HEALTH INSURANCE IN INDIA

Health Insurance
• Health – Preventive – no regulation Promotive – no regulation Curative – Partly regulated

Curative- OPD - IPD

Insurance
• • • • • Life Non-life Reinsurance: All of them are regulated Life: critical illness Non-life: Medi-claim

Some basic concepts of insurance • Risk ? • Risk pooling: law of large numbers. low&high. rich&poor. young&old • Risk avoidance: LPG godown • Risk mitigation: preventive • Adverse selection vs risk selection • Moral hazard vs induced demand (deductible & co-payment) .

5 billion • By 2050.2% • State Govt. 14.4% • Private Firms 3% • Public Firms 2% • External Funds 2% • Local Govt. world population 9 billion • Most of the growth in developing countries. Enormous mismatch in global healthcare financing • 2.Present scenario • 1. 2. sources of finance in health sector • Household 68. Developing countrieshave 84% of population & 90% of disease burden • 3. 7.8% • Central Govt. world population-7. • 4. By 2020. According to NHA of India 2001-02.2% .

9% • Private spending 4 to 4.(continued) • Govt.5% of GDP • Overall Out of Pocket Expense 80% • (incentivises supplier induced demand) • In Bihar & UP. it is 90% • NSS (1995-96) showed that rich consumed public service 3 times > the poor . spending on health care of GDP 0.

23 075.1 055.79 220.72 020.4 BPL POPULATION .2 017.2 266.FAMILIES 2001 BPL URBAN BPL RURAