might vary
Features insurance plan remain the same over most
from one insurance provider to
health insurance providers
the other

The sum assured for medical expenses can go

The sum assured for
unto six crores, per year. The amount is based
Sum Assured hospitalization is restricted to
on factors like the age of the policyholder,
five lakhs only
city he/she lives in and members insured

Claims A Mediclaim policyholder has In some health insurance plans like critical
the right to file claims until the illness cover, the sum insured must be paid in

34
 total amount is completely lump sum and claims can be made only once
exhausted during the entire policy duration. For most of
the plans, claims can be made until the total
amount is completely exhausted.

To avail the benefits of health insurance

To avail the benefits of
plans, the insured person need not be actually
Cover for Mediclaim, it is necessary for
hospitalized. He/she can avail benefits like
Hospitalization the insured person to be actually
daycare, regular check-ups, pre-natal
hospitalized
expenses, etc.

With limited coverage,

mediclaim policies are not Health insurance policies are highly flexible
considered as flexible policies, as it gives policyholders the option to
Flexibility
but they are highly beneficial customize their plans like selecting the
when it comes to cover for preferred sum assured amount.
hospitalization

Table-4.11

Things that Separate Mediclaim from Health Insurance.

Mediclaim usually provides coverage against hospital bills, treatment expenses that occur during
accidents and a list of specific diseases. Typically, there are often three types of exclusions in a
Mediclaim insurance plan:

 Permanent (diseases that are not covered at all)

 Temporary (diseases that are covered after a specific time period is covered)
 Limited (diseases covered within the policy with a cap on the payout)

These days there are options also to have a mediclaim policy to suit senior citizens. The age for a
senior citizen to apply is between sixty-one to sixty-nine years. The premium for the Mediclaim
for senior citizens is usually high. Some policies also offer coverage for alternative medical
treatment methods.

35
 CHAPTER 5
HEALTH INSURANCE IN
INDIA

36
5.1 About
The escalating cost of medical treatment today is beyond the reach of a common man. In case of
a medical emergency, cost of hospital room rent, the doctor's fees, medicines and related health
services can work out to be a huge sum. In such times, health insurance provides the much
needed financial relief. An investment in health insurance scheme would be a judicious decision.
The health insurance scheme could either be a personal scheme or a group scheme sponsored by
an employer. Some of the existing health insurance schemes currently available are individual,
family, group insurance schemes, and senior citizens insurance schemes, long-term health care
and insurance cover for specific diseases.

Risk Rated and

offered by
Private
Commercial
Organisation

Health Insurance Non-Risk Rated and

Social
Plans Government Initiated

Community Community rated and

Based/Micro Normally managed by
Insurance Community/Groups

Table-5.1

5.2 CHARACTERISTICS OF HEALTH INSURANCE SYSTEM

IN INDIA
1. By and large, the system offers traditional indemnity, under which the insured first pay
the amount and then seek reimbursement. Under indemnity, all known diseases or health
conditions are excluded and therefore such policies typically have a large number of
exclusions. This also means that those most in need of insurance, i.e. the sick, get
excluded for any financial risk protection against the diseases they are suffering from.
2. It is a fee-for-service-based payment system. Such a system of payment is advantageous
for the provider since he bears no risk for the prices he can charge for services rendered

37
 by him. Combined with the asymmetry in information, such a system usually entails
increased costs.
3. Policies provide a ceiling of the assured sum. Such a system, and that too within a fee-
for- service payment system, results in short changing the insured as he gets less value
for money, as the provider and the insurer have no obligations to provide quality care
and/or over provide/over charge services so long as the amounts are within the assured
amount of the insurance policy.
4. The system is based on risk-rated premiums. This again puts the risk on the insured as the
premium is fixed in accordance with the health status and age. Under such a system,
women in the reproductive age group, the old, the poor and the ill get to pay higher
amounts and are discriminated against.
5. The system is voluntary, making it difficult to form viable risk pools for keeping
premiums low.

5.3 HEALTHCARE INSURANCE AWARENESS IN INDIA

Insurance may be described as a social device to reduce or eliminate risk of life and property.
Under the plan of insurance, a large number of people associate themselves by sharing risk,
attached to individual insurance plan that exclusively covers healthcare costs and is called Health
Insurance. Since the past two decades, there has been a phenomenal surge in acceleration of
healthcare costs. This has compelled individuals to have a relook on their actual monthly
expenditures, spending patterns and simultaneously allocate a proportion of their income towards
personal healthcare. This has resulted in individuals availing healthcare insurance coverage not
only for themselves but also for their family members including their dependents. In short,
healthcare insurance provides a cushion against medical emergencies. The concept of Insurance
is closely concerned with security. Insurance acts as a shield against risks and unforeseen
circumstances. In general, by and large, Indians are traditionally risk-averse rather than risk
lovers by nature. Categories Indian Health Insurance is primarily classified into 2 categories:

A) CASHLESS HOSPITALIZATION
Cashless hospitalization is a specialized service provided by an insurer wherein an
individual is not required to pay the hospitalization expenses at the time of discharge
from the concerned hospital. The settlement is done directly by the insurance company
(or insurer). However, prior approval is a must from the 68 TPA (Third Party
Administration) before availing the benefits under this option cashless hospitalization can
be of two types
• Planned hospitalization: This is a planned hospitalization wherein the insured is aware
of the hospitalization in advance. This duration period may vary from case to case.

38
 Examples include: FTND (Full Term Normal Delivery), Chemotherapy treatment for
carcinoma (cancer), for cataract surgery, tonsillectomy (removal of tonsils).
• Emergency hospitalization: It is a sudden hospitalization that may be either an
emergency or due to unforeseen circumstances. In short, hospitalization is not anticipated
in advance. Examples include RTA (Road Traffic Accident), myocardial infraction (heart
attack) acute appendicitis.

B) MEDICAL REIMBURSEMENT
Re-imbursement means to repay or to compensate. Thus, Medical Reimbursement means
to repay the products/services availed during hospitalization and more importantly after
the completion of the treatment. Under this procedure, the insured has to bear the entire
expenses incurred during hospitalization. After getting discharged from hospital, the
insured/policy holder can claim medical reimbursement. For availing benefits under this
option, the insured has to approach the concerned TPA under which he/she is covered, fill
the requisite form and satisfy all the requirements as mentioned. This includes
submission of TPA card, policy paper, discharge summary, prescriptions, diagnostic
laboratory reports, OPD treatment details etc. A sum is granted as reimbursement for
treatment expenses.
With the opening up of insurance sector for private participation, numerous players have
entered the healthcare segment, but inspite of the entry of private sector, penetration of
insurance coverage in India is abysmally low. Recently a legislature has been passed in
the Indian Parliament allowing 49% of FDI in insurance industry.

5.4 THE NEED TO SPREAD HEALTH INSURANCE

AWARENESS.
The condition of health insurance in India is not up to mark. 85% of Indian population does not
use health insurance to finance their medical expenditure. These people pay for their medical
expenditure from their pocket. As a result, many of these uninsured individuals either end up
with poor quality healthcare 70 or have to bear financial hardships. The financial stress that is
engendered due to rising medical expenses is believed to affect the lifestyle of all family
members for years. If the same continues, how will the people of India pay their medical
expenses in the future? How will the efforts of medical care providers be fruitful, when there will
be no one to avail medical treatment?

Thus, there is a need to increase the number of insured individuals in India. Working in this
direction, every individual, every medical care provider and every health insurance company
should play an active role. It is only then possible that people would be able to avail quality
healthcare in times of medical emergency. Insurers have designed plans, but people should be
encouraged to buy them so that the overall condition of medical care insurance in the country can

39
be improved. The products and offerings brought by different medical insurance providers vary
from each other. The only point that should be brought to light is that people should buy these
products to remove inconveniences from quality medical treatment. These products offer much
relief to them and their family members at the time of medical emergency. There is no need for
an insured individual to scramble for the arrangement of funds at the last hour. Hence, the
Government and all the associated bodies should all offer their support in spreading health
insurance awareness so that Indian citizens are aware of the right to seek quality healthcare
without any financial thought.

Health of its citizen is one of the top priorities of a nation. A nation with Healthy people would
be able to pursue its agenda with dexterity and execute those with fine see. Total Health care
boost economic growth, reduces poverty and 71 lowers mortality rate. The success of many
countries lies in their special effort to cover the entire population with a scheme of health
insurance that keep them protected against unforeseen health hazards through insurance coupled
with wellness program. The Health insurance converge is well established straightway. In India
as also in many other countries with low per capita, the burden of having to pay for unplanned
and expenditure for medical treatment is very acutely affecting large population. The total health
expenditure in India is around 5% of gross domestic products(GDP) in which bulk funding
comes from private household as mentioned above.

The Government should educate people about the rise of medical costs and the importance of
these products. Regulators should bring change in the guidelines, allowing only the right players
to enter the health insurance market. Health insurance providers should design products,
according to health needs of target customers and encourage people to buy them. The combined
efforts of all these bodies will surely bring some improvement.

5.5 AWARENESS HELP TO BOOMING HEALTH INSURANCE

IN INDIA
In the Indian non-life insurance industry, health insurance is the second largest segment. It has
picked up pace in previous fiscals, and is set to reach new heights in the coming few years as
public and private insurers are coming up with various schemes to cover the untapped insurance
market. As per our latest findings, the Indian health insurance industry is one of the most prolific
ones in the world. As the healthcare costs and awareness are rising in the country, we expect the
segment to grow with gross premiums scaling up at a CAGR of around 32.5% during 2010-11 to
2013-14. India‘s health insurance 72 landscape has undergone tremendous changes in the last
few years with the launch of several health insurance schemes, largely initiated by central and
state governments. We observed that a significant share of coverage has been achieved through
central and state government-sponsored health insurance schemes. Besides, private and public

40
health insurers have introduced a large number of plans and schemes to cover an individual and
his family against critical ailments like heart failure, stroke and kidney failure.

As a chunk of population in India is living with HIV/AIDS, the private health insurance
companies are cashing in on the big opportunity by designing special policies for such people.
India could soon see a national medical insurance policy for people living with HIV (PLHIV).
The National Aids Control Organization is planning to make insurance 'inclusive and universal
for PLHIV', we observed while studying and analyzing trends in the Indian health insurance
industry.

During the health insurance market analysis, researcher found that there are around 28 active
third party administrators (TPAs) in India, and the TPA infrastructure in the country has
witnessed a strong growth with the rising penetration of health insurance. The TPAs are
recognized as valuable service providers in the health insurance services delivery chain. Our
comprehensive report also identified that emergence and growth of health insurance have given
rise to a need for maintaining and optimizing claims processing and management. It aims at
enhancing services, offered by health insurance companies, for the maximum benefit of the
insured.

According to the study, health insurance portability is also gaining popularity in India as it
allows health insurance policyholders to switch companies while retaining their no-claims
benefit. The report also provides an overview of the rural health insurance segment, and expects
that the number of uninsured rural households will decrease with time. Various Insurance
Regulatory and Development Authority (IRDA) acts and amendments have also been studied to
understand the regulatory framework for the industry. The research also looks into profiles of
various players in public and private sectors to present the competitive landscape and a balanced
outlook of the Indian health insurance industry to clients.

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CHAPTER 6
REGULATORY
FRAMEWORK

42
 Insurance Regulatory and Development Authority
6.1 Guidelines on Standardization of General Terms and Clauses in
Health Insurance Policy Contracts
Standard General Terms and Clauses:

1) Disclosure of Information:
The policy shall be void and all premium paid thereon shall be forfeited to the Company in the
event of misrepresentation, misdescription or non-disclosure of any material fact by the
policyholder.

2) Condition Precedent to Admission of Liability:

The terms and conditions of the policy must be fulfilled by the insured person for the Company
to make any payment for claim(s) arising under the policy.

3) Claim Settlement (provision for Penal Interest):

a) The Company shall settle or reject a claim, as the case may be, within 30 days from the
date of receipt of last necessary document.
b) In the case of delay in the payment of a claim, the Company shall be liable to pay interest
to the policyholder from the date of receipt of last necessary document to the date of
payment of claim at a rate 2% above the bank rate.
c) However, where the circumstances of a claim warrant an investigation in the opinion of
the Company, it shall initiate and complete such investigation at the earliest, in any case
not later than 30 days from the date of receipt of last necessary document. In such cases,
the Company shall settle or reject the claim within 45 days from the date of receipt of last
necessary document.
d) In case of delay beyond stipulated 45 days, the Company shall be liable to pay interest to
the policyholder at a rate 2% above the bank rate from the date of receipt of last
necessary document to the date of payment of claim.

4) Complete Discharge
Any payment to the policyholder, insured person or his/ her nominees or his/ her legal
representative or assignee or to the Hospital, as the case may be, for any benefit under the
policy shall be a valid discharge towards payment of claim by the Company to the extent of
that amount for the particular claim.

5) Multiple Policies

a) In case of multiple policies taken by an insured person during a period from one or
more insurers to indemnify treatment costs, the insured person shall have the right to
require a settlement of his/her claim in terms of any of his/her policies. In all such cases

43
 the insurer chosen by the insured person shall be obliged to settle the claim as long as
the claim is within the limits of and according to the terms of the chosen policy.
b) Insured person having multiple policies shall also have the right to prefer claims under
this policy for the amounts disallowed under any other policy / policies even if the sum
insured is not exhausted. Then the insurer shall independently settle the claim subject to
the terms and conditions of this policy.
c) If the amount to be claimed exceeds the sum insured under a single policy, the insured
person shall have the right to choose insurer from whom he/she wants to claim the
balance amount.
d) Where an insured person has policies from more than one insurer to cover the same risk
on indemnity basis, the insured person shall only be indemnified the treatment costs in
accordance with the terms and conditions of the chosen policy.

6) Fraud
If any claim made by the insured person, is in any respect fraudulent, or if any false statement,
or declaration is made or used in support thereof, or if any fraudulent means or devices are used
by the insured person or anyone acting on his/her behalf to obtain any benefit under this policy,
all benefits under this policy and the premium paid shall be forfeited.

Any amount already paid against claims made under this policy but which are found fraudulent
later shall be repaid by all recipient(s)/policyholder(s), who have made that particular claim, who
shall be jointly and severally liable for such repayment to the insurer.

For the purpose of this clause, the expression “fraud” means any of the following acts committed
by the insured person or by his agent or the hospital/doctor/any other party acting on behalf of
the insured person, within tent to deceive the insurer or to induce the insurer to issue an
insurance policy:

a) The suggestion, as a fact of that which is not true and which the insured person does not
believe to be true.
b) The active concealment of a fact by the insured person having knowledge or belief of the
fact.
c) Any other act fitted to deceive and
d) Any such act or mission as the law specially declares to be fraudulent

The Company shall not repudiate the claim and / or forfeit the policy benefits on the ground of
Fraud, if the insured person / beneficiary can prove that the misstatement was true to the best of
his knowledge and there was no deliberate intention to suppress the fact or that such
misstatement of or suppression of material fact are within the knowledge of the insurer.

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7) Cancellation
a) The policyholder may cancel this policy by giving 15days’ written notice and in such an
event, the Company shall refund premium for the unexpired policy period as detailed
below.
Notwithstanding anything contained herein or otherwise, no refunds of premium shall be made in
respect of Cancellation where, any claim has been admitted or has been lodged or any benefit has
been availed by the insured person under the policy.

b) The Company may cancel the policy at any time on grounds of misrepresentation non-
disclosure of material facts, fraud by the insured person by giving 15 days’ written notice.
There would be no refund of premium on cancellation on grounds of misrepresentation,
non-disclosure of material facts or fraud.

8) Migration
The insured person will have the option to migrate the policy to other health insurance
products/plans offered by the company by applying for migration of the policy atleast 30 days
before the policy renewal date as per IRDAI guidelines on Migration. If such person is
presently covered and has been continuously covered without any lapses under any health
insurance product/plan offered by the company, the insured person will get the accrued
continuity benefits in waiting periods as per IRDAI guidelines on migration.

9) Portability
The insured person will have the option to port the policy to other insurers by applying to such
insurer to port the entire policy along with all the members of the family, if any, at least 45
days before, but not earlier than 60 days from the policy renewal date as per IRDAI guidelines
related to portability. If such person is presently covered and has been continuously covered
without any lapses under any health insurance policy with an Indian General/Health insurer, the
proposed insured person will get the accrued continuity benefits in waiting periods as per
IRDAI guidelines on portability.

10) Renewal of Policy

The policy shall ordinarily be renewable except on grounds of fraud, misrepresentation by the
insured person.

a) The Company shall endeavor to give notice for renewal. However, the Company is not
under obligation to give any notice for renewal.
b) Renewal shall not be denied on the ground that the insured person had made a claim or
claims in the preceding policy years.
c) Request for renewal along with requisite premium shall be received by the Company
before the end of the policy period.
d) At the end of the policy period, the policy shall terminate and can be renewed within the
Grace Period of decided days to maintain continuity of benefits with outbreak in policy.
Coverage is not available during the grace period.

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 e) No loading shall apply on renewals based on individual claims experience.

11) Withdrawal of Policy

a) In the likelihood of this product being withdrawn in future, the Company will intimate
the insured person about the same 90 days prior to expiry of the policy.
b) Insured Person will have the option to migrate to similar health insurance product
available with the Company at the time of renewal with all the accrued continuity
benefits such as cumulative bonus, waiver of waiting period. as per IRDAI guidelines,
provided the policy has been maintained without a break.

12) Moratorium Period

After completion of eight continuous years under the policy no look back to be applied. This
period of eight years is called as moratorium period. The moratorium would be applicable for
the sums insured of the first policy and subsequently completion of 8 continuous years would
be applicable from date of enhancement of sums insured only on the enhanced limits. After the
expiry of Moratorium Period no health insurance claim shall be contestable except for proven
fraud and permanent exclusions specified in the policy contract. The policies would however be
subject to all limits, sub limits, co-payments, deductibles as per the policy contract.

13) Premium Payment in Installments (Wherever applicable)

If the insured person has opted for Payment of Premium on an installment basis i.e. Half
Yearly, Quarterly or Monthly, as mentioned in the policy Schedule/Certificate of Insurance, the
following Conditions shall apply.
a) Grace Period of specified days would be given to pay the installment premium due for
the policy.
b) During such grace period, coverage will not be available from the due date of
installment premium till the date of receipt of premium by Company.
c) The insured person will get the accrued continuity benefit in respect of the “Waiting
Periods”, “Specific Waiting Periods” in the event of payment of premium within the
stipulated grace Period.
d) No interest will be charged If the installment premium is not paid on due date.
e) In case of installment premium due not received within the grace period, the policy will
get cancelled.
f) In the event of a claim, all subsequent premium installments shall immediately become
due and payable.
g) The company has the right to recover and deduct all the pending installments from the
claim amount due under the policy.

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14) Possibility of Revision of Terms of the Policy Including the Premium Rates

The Company, with prior approval of IRDAI, may revise or modify the terms of the policy
including the premium rates. The insured person shall be notified three months before the
changes are effected.

15) Free look period

The Free Look Period shall be applicable on new individual health insurance policies and not
on renewals or at the time of porting/migrating the policy.

The insured person shall be allowed free look period of fifteen days from date of receipt of the
policy document to review the terms and conditions of the policy, and to return the same if not
acceptable.

If the insured has not made any claim during the Free Look Period, the insured shall be entitled
to:

a) a refund of the premium paid less any expenses incurred by the Company on medical
examination of the insured person and the stamp duty charges or
b) where the risk has already commenced and the option of return of the policy is exercised
by the insured person, a deduction towards the proportionate risk premium for period of
cover or
c) Where only a part of the insurance coverage has commenced, such proportionate
premium commensurate with the insurance coverage during such period;

16) Redressal of Grievance

In case of any grievance the insured person may contact the company through
Website:
Toll free:
E-mail:
Fax:
Courier:
Insured person may also approach the grievance cell at any of the company’s branches with the
details of grievance
If Insured person is not satisfied with the redressal of grievance through one of the above
methods, insured person may contact the grievance officer.

If Insured person is not satisfied with the redressal of grievance through above methods, the
insured person may also approach the office of Insurance Ombudsman of the respective
area/region for redressal of grievance as per Insurance Ombudsman Rules 2017.

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17) Nomination:
The policyholder is required at the inception of the policy to make a nomination for the purpose
of payment of claims under the policy in the event of death of the policyholder. Any change of
nomination shall be communicated to the company in writing and such change shall be effective
only when an endorsement on the policy is made. In the event of death of the policyholder, the
Company will pay the nominee {as named in the Policy Schedule/Policy
Certificate/Endorsement (if any)} and in case there is no subsisting nominee, to the legal heirs or
legal representatives of the policyholder whose discharge shall be treated as full and final
discharge of its liability under the policy.

6.2 RULES BY IRDA

 All Health Insurance products henceforth would be renewable for lifetime, without any
renewal ceasing age.
 Grace period for renewal of Health Insurance would be 30 days, before which delay of
renewal could be condoned by the Insurance Company. Health Insurance policies from Life
Companies would have a minimum term of 4 years, whereas Non-Life companies could have
a maximum term of 3 years.
 Clear procedures specified for smooth migration of children from Floater plans proposed
by their Parents, into their own independent plans.
 Insurers would be required to have policy wordings of all their products mandatorily put up
on their website.
 Communication of Denial of Coverage, and Loading on fresh Health Insurance proposals
should be in writing.
 Separate Claims and Grievance Cell for Senior Citizens.
 Loading on Claims only when individual claims for 3 consecutive years exceed 500% of the
renewal premium.
 Health Insurance Customers with multiple insurance policies would have a choice to choose
which product he wants to use. Contribution would be effected between Insurance
companies, without involving the customer.
 Standard Definitions, Exclusions, and Forms (like Claim Forms) are expected to be
released by IRDA. Renewal Procedure (regarding maximum age, changes in coverage at later
ages, upgrading cover, loading charges) would have to be clearly detailed in the policy
wordings.
 Any change in Terms of the policy at the time of renewal need to be communicated with
the policy holder 3 months before the renewal date. Insurers are required to mandatorily
settle claims within 30 days of submission of complete documents.
 Insurance Companies cannot reject claims on technical grounds of delayed submission, if the
customer can provide valid reasons for the delay caused.

48
 Cashless Cards should be issued within 15 days of issue of the Health Insurance Policy.
No Fresh cards would be issued every year on renewal. The same cashless card would be
continued every year.
 Hospital Network would be the responsibility of the Insurance Company, and not the
TPA (which is the case currently) Insurance Companies would be required to make direct
agreements with Hospitals. These agreements could be tripartite with the TPA. In short,
Insurance Companies would administer the network and would be held responsible for issues
that arise in the network. (Since TPAs were originally brought in to primarily administer the
network of hospitals, their role after these regulations take effect, would be diluted
significantly.)
 Any Change of TPA in a policy should be informed to customer with 30days of such
change. All data should be seamlessly transferred to the new TPA, ensuring there is no hassle
caused to the customers.

6.3 THIRD PARTY ADMINISTRATION

A Third Party Administrator (TPA) is an organization which processes claims or provides
cashless facilities as a separate entity. Seen as an outsourcing of claim processing, TPA
processes claims for both retail and corporate policies. The risk of loss incurred remains with the
insurance company. The insurance company usually contracts a reinsurance company to share its
risk. An insurance company hires TPA to manage its claims processing, provider network and
utilization review. While some TPA operates as units of insurance companies, most are often
independent.

TPA is also involved in handling employee benefit plans such as processing retirement plans.
Handling healthcare or employee benefit claims requires using a specialized set of manpower
and technology, therefore hiring a TPA for the same is a more cost effective method. The
Insurance Regulatory and Development Authority of India (IRDA) defines TPA as a Third Party
Administrator who, for the time being, is licensed by the Authority, and is engaged, for a fee or
remuneration, in the agreement with an insurance company, for the provision of health services.
TPA was introduced by the IRDA in 2001.

Being one of the prominent players in the managed care industry, it has the expertise and
capability to administer all or a portion of the claims process. The services include claims
processing, premium collection, enrollment and cashless processing. Insurance companies setting
up its own health plan often outsource certain responsibilities to a TPA.

The TPA acts like a claims adjuster for the insurance company. In some cases the insurance
company sets up an entire department within their own company to act as TPA as opposed to
hiring a commercial TPA company.

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ROLE OF TPA IN HEALTH INSURANCE
Large numbers of the health insurance companies in India suffer losses and have been doing so
for years together. The group health insurance profile is what may cause optimum leakage to the
health insurance companies in India. TPA was introduced through the notification on TAP
Health Insurance regulation 2001 by the IRDA-their basic role is to function as intermediary
between the insurer and the insured and facilitate the cashless services of insurance .For this
service they are paid a fixed percent of insurance premium as commission. The commission is
currently fixed at 5.6 percent of premium. The introduction of TPAs is of great help and relief to
the insurance companies, which have been searching for ways and means to get their
management expenses in line with the specifications laid down by the IRDA. TPA is maintaining
a database of policy holders and issue identity cards with unique identification numbers to them.
They also handle all the policy- related issues, including claim settlements for the policy holders
Insurance companies (insurers) can now outsource their administrative activities, including
settlement of claims, to third party administrators, who offer such services for a cost. The
insurers remunerate the TPAs; hence, policyholders receive enhanced facilities at no extra cost.
Once the policy has been issued, all the records will be 81 passed on to the TPAs and all further
correspondence of the insured will be with the TPAs and not with the insurance companies.

The TPA's are expected to provide value-added services to the consumers, like arranging
ambulance services, medicines and supplies, guiding policy holders for specialized consultation,
and providing information about 24- hour help lines, health facilities, bed availability,
organization of lifestyle management and well- being programs.

In the middle of 2010, the public sector health insurance companies, namely United India, New
India, Oriental Insurance and moreover National Insurance took a tough stand and penalized
major hospitals where such procedure were taking place. They eliminated these hospitals from
the list from which cashless medical services can be availed by the customers. This caused a lot
of pain to the insured, however the industry woke up to the fact that insurance companies were
being taken for a ride. The 4 public sector health insurance companies then decided to float a
TPA of their own and even do away with the middlemen who were not falling in line. The move
has acquired big support even from the private health insurance companies. The issuer was not of
the public sector health insurance companies alone as well as certain private sector companies
have done away with the practice of TPAs as well as used to process claims through in-house
representatives. The TPA undoubtedly aims to give the health insurance industry the required
boost in India.

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THE SERVICES PROVIDED BY TPA ARE AS FOLLOWS
 ID card: TPA provides ID cards to all their policyholders in order to validate their identity at
the time of admission.
 The TPA's undertakes "Pre-authorization" before a surgical procedure to ease claim
processing.
 24 hours customer support services: The TPA provide assistance through their 24 hours
call center that provides information regarding policyholder's data, provider network, claim
status, benefits available with existing cardholder, etc.
 Cashless Hospitalization: Each policyholder is provided with a list of empanelled hospitals
where in he/she can avail cashless hospitalization.
 Claim Management: On behalf of the insurance companies TPA administers and settles
claims for hospitals and policyholders..

THE SPECIALIZED FUNCTIONS OF THE TPA INCLUDE:

 The TPA keeps and maintains all the records of medical insurance policies of an insurer.
 The TPA issues identity cards to all the policyholders. The policyholders will have to show
the identity cards to the hospital authorities before availing any services from the hospital.
 In case of a claim, policyholders will have to inform the TPA on a 24 hour toll free line
provided by them.
 After informing the TPA, the policyholder will be directed to a hospital where the TPA has a
tied up arrangement.
 TPA pays for the treatment; they issue an authorization letter to the hospital for the
admission of the policyholder in the hospital.
 At the point of discharge, all the bills will be sent to the TPA while they are tracking the case
of the insured at the hospital.
 TPA makes the payment to the hospital.
 TPA sends all the documents necessary for consideration of claims, along with the bills to the
insurance company.
 The insurance company then reimburses the TPA.

CONDITIONS DEFINED BY IRDA FOR TPA

Before IRDA allowed the TPA‘s to formally enter in to the insurance market there were
intermediaries who were acting on behalf of the corporate and playing very similar role of
present days TPA‘s. As regulation, 2001 IRDA, the following are the conditions, specified for
the TPA‘s. Figure shows the detail condition specified by IRDA by TPA‘s.

51
 Only a company with share capital 1crore of registered under the companies Act. 1956 can function as TPA.

An organization is desires to function as TPA shall license from the authority by make
in an application in writing in form TPA and accompanied with fees of RS 20000.

The Authority, on examination of the application and detailed furnished by the applicant, may
issue a license, if it satisfied that the applicant TPA is eligible to function as TPA.

Every TPA approved by the Authority shall pay a further Rs.30000(Rupees thirty
thousand only )to the authority as license fees before the license granted to it.

A copy of agreement entered in to between the TPA and insurance company or a

modification thereof, shall be filed, within 15 days of its execution and modification.

Every TPA shall appoint , with due intimation to the authority ,from among its directors
or senior employees, a chief Administrator officer (CAO) Chief executive officer(CEO) who
shall be responsible for the proper day to day administration activities of the TPA

Where the authority decides to issue a license to the applicant to act as TPA, it shall issue the same in the form TPA-2

Every License granted by the Authority to a TPA, shall remain in force for three years, unless the authority
decides, either to revoke or Cancel it earlier, as provided in these regulations. A license granted to a TPA may be
renewed for a further period of three years

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6.4 CLAIM MANAGEMENT
Health insurance claims management has evolved significantly in India over the past 10 years.
Since the introduction of Mediclaim in the mid-1980s till the advent of TPAs in 2002, claims
management focused primarily on reimbursement claims. With the advent of cashless
hospitalization, the entire claim process changed. New processes, such as prior authorization
became vital for providers and payers. Time, which was not a crucial element in processing
reimbursement claims earlier, all of a sudden became a vital parameter. Frequently the patient
was already admitted when an authorization request reached a TPA, this meant that a response
had to be given within 4-6 hours so the full treatment could commence. Authorization limit
enhancements were also sought as the treatment progressed or as the patient was ready for
discharge, they also required an urgent response.

The early claim systems were ad-hoc applications, frequently improvised upon to incorporate the
ever changing multitude of payers / providers requirements, customer expectations and health
insurance products. They were mostly reactive systems, supporting existing products and
practices and not designed to support future requirements. Thus a peculiar chicken and egg
scenario existed- how could an insurer introduce a new product when systems to service it did
not exist? A good claims management system must service existing products well while having
the in-built flexibility to support products with new and unique features, such as outpatient
coverage or products with a savings component. Increased flexibility to incorporate on-the-fly
modifications in benefits and processes, in-built intelligence to standardize routine processes and
rules based prompts and alerts are now available in newer claims system. 89 Not only do they
reduce manual intervention and improve process efficiencies, they can auto adjudicate and
process claims which meet all compliance parameters thus enabling claims staff to provide more
time for claims that require detailed analysis.

Health Cashless Insurance Claims Settlement

Cashless Hospitalization

Cashless hospitalization is service provided by an insurer wherein you are not required to settle
the hospitalization expenses at the time of discharge from hospital. The settlement is done
directly by the insurance company. However, prior approval is required from the TPA before the
patient is admitted into the hospital.

Types of Cashless Hospitalization

Cashless claims can be of two types:-

Planned: Where the insured is aware of the hospitalization 2-3 days in advance.

53
Emergency: Where the insured or any covered family member meets with sudden accident or
suffers from bout of illness that requires immediate hospitalization.

The Procedure of Planned / Emergency Hospitalization.

In case of planned hospitalization:

 Contact the toll free help-line number.

 Fax / submit the required documents. E.g. Doctor‘s certificate, etc.
 Obtain approval from the TPA.
 Obtain authorization for network / non-network hospitals.
 Avail health treatment.

In case of emergency Hospitalization

 Rush the patient to the hospital.

 Patient avails treatment.
 Family contacts toll free number provided by the insurer.
 Family submits required documents. E.g. Doctor‘s certificate, etc.
 Family obtains approval from the TPA
 Family obtains authorization for network / non-network hospitals.
 Hospital bills are directly settled by the TPA.

Non-cashless Claim or Claim Reimbursement: Filing Claim

A non-cashless claim is when you avail treatment in hospitals that do not form part of insurer‘s
network. In such cases, you have to pay the hospital bills and subsequently claim reimbursement
from the insurer.

The Procedure to be Followed in Case of Claim Reimbursement:-

 Call toll free number and provide hospitalization details.

 Settle the hospital bills directly.
 Submit the relevant bills / documents to the TPA.

Documents Required for Filing a Non-cashless Claim:

 Duly completed claim form.

 Xerox copy of the policy.
 Bills, receipts and discharge certificate/card from the hospital in originals.
 Bills from chemists supported by proper prescription.
 Receipt and pathological test reports from a pathologist.
 Medical practitioner / surgeon prescribing the test.

54
 Nature of operation performed and surgeon‘s bill and receipt.

The claims are serviced at both networks as well as non-network hospitals.

Not Covered Under Cashless and Non-cashless Hospitalization: How to Prevent Rejection
Claim.

 Read the list of coverage and exclusions in policy wordings (which comes to you with the
policy).
 Ensure that you declare all the pre-existing diseases at the time of enrolment.
 Do not claim for any hospitalization and diagnostic studies / investigation charges, which do
not confirm existence of an illness or injury that requires hospitalization.
 After filing the claim, make sure that maintain minutes of interaction with the insurer in
black and white.
 Understand the policy in detail. Be informed about the “Fine print”, exclusions and details
pertaining to depreciation and deductions.
 Do not hesitate to ask details of deductions or rejection.

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 CHAPTER 7
INDIAN HEALTH
INSURANCE MARKET

56
7.1 INDIAN HEALTH INSURANCE MARKET
India health insurance market is anticipated to register a robust CAGR of 29% during 2021-2025
owing to expanding middle-class population, growing awareness about benefits offered by a
health insurance plan, favorable government initiatives and growing expenditure on healthcare.
The insurance sector in India is regulated by the Insurance Regulatory and Development
Authority of India (IRDAI).

The introduction of health insurance schemes by Indian government, which includes personal
accident (PA) schemes like Pradhan Mantri Suraksha Bima Yojana (PMSBY), PA cover from
Indian Railway Catering and Tourism Corp (IRCTC) and so on, has resulted in increasing
penetration of health insurance market in India.

Health insurance is a type of insurance coverage that pays for medical, surgical, and sometimes
dental expenses of the insurance holder. It protects the insurance holder from unexpected, high
medical costs. Health insurance usually requires the covered policyholder to bear a portion of the
risk by paying initial medical costs up to an agreed-upon amount before the health insurance is
liable for payment. Health insurance market is booming in India with rising number of people
suffering from chronic diseases, increasing number of road accidents and encouragement from
both public and private sector companies. India health insurance market is segmented based on
claim type, type of insurance provider, insurance type, business type, different types of health
insurance plans, type of scheme, type of coverage, term of coverage, cash limit, mode of
purchase, end user and region. Based on type of insurance provider, the market is segmented into
public, private and standalone health insurers.

In 2019, private insurance providers accounted for the largest share in India health insurance
market. Private insurance providers offer quick referral to a consultant, provide advanced
treatment options, and have quick and flexible treatment time for users in private hospitals.
Based on insurance type, the market is segmented into disease and income protection. In 2019,
disease insurance type dominated the health insurance market and the segment is expected to
continue its dominance during the forecast period. However, income protection health insurance
segment is foreseen to grow at a faster pace through 2025.

Major players operating in India health insurance market include Star Health Insurance, ICICI
Lombard General Insurance Company, Religare Health Insurance Company Limited, HDFC
Ergo, Max Bupa Health Insurance, TATA-AIG General Insurance Company Limited, SBI
General Insurance, Universal Sompo Health Insurance, Edelweiss Health Insurance, Digi Health
Insurance, and others. The insurance providers operating in India are now increasingly focusing
on providing specialized health policies as well as on rural masses to increase the market share.

57
7.2 INVESTMENT IN INDIAN HEALTH INSURANCE MARKET
Hospitals and diagnostic centers attracted Foreign Direct Investment (FDI) worth Rs. 4.61 crore
between April 2000 and March 2020, according to the data released by Department for
Promotion of Industry and Internal Trade (DPIIT). Some of the recent investments in the Indian
healthcare industry are as follows:

 In May 2020, Jubilant Generics Ltd entered into a non-exclusive licensing agreement with
US-based Gilead Sciences Inc. to manufacture and sell the potential COVID-19 drug
Remdesivir in 127 countries, including India.
 In May 2020, Carlyle Group acquired 74% stake in animal health focused pharmaceutical
company, Sequent Scientific Ltd, for about Rs 1,580 crore.
 In April 2020, first COVID-19 sample collection mobile lab of the country, namely ‘Mobile
BSL-3 VRDL Lab’, was launched, which can process more than 1,000 samples in a day and
enhance country’s capabilities in fighting COVID-19.
 The value of merger and acquisition (M&A) deals across hospitals jumped by a record 155%
to Rs 7,615 crore in FY19.
 In August 2019, Microsoft India and Apollo Hospitals Group entered in agreement to set up a
National Clinical Coordination Committee for AI-powered Cardiovascular Disease Risk
Score API.
 In January 2019, National Company Law Tribunal (NCLT) approved Tri-County Premier
Hearing Services Inc’s planned to acquire Bhilai Scan and Research Pvt Ltd (BSR)
Diagnostics Ltd for Rs 67 crore.
 India and Cuba signed a memorandum of understanding (MoU) to increase cooperation in
the areas of health and medicine, according to Ministry of Health and Family Welfare,
Government of India.
 Fortis Healthcare approved the de-merger of its hospital business with Manipal Hospital
Enterprises. TPG and Dr Ranjan Pal could invest Rs 3,900 crore in Manipal Hospital
Enterprise.

7.3 GOVERNMENT INITIATIVES

Some of the major initiatives taken by the Government of India to promote Indian healthcare
industry are as follows:

 In Union Budget 2020-21, Rs 35,600 has been allocated for nutrition-related

programmes.
 The Government has announced Rs 69,000 crore outlays for the health sector that is
inclusive of Rs 6,400 crore for PMJAY in Union Budget 2020–21.
 The Government of India aims to increase healthcare spending to 3% of the Gross
Domestic Product (GDP) by 2022.

58
  In February 2019, the Government of India established a new All India Institute of
Medical Sciences (AIIMS) at Manethi, District Rewari, and Haryana at a cost of Rs 1,299
crore.
 The Union Cabinet approved setting up of National Nutrition Mission (NNM) with a
three-year budget of Rs 9,046 crore to monitor, supervise, fix targets and guide the
nutrition related interventions across ministries.
 On September 23, 2018, Government of India launched Pradhan Mantri Jan Arogya
Yojana (PMJAY), to provide health insurance worth Rs 500,000 to over 100 million
families every year.
 In August 2018, the Government of India approved Ayushman Bharat-National Health
Protection Mission as a centrally sponsored scheme contributed by both center and state
Government at a ratio of 60:40 for all States, 90:10 for hilly Northeastern States and
60:40 for Union Territories with legislature. The center will contribute 100% for Union
Territories without legislature.
 The Government of India launched Mission Indradhanush with an aim of improving
coverage of immunization in the country. It aimed to achieve atleast 90% immunisation
coverage by December 2018 and cover unvaccinated and partially vaccinated children in
rural and urban areas of India.

7.4 Road Ahead

India is a land full of opportunities for players in the medical devices industry. The country has
also become one of the leading destinations for high-end diagnostic services with tremendous
capital investment for advanced diagnostic facilities, thus catering to a greater proportion of
population. Besides, Indian medical service consumers have become more conscious towards
their healthcare upkeep.

Indian healthcare sector is much diversified and is full of opportunities in every segment, which
includes providers, payers, and medical technology. With the increase in the competition,
businesses are looking to explore for the latest dynamics and trends which will have positive
impact on their business. The hospital industry in India is forecast to increase to Rs 8.6 trillion by
FY22 from Rs 4 trillion in FY17 at a CAGR of 16–17%.

The Government of India is planning to increase public health spending to 2.5% of the country's
GDP by 2025.

India's competitive advantage also lies in the increased success rate of Indian companies in
getting Abbreviated New Drug Application (ANDA) approvals. India also offers vast
opportunities in R&D as well as medical tourism. To sum up, there are vast opportunities for
investment in healthcare infrastructure in both urban and rural India.

59
7.5 HOW COVID-19 IS CHANGING THE HEALTH INSURANCE
MARKET IN INDIA

Last five months have been transformational for our country, including our people and
businesses. Today, India is among the top three countries worst hit by the Coronavirus pandemic.
For the healthcare ecosystem, the pandemic has left its mark on almost all industries and sectors
across the spectrum, including health insurance. While the pandemic is still showing no signs of
abatement, we are now able to forecast its impact the health insurance industry in the near and
mid-term future with enough cues from the past quarter’s data.

Positive Changes that the Health Insurance Industry has seen over the Last
Few Months.

Firstly, there has been a promising 30-40% uptake in health insurance adoption across industry
players, with certain players seeing a significant jump more than others. It is obvious that this
surge will play out extremely well for providers with a robust digital distribution process and
convenient access.

Secondly, the industry has witnessed a massive shift towards digitalization. Not only has the
need for digital distribution strategies become significant, the nature of services has also
triggered the need for a reliance on digital processes across the spectrum: whether they are
underwriting processes or processes related to issuing policies or filing claims.

Then there has been a clear change in the customer mindset. The pandemic has driven a sudden
realization around the significance of protective investments, especially when it comes to the
aspects of health and life security. Health insurance has definitely taken the front seat when it
comes to return-based instruments, both from the perspective of securing access to quality
healthcare as well as investing in healthcare finances. This could over time lead to health
insurance transforming from a traditionally “push” product to a “pull” one.

The full picture is not altogether rosy, however. The health insurance industry is simultaneously
grappling with many challenges as well as uncertainties that are directly borne out of the
pandemic.

Firstly, there is the obvious and disconcerting uncertainty around treatment expenses for Covid-
19. With significantly higher claim costs than those generally associated with infectious illnesses
and epidemics, the Coronavirus pandemic is an actual nightmare in many respects. Most insurers
are still scrambling to accurately predict the impact on healthcare expenses and consequently the
claims book.

Additionally, the industry is grappling with a somewhat confusing claims experience in many
cases. There is in fact a visibly high degree of dissonance at the time of claims, which impacts
the customer in a rather unpleasant manner. Although the insurance regulator has been proactive

60
in ensuring there are no unnecessary hassles at the claims stage, there have been factors that had
a significant impact on the experience.

For example, usually non-payable items in insurance such as PPE kits, gloves, disinfectants now
form a significant part of any treatment protocol for Covid-19. Further, there exists significant
variance in treatment protocols and a lack of consensus in relation to standardization of costs and
expenses between the insurer and the hospital providers. Not to mention, the significant cost
variances based on severity of impact or availability of medicines have made the entire claims
process unpredictable in certain cases.

Expected Changes in the Coming Months and Years

Everyone in the health insurance industry will readily vouch for how drastic the influence of
Covid-19 has been on their businesses and lives. A full-scale transformation is indeed underway
and of course the digitalization of the customer journey will be a critical component in this
transformation.

First up, we will see a fast-growing trend of innovatively designed health insurance products. In
fact, product design has been a key barrier to true digitalization for the longest time. Most
insurance providers have been trying to adapt their digital processes to a product that is based on
an offline distribution model.

Complicated product features, complicated risk mitigation conditions, multiple and confusing
product variants have all contributed to products that do not really motivate purchases. With
consumers coming around to purchase health insurance digitally, the need for user-friendly
digital products has never been greater.

Secondly, we will see a growing acknowledgement of the need to simplify policy

documentation. Simplified and uncomplicated policy benefits will need to be accompanied by
terminologies and product documentation which are precise as well as easy to understand. This
will play a significant role in establishing trust and a truly digital experience; not to mention, a
greater access for people across economic and educational backgrounds.

Thirdly, we will see the emergence of a complete digital ecosystem for claims processing and
policy management. Be it automated claim adjudication that can significantly improve decision-
making times, or better digital controls at the provider and insurer’s end, customers are looking
to significantly faster claim settlements which require minimal manual processing.

Fourth, we will also see the emergence of a user-centric digital distribution channel. The primary
factor here will be how convenient and easy it is to buy an insurance policy online. With existing
insurers focusing on digital distribution models, the emergence of specialists such as Acko and
Godigit, along with the entry of next-gen digital healthcare financing distribution companies like
Vital, Plum, Onsurity, Toffee, Kenko, Riskcovry etc. that are looking at offering customer
experiences that go beyond plain vanilla insurance plans, things sure seem to be getting exciting

61
in this space. These new companies are focusing on user experiences with not only the insurance
product but also other wellness needs.

Of course what remains to be seen, is just how long will the pandemic and its impact last, and
will it truly transform the way industry functions for the better. Customer attention spans are
short, and one needs to be quick to capitalise on them. Will the insurance companies and
distribution partners be able to capitalise on this opportunity, and ensure adequate retention of
existing digital adopters while also driving a permanent change in customer buying patterns –
remains to be seen.

7.6 GROWTH DRIVERS IN HEALTH INSURANCE MARKET IN

INDIA
India’s healthcare industry has, is, and continues to grow by leaps and bounds, and it’s easy to
see why this is the case. After all, the country is known for sporting accessible and affordable
healthcare services, which is the primary reason why people from all over the world – especially
in places like the US where healthcare is incredibly expensive – prefer to carry out their medical
operations in India. India is expected to rank amongst the top three markets in the world in terms
of incremental growth by 2020.

Factors that are contributing to the Growth of the Healthcare

 Increasing awareness when it comes to lifestyle diseases
In the simplest terms, lifestyle diseases refer to ailments that affect the day-to-day life of a
person. The prevalence of lifestyle diseases can be seen all around us – in fact, its highly
probable that you have a person at home who suffers from diabetes, thyroid, hypertension, stress,
obesity, or anything else along the same lines.
 Rising disposable income and healthcare expenditure
Income levels have been on the rise over a continuous period, making it quite evident that the
average healthcare expenditure of a person would also increase as a result. This can be seen in
the increased demand for healthcare services that are more reliable and sport a higher level of
quality to boot. While the statement applies to the metro areas of India, this increased demand
can especially be seen in Tier II and Tier III cities.
 Greater prevalence of healthcare insurance among the masses
The penetration of healthcare insurance has reached a head in the 21st century, with more and
more people realizing the importance that this form of insurance will hold in their lives. After all,
healthcare expenditure is no joke, making it the need of the hour to ensure that any medical
expenses can be accounted for through insurance. This can be seen in the fact that the number of
medically-insured Indians is continuously rising over the years, reaching a number close to 500
million by FY 2018. With greater awareness when it comes to the benefits of medical insurance,

62
it’s evident that the healthcare industry will directly benefit as a result of higher penetration of
healthcare insurance amongst the masses.
 Higher levels of healthcare financing and support
The sheer level of support that the Indian government has provided to the healthcare industry is
nothing short of amazing. To put this statement into context, here are a few of the many
initiatives that the healthcare industry has taken to promote the Indian healthcare industry:
 Launching the Pradhan Mantri Jan Arogya Yojana (PMJAY) on September 23, 2018, to
provide health insurance worth Rs. 5,00,000 to over 100 million families every year.
 Approving the Ayushman Bharat-National Health Protection Mission as a centrally-
sponsored scheme contributed by both center and state government.
 Launching Mission Indradhanush to improve immunisation coverage to at least 90%
across the country by December 2018.
This, coupled with rising levels of FDI and investment by private sector players, will go a long
way in ensuring that little to no problems come in the way of the healthcare industry growing at a
massive rate.

 Medical Equipment and supplies

The medical equipment and supplies industry is in direct correlation with the rise of healthcare.
As hospitals increase their scope of activities, the need for quality and cost competitive
equipment and supplies in the country will increase. This is expected to encourage private
players to service domestic demand. However, till regulatory guidance for the segment is not
finalized and implemented, the growth of the industry is expected to be moderate, though beating
some prior industry estimates. The Indian Medical Device industry is currently valued at around
USD 3.5 billion and is expected to grow at a CAGR of 15% and touch the USD 5 billion mark in
coming years.

 Medical tourism
Medical Tourism has seen enhanced interest from both the government and private sector. With
increasing number of medical tourists all around the world, and a significant portion coming to
India for treatments, the medical tourism industry is poised for growth. However, medical
tourism is highly dependent upon the regulations at the home country of the tourist as well as the
economic conditions. Considering the above, the medical tourism will still make an impact on
the healthcare services market of India.

63
 Hospital Business
The hospitals business would continue to contribute to more than 70 percent of the healthcare
sector, with the private and public sector combined contributing about USD 54.5 billion. While
the government will step up its investment in the sector as planned, the private sector will foray
into the hitherto largely ignored sector. With increasing confidence and understanding of the
industry, investor interest will spur many private players to increase their scope of operations.

 Diagnostic and Pathology Industry

The diagnostic and pathology industry boosted by catering to rising medical needs of the country
and gaining momentum through growing acceptance of preventive cures will inch towards a
more mature market setup over the years. The diagnostic and pathology services industry is
expected to continue its consolidation. With increasing investor interest, this sector is expected to
touch USD 2.5 billion.

India’s healthcare industry is making waves all over the world due to the sheer scale and growth
of this sector. Many factors have contributed to the immense growth of this sector. The
emergence of lifestyle diseases, rising healthcare expenditure, a higher proportion of healthcare
insurance applicants, and support in terms of healthcare financing are just a few of the many
factors mentioned above. Thus, the demand for new-age professionals in this sector will reach a
substantially high level, and one such institute that is helping meet this increased demand
is ICRI. Their MBA in Healthcare and Hospital Management course is going a long way in
ensuring that the industry can meet their employment demands with the greatest of ease.

64
CHAPTER 8
KEY PLAYERS

65
8.1 Health Insurance Companies in India

 HDFC ERGO GENERAL INSURANCE

COMPANY:

HDFC ERGO is a 51:49 joint venture firm

between HDFC and ERGO International AG, one of the
insurance entities of the Munich Re Group
in Germany operating in the insurance field under
the BFSI sector. The company offers products in the retail,
corporate and rural sectors. The retail sector products are
health, motor, travel, home, personal accident, and cyber
security policy. Corporate products include liability, marine,
and property insurance. Rural sector caters the farmers with crop insurance and cattle
insurance.

The Company is ISO certified since 2010 and has its corporate office in Mumbai. The
company conducts the HDFC ERGO Insurance Awareness Award Junior Quiz, to educate
and spread insurance awareness among school students. Apart from its products mentioned
above, HDFC also provides Title insurance, Solar Energy Shortfall insurance, and Inherent
Defects insurance.
Highlights of HDFC ERGO

Number of Network Hospitals 4500+

Claim Settlement Ratio 62.47%

Portability Available

Renewability of the Policy Lifetime

Additional Rider Benefits Available Available

Discounts and Rebates Available

Waiting Period 3 Years

Solvency Ratio 1.58

66
 STAR HEALTH & ALLIED
INSURANCE COMPANY
LIMITED:

Star Health & Allied Insurance Co

Ltd commenced operations in 2006 as India's first
standalone health insurance provider; the company
has been providing services in health, personal accident and overseas travel insurance. Star
Health Insurance has products to cater everybody, be it individuals, families or corporates
and works directly as well as through various channels like agents, brokers, online etc., Star
Health is also prominently into Banc assurance having long standing relationship with
various banks. Star Health has underwritten a gross written premium of Rs.5401 Cr during
the FY 2018-19 and has built up a promising path with an appreciable net worth of Rs.1480
Cr, as on 31 March 2019. Currently Star Health has 10600+ employees and 550+ branch
offices all over India.

Highlights of STAR HEALTH & ALLIED INSURANCE

Headquarters Chennai

Incurred Claim Ratio 63%

Cashless Hospitals 9900+

Solvency Ratio 1.61

67
  MAX BUPA HEALTH
INUSRANCE COMPANY:

Max Bupa Health Insurance Company

Limited is an Indian health insurance company,
founded in 2008. Max Bupa Health Insurance
Company is a joint venture between Max India
Limited and Bupa Group. The company has smart top-up options to boost your coverage.
With 4000 Max Bupa network hospitals, you can avail the offer of cashless treatment. Max
Bupa has an incurred claim ratio of 54%. It is headquartered in New Delhi, India. It started as
a joint venture between Max India Limited and Bupa, a British healthcare provisioning and
multi-insurance company.[1][2] In 2019, Max India sold its entire stake to a private equity
firm, True North. The company has a paid-up capital of ₹926 crore (US$130 million). The
company is regulated by the Insurance Regulatory and Development Authority of
India (IRDAI).

Max Bupa Health Insurance Company Limited was headed by Ashish Mehrotra until April
2020. In May 2020, Mr. Krishnan Ramachandran was appointed as the MD and CEO of the
company and Mr. C.B. Bhave was appointed as the Chairman of the board.

Highlights of MAX BUPA

Headquarters New Delhi

Incurred Claim Ratio 54%

Cashless Hospitals 5000+

Solvency Ratio 1.81

68
  NEW INDIA
ASSURANCE COMPANY
LIMITED:
The New India Assurance Co. Ltd., based
in Mumbai, Maharashtra is a public
sector general insurance company of India. "It
is the largest general insurance company
of India on the basis of gross premium collection inclusive of foreign operations". It was founded
by Sir Dorabji Tata in 1919, and was nationalized in 1973.
Previously, it was a subsidiary of the General Insurance Corporation of India (GIC). But when
GIC became a re-insurance company following the passage of the IRDA Act 1999, its four
primary insurance subsidiaries. New India Assurance, United India Insurance, Oriental
Insurance and National Insurance became autonomous.
New India Assurance operates both in India and in foreign countries that include Japan and New
Zealand. More recently, it has collaborated with some of the leading public sector banks of India
and Financial Institutions to increase its distribution network.

Highlights of THE NEW INDIA ASSURANCE

Headquarters Mumbai

Incurred Claim Ratio 103.74%

Cashless Hospitals 7000+

Solvency Ratio 2.39

69
 ICICI LOMBARD GENERAL INSURANCE COMPANY

LIMITED
ICICI Lombard General Insurance
Company Limited is the largest
private-sector non-life insurer in India
based on gross direct premium income in fiscal 2018. The company offers a comprehensive
and well-diversified range of products including motor insurance health insurance personal
accident insurance crop insurance fire insurance marine insurance and engineering and
liability insurance through multiple distribution channels. The key distribution channels of
the company include direct sales individual agents bank partners other corporate agents
brokers and online through which the company service its individual corporate and
government customers. The company was established as a joint venture between ICICI Bank
- India's largest private sector bank in terms of consolidated total assets.

The Company was incorporated on October 30 2000 as ICICI Lombard General Insurance
Company Limited a public limited company. The Company obtained the certificate of
commencement of business on January 11 2001 from the Registrar of Companies Mumbai. It
is registered with IRDAI for carrying out the Class of Business pursuant to the registration
certificate dated August 3 2001.

Highlights of ICICI LOMBARD

Headquarters Mumbai

Incurred Claim Ratio 78.32%

Cashless Hospitals 6500+

Solvency Ratio 2.18

70
OTHE HEALTH INSURANCE COMPANIES IN INDIA

Health Insurance Companies Claim Settlement Ratio

Acko General Insurance Ltd. 86.98%

Aditya Birla Health Insurance Co. Ltd. 73.37%

Bajaj Allianz General Insurance Co. Ltd. 93.68%

Bharti AXA General Insurance Co. Ltd. 78.23%

71
 Cholamandalam MS General Insurance Co. 50.01%
Ltd.

Gross Direct Premium Collection

Gross direct premium collection of non-life insurance companies grew 13.43% between April
2018 and February 2019. General insurers received premiums of Rs 1.52 lakh crore during the
period, against Rs 1.34 lakh crore in the previous financial year.

Gross direct premium collection of non-life insurance companies grew 13.43% between April
2018 and February 2019. General insurers received premiums of Rs 1.52 lakh crore during the
period, against Rs 1.34 lakh crore in the previous financial year. Officials in the industry say the
growth mostly came from health, motor insurance and personal accident insurance.

According to the data from Insurance Regulatory and Development Authority of India (IRDAI),
New India Assurance continued its dominant position with market share of around 14.04% and
growth of 5.82% in premiums. Other public sector insurers such as United Indian Insurance and
National Insurance Company saw negative growth in the period under review.

72
Oriental Insurance registered highest growth of 14.36% among four public sector insurance
companies. All the four public sector insurers have a combined market share of 40.02%.Senior
officials in the insurance industry said, “Growth in health insurance has remained strong and we,
in the past few months, have witnessed public sector insurers increasing the price in the loss-
making group insurance plans. Even growth has been positive on aviation and personal accident
policies. However, growth from traditional lines of business such as engineering and fire
insurance has been lower compared to other category.” Currently, health and motor insurance
constitute around 64.7% of the business.

Private players like Bharti AXA General Insurance, SBI General Insurance and Tata AIG
General Insurance saw high double-digit growth. Among private insurers, ICICI Lombard
General Insurance had market share of 8.93% and saw gross direct premium underwritten at
`13,588.79 crore in the April-February period, against `11,501.23 crore in the same period last
year, a growth of 18.5%. Apart from general insurance, standalone health insurance companies
also saw a surge in their premium at 40% in the period of April to February. Standalone health
insurers have seen an impressive growth so far this year, with Aditya Birla Health Insurance and
Religare Health Insurance having grown 101.89% and 75.04%, respectively.

73
 CHAPTER 9
COMPARATIVE STUDY

74
 Max Bupa V/S Apollo Munich

MAX BUPA APOLLO MUNICH

85.96% 89.50%
Claims Settlement Ratio

54,33,000 51,16,000
Number of Lives Covered

4,500 + 10,000 +
Network Hospitals

The market today is flushed with options for health insurance. It is often witnessed that clients
are confused as to which plan to choose, as the features are more or less the same across plans.
While claim settlement and premium charged are important factors to be considered, it is
sometimes the additional / unique features which distinguish a health plan. Two such health
insurance plans have been compared - Max Bupa’s Health Companion plan and Apollo
Munich’s Optima Restore plan. The following are the features of these two plans:

Max Bupa's Health Apollo Munich's Optima

Companion Family Restore Plan
Floater Plan
Coverage Self, spouse, upto 4 children. Self, spouse, dependent
children, dependent parents /
parents in law (Max of 2
adults & 5 children, upto 6
members in a single policy).

75
 Variant Available 3 variants, with different sum Not available.
insured options.

Maximum Renewal Age Lifelong renewal Lifelong renewal

Variant1: Rs. 2, 3 & Rs.4 Rs. 3, 5, 10, 15, 20, 25, 50

Sum Insured
Lakhs
Options Lakhs
Variant2: Rs. 5, 7.5, 10 & Rs.
12.5 Lakhs.

Variant3: Rs. 15, 20, 30, 50

Lakhs & 1 Crore.

Premium (Rs. 10 Lakhs Rs. 18,087 for 1 year Rs. 19,184 for 1 year
cover for self, spouse & 2 Rs. 34,113 for 2 year Rs. 37,774 for 2 year
Children)

Top up & Deductible Available: Deductible options Not available

of Rs. 1, 2, 3, 4, 5 Lakhs

Pre Hospitalization 30 Days 60 Days

Coverage

Pre-existing Diseases Variant 1 : 48 months 3 Years

Coverage Variants 2 & 3 : 36 months

Conditions for Refill / Additional sum insured equal Automatic re-instatement of

Restore/Auto Recharge to base. Sum insured is basic sum insured, if the basic
available for a subsequent sum insured and multiplier
claim in the same year. benefit have been exhausted
Provided is for an unrelated during the policy year.
illness.

76
 Medical Tests Necessary. For sum Necessary
insured upto Rs.4 lakhs ,
applicant needs to bear 50%
of expenses

Alternative Medicine Cover Available for Ayurveda, Not available

Unani, Siddha and
homeopathy upto Base Sum
Insured

No Claim Bonus / Multiplier 20 % increase in Sum Insured, Bonus of 50 % of the basic

Benefit up to 100 % of Base Sum sum insured for every claim
Insured for every claim free free year, maximum up to
year. 100%.
In the case of claim, the In the case of claim, bonus
accumulated bonus does not reduced by 50 % of Sum
get reduced Insured at renewal.

Complementary Health Variant 1: Available once in 2 Available only if sum insured

Checkup years is > 15 lakhs; available upto
Variant 2 & 3: Available 1% of sum insured once in 2
annually. years.

Coverage and Other In patient hospitalization, In patient hospitalization, day

Additional Benefits hospital accommodation care treatments, emergency
(without cap on room rent ambulance, organ transplant,
charges). Day care treatments, second opinion from a medical
emergency ambulance, organ practitioner in case of critical
transplant, vaccination for illness (once a year), up to
animal bites. 10% discount at Apollo
pharmacies, access to online
health risk assessment tool and
monthly health newsletter.

77
Which Plan Should be Opted For?

As seen in the above table, the policies have their own unique features. To briefly state the
benefits of one plan over the other, Max Bupa’s Health Companion plan has a larger option for
Sum Insured, has no maximum age for entry and renewal, has a top up option, covers alternative
medicine, has a higher frequency of complimentary health checks, gives a higher discount if the
policy is taken for 2 years and offers hospital cash irrespective of type of accommodation.
Apollo Munich’s Optima Restore plan has a higher time period for covering pre and post
hospitalization expenses, offers free second opinion for critical illnesses, offers discount at
Apollo pharmacies and gives one access to online health tools and newsletters.

All the plans offer Restore Benefit and a No Claim benefit (although known by different
terminologies). However, the multiplier benefit is higher in the case of Optima Restore. On the
other hand, for the Health Companion plan, the accumulated bonus does not get reduced even if
there is a claim, unlike the Optima Restore plan. However, in this plan, co-payment is sometimes
applicable depending on the age of the insured and the sum insured option.

Which of the two policies one chooses depends on his/her individual needs and situation. If one
needs a higher sum insured or a top up option, he can opt for the Health Companion plan. On the
other hand, if one views the benefits of Optima Restore plan or as useful, then this can be opted
for.

78
 CHAPTER 10
DATA ANALYSIS
AND
FINDINGS

79
Survey has been done to know the Awareness, Preference and consumption pattern of health
insurance. By using Questionnaire method.

Q.1 Do you have any Insurance Policy?

(a) Yes (b) No

60%

50%

40%
No

30% Yes

20%

10%

0%
Yes No

Figure 10.1

Parameters Percentage

Yes 54%

No 46%

Table 10.1

Analysis:-

The analysis shows that blue symbolize of Insurance 68% Respondents having Insurance Policy
32% Respondents don‘t have any kind of Insurance Policy.

80
Q.2 Are you aware about Health Insurance?

(a)Yes (b) No

70%

60%

50%
No
40%
Yes
30%

20%

10%

0%
Yes No

Figure 10.2

Parameters Percentage

Yes 68%

No 32%

Table 10.2

Analysis:-

The condition of health insurance in India is not up to mark. Most of the respondent does not use
health insurance to finance their medical expenditure. These people pay for their medical
expenditure from their pocket. As a result, many of these uninsured individuals either end up
with poor quality healthcare or have to bear financial hardships. The awareness about Health
insurance is very low due to many reasons.

81
Q.3 If yes, do you know benefits of health insurance?
(a) Yes (b) No

70%

60%

50%
No
40%
Yes
30%

20%

10%

0%
Yes No

Figure 10.3

Parameters Percentage

Yes 68%

No 32%

Table 10.3

Analysis:-

Because of lack of product benefit customer are not ready to purchase that product. Lack of
product awareness among distributors, if they are not in position to introduce the product to
customer it will not be in a position to understand the importance and uses of health insurance. it
is rightly said that awareness develop brand equity , due to awareness a customer recognized the
product and purchase the same, a customer is in position to identify the product because of such
awareness.

82
Q.4 Do you have any Health Insurance Policy?

(a) Yes (b) No

60%

50%

40%
No

30% Yes

20%

10%

0%
Yes No

Figure 10.4

Parameters Percentage

Yes 54%

No 46%

Table 10.4

Analysis:-

54% Respondents having Health Insurance policy. 46% Respondents don‘t have Health
Insurance policy. Because lack of awareness about Health Insurance and major issues in
handling of Health Insurance 50%people not having Health Insurance.

83
Q.5 If yes, which companies plan do you avail?

(a) ICICI Lombard (b) Bajaj Alliance

(c) Star Allied (d) New India Assurance (e) Others

40%

35%

30%
Others
25%
New India Assurance
20%
Star Allied
15% Bajaj Alliance

10% ICICI Lombard

5%

0%
ICICI Bajaj Star Allied New India Others
Lombard Alliance Assurance

Figure 10.5

Parameters Percentage

ICICI Lombard 36%

Bajaj Alliance 26%

Star Allied 15%

New India Assurance 15%

Others 8%

Table 10.5

84
Analysis:-

India’s largest Pvt. Sectors Bank, which is also in Health insurance, ―ICICI Lombard‖ is one of
the best health insurance companies and ―Star Allied Health Insurance‖ Company
approximately equally preferred by the consumers, It has been successfully able to sustain in this
competitive market. The company offers attractive products as per expectations of the
customer’s .Although the premium amount is high but customers still opt this company’s
Insurance product. It has created as his own brand image. only because of quality services. In
case of New India Assurance Company and Bajaj Allianz the most target audience are
middleclass and lower middle class, as the company’s premium amount is less than other
insurance company.

85
Q.6 How did you get this health Policy?

(a) Employer Provides (b) Own purchase (c) Family Provides

60%

50%

40%
Family Provides
Employer Provider
30%
Own Purchase
20%

10%

0%
Own Purchase Employer Provider Family Provides

Figure 10.6

Parameters Percentage

Employer Provider 15%

Own Purchase 57%

Family Provides 28%

Table 10.6

86
Analysis

The Analysis shows that 57% respondents purchased own Health Insurance .Single premium
provide lots of extra lifetime facility, as compare to family floater plan customer will get
maximum sum assured. very few companies are provide health insurance for their employee and
in case of family floater company charge more premium as per the age of the family member.

87
Q.7 How much premium do you pay annually?

(a) 1000- 5000 (b) 5001- 10000 (c) 10001 – 15000 (e) Above 15000

Premium

35%

30%

25%

20%
Premium
15%

10%

5%

0%
1000-5000 5001-10000 10001-15000 Above 15000

Figure 10.7

Parameters Percentage

1000-5000 33%

5001-10000 35%

10001-15000 25%

Above 15000 10%

Table 10.7

88
Analysis:

Most of the respondents having insurance policy between the range of 1000- 15000, Insurance
companies offered insurance policy as per the age of the customer but one most important thing
researcher found that as the premium amount is increase automatically customer will get better
coverage and benefit but some middleclass and lower-class customers not able to pay more
amount for premium.

89
Q.8 Why did you purchase this health insurance plan?

(a) Health Expenses (b) Tax benefits (c) Recover Future Uncertainty

0.45

0.4

0.35

0.3
Recover Future Uncertainty
0.25
Tax Benefits
0.2
Health Expenses
0.15

0.1

0.05

0
Health Expenses Tax Benefits Recover Future
Uncertainty

Figure 10.8

Parameters Percentage

Health Expenses 44%

Tax Benefits 21%

Recover Future Uncertainty 33%

Table 10.8

Analysis:-

The main concern of any insurer by purchasing any Health Insurance is to cover their Health
expenses, the number of diseases increases day by day and peoples are paying high amount for
that so to recover that expense people preferred Health Insurance. And most of the customers
purchase health plan for the tax benefit and recover the future uncertainty.

90
Q.9 Which according to you is the most important aspect that every health

insurance plan should cover?

a) Hospital Care b) Preventive Care c) Maternity

d) Health Specialists e) Choice of Doctors

0.8
0.7
0.6
0.5
0.4 Choice of Doctors
0.3 Health Specialists
0.2
Maternity
0.1
Preventive Care
0
Hospital Care

Figure 10.9

Parameters Percentage

Hospital Care 34%

Preventive Care 8%

Maternity 13%

Health Specialist 27%

Choice of Doctors 18%

Table 10.9

91
 Analysis:-

Most of the respondents says that they want better coverage of hospitals and coverage of
maternity also because many of the reasons doctors are taking decision for suzerain so its not
affordable for common men and they want their own family doctors for treatment so this are the
main things that researcher found.

92
Q 10. What are the reasons, you do not have any Health Insurance?

a) It's Too Expensive b) Insurance Is Not Important, No Reason To Get It

c) It Is Too Hard To Understand/Confusing d) I Do Not Have Trust On
Insurance Companies e) Employer Sponsored Cover Is Sufficient For Me
f) All of Them

0.6
0.5 All of Them
0.4
0.3 Employer Sponsored

0.2
No Trust on Insurance
0.1 Companies
0 Hard to Understand

Not Important

Too Expensive

Figure 10.10

Parameters Percentage

Too expensive 28%

Insurance Is Not Important 5%

Hard to Understand 8%

Not having trust on insurance company 16%

Employer sponsored 23%

93
 All of them 20%

Table 10.10

Analysis:-

Respondents think health insurance is too expensive high premium and other problems have
resulted in a very complicated and perhaps unsustainable health insurance system. Respondents
says that the concept of insurance is very hard and confusing to understand because of that
insurance agents mislead people and not provide them actual hidden charges information and
because of other customers experience other peoples are also not having trust on Insurance
company.

94
FINDINGS
A systematic approach was followed to identify the requirements of Target customers to provide
them with benefit and reasonable degree of security. Today everyone believes investment in
Health Insurance –it is vital for the future.

Health insurance has emerged as one of the fastest growing segments in the non-life insurance
industry with 30 per cent growth in 2019-20. For the purpose of regulation, health insurance
companies are classified as non-life companies. Health insurance‘s annual premium collections
are over Rs 6,000 crores. Despite the high growth, the business is a huge challenge for insurers
because of the high losses over soaring medical expenses.

Awareness and Perception of Policy Holder: Out of total 50 respondents only 75percent people
have proper knowledge about Health insurance plan. It shows that there has been 30:70 split
between cashless and Reimbursement Health insurance policy. Even from researcher field
experience it was quite evident that policy holder has not wider information about their insurance
policy.

Knowledge about coverage and exclusion of policy: Most of the time Policy Holders have
inadequate knowledge on illness covered in their polices, exclusion of illness in the policy,
cashless Reimbursement and list of empanelled hospitals. Similarly only 8.2% of policyholders
are aware about the fact that insurance companies charged extra fees for TPA. Claim settlement
and after sales Services:- Majority of the customers complaining that there has been always delay
in claim settlement and other after sale service. Most of the 181 time the agreed time for claim
settlement is one month but actual time for claim settlement is two to three month.

Generally Policy holders avoid dealing directly dealing with their Insurance Company due to
various procedure hassles. Insurance agents seems to have major influence on policy holder s
decision and policy holders more trust and faith of them On one hand, because the prices of
health insurance products most of the customers avoid best Health Insurance Plan.

95
 CHAPTER 11
CONCLUSION
AND
RECOMMENDATION

96
CONCLUSION:
This paper makes an attempt to understand the awareness, preference and consumption pattern of
Health insurance plan.

The result of this study shows that the annual premium is the most important factor that
influences the decision or choice of health Insurance plan. This means that households having
higher income have higher probability of buying healthcare plan. Thus, less income groups may
not opt for health insurance plan. Thus there is a need to develop more products that cater to
need of larger and all levels of income groups. Apart from annual premium, hospital network and
disease coverage or coverage of services hold importance in making choice of healthcare plan.
Thus, insurance company should provide larger network of hospitals and services in their plans
in order to satisfy their customer fully. Accessibility of service provider and company reputation
also moderately influence the decisions. The decision made for choosing the plan is mainly
influenced by self-perceptions. Family and relatives and past experience hold second position for
assisting in the choice of plan. Most people would prefer to buy healthcare plan from private
insurance companies for they provide better services and innovative products. Thus, there is
large scope for private insurance companies to grow.

The legal and regulatory framework of private health insurance, particularly because it operates
in the voluntary market, should continually balance competing goals of access, affordability and
quality of healthcare and provide health coverage to a larger fraction of the population with
varying risk characteristics and ability to pay. Regulations, aside from their aim of providing
protection of health insurance policyholders and beneficiaries, can be potent tools to promote
access to healthcare, control pricing of health coverage vis-à-vis healthcare providers and
enhance quality of healthcare. Allowing the participation of other entities that provide health
coverage, such as Hospital and/or Professional entities, and self-insured health insurance
schemes of Mutual Benefit Associations and Cooperatives would further increase the reach and
depth of private health insurance. Licensing standards for compliance which are enforced on
health care provider facilities as well as self-regulation in the medical profession and within
provider groups are necessary for continuing improvement of healthcare quality. Private health
insurance cannot grow if reasonable consumer expectations relating to access, cost and quality of
healthcare remain promises rather than realities.

The analysis clearly shows that there is demand for cash less health insurance scheme but the
customers want reduction in number of exclusions and inclusion of pre-existing diseases. They
want the TPAs to be efficient and perform up to the expectation of the policyholders and
insurers. Even though the insurers are providing need based plans but more should be done to
meet the needs arising out of changing lifestyles of people. The population of elderly people, in
India, is rising and they would require institutional care, which is totally missing. The plans need
to include pregnancy related expenses, inclusion of chronic and debilitating diseases, HIV and
AIDS, TPAs need to be more efficient in claims processing and providing better networking for

97
the policyholders. These challenges can be overcome by setting up and standalone health
insurance companies that are run on-profit objective. In most of the countries life insurance
companies underwrite health insurance. In India, life insurers should be allowed to underwrite
health insurance. The tax benefits available at present should be hiked and continued with. The
health plans should be wide based in order to include outpatient care along with in-patient. To
create the awareness of health insurance is very important, the Government and all the associated
bodies should all offer their support in spreading health insurance awareness so that Indian
citizens are aware of the right to seek quality healthcare without any financial thought. And it
will help to increase the awareness of health Insurance among the people.

RECOMMENDATION:
The Health Insurance recommendations, some of the keys ones are as follows:

♦ Lowering The Limit Of Capital Requirement: The capital requirement for health insurance
companies be reduced to Rs 25 crore from the current Rs 100 crore. Present Rs 100-crore
requirement is a deterrent since a larger capital requirement will bring in additional cost
associated with such capital.

♦ Raising The FDI Limit: The foreign direct investment (FDI) limit be raised to 51 % from the
existing %. This could attract global health insurance players and encourage them to take a long-
term perspective of their investments in the country.

♦ Grading And Accreditation Of Health Providers: The grading and accreditation of hospitals
and health providers in a post-tariff regime. The parameters used to evaluate the hospitals would
include medical specialties (evaluated on the availability of equipment, qualification and
adequacy of medical personnel). The provision of a database is something that could be taken up
by the Tariff Advisory Council in active collaboration with the IRDA.

♦ Advertisement Of Health Insurance: Large efforts should be laid towards developing health
insurance as an alternative and acceptable method of personal finance risk management tool. The
whole aim should be to divert towards popularizing health insurance as a concept in rural areas
under the guidance of the ministry of finance and the IRDA.

The Research also recommends that

(1) Life insurance companies to develop underwriting guidelines and sell health insurance
policies because of their wide distribution network.

(2) Multiple health insurance products should be offered at various price points to customers.

98
(3) IRDA should engage the services of the Ministry of Health and Family Welfare, Indian
Medical Council, Indian Medical Association, healthcare associations and other bodies.

Other Recommendations:
♦ Abolition of the service tax on health insurance products. It has also been suggested that
income tax holidays be accorded to the health insurance companies for 10 years from the date of
incorporation.

♦ Introduction of a common pool for terminally ill people/people who do not have access to any
kind of health insurance.

♦ Fraudulent claims, when discovered and proved, should be treated as criminal offence and
subject to strict legal action including imprisonment.

♦ Systems of co-payment, co-insurance and voluntary deductibles to be used to

(1) Make health insurance more viable,

(2) Control frauds

(3) Refrain customers wanting to avail luxury facilities.

99
ANNEXURE - I
BIBLIOGRAPHY

100
BIBLIOGRAPHY
[Link]

[Link]

[Link]

[Link]

[Link]

[Link]

[Link]

101
ANNEXURE - II
QUESTIONNAIRE

102
 QUESTIONNAIRE
Name of Respondent: -

Date: -

Gender

(a) Male (b) Female

Age (in Years)

(a) 18 - 25 (b) 26 – 35 (c) 36 - 45 (d) above 45

Qualification

(a) 12th (b) Graduate (c) Postgraduate (d) Professional

Monthly Income (in Rs.)

(a) Below 10,000 (b) 10,001-20,000 (c) 20,001-30,000 (d) above 30,000

Occupation

(a) Student (b) Private Employee (c) Govt. Employee (d) Business Man

Q.1 Do you have any Information regarding Insurance?

(a) Yes (b) No

Q.2 Are you aware about Health Insurance?

(a)Yes (b) No

Q.3 If yes, do you know benefits of health insurance?

(a) Yes (b) No

Q.4 Do you have any Health Insurance Policy?

(a) Yes (b) No

Q.5 If yes, which companies plan do you avail?

(a) ICICI Lombard (b) Bajaj Alliance (c) Star Allied

(d) New India Assurance (e) Others

103
Q.6 How did you get this health Policy?

(a) Employer Provides (b) Own purchase (c) Family Provides

Q.7 How much premium do you pay annually?

(a) 1000- 5000 (b) 5001- 10000 (c) 10001 – 15000

(d) Above 15000

Q.8 Which according to you is the most important aspect that every health insurance plan
should cover Hospital care?

(a) Preventive care (b) Maternity (c) Health Specialists

(d) Choice of doctors

Q.10 What Are The Reasons, You Do Not Have Any Health Insurance?

(a) It’s Too Expensive (b) Insurance Is Not Important

(c) It Is Too Hard To Understand (d) Do Not Have Trust on Insurance Companies

(e) Employer Sponsored (f) All of Them

104
THANKYOU

105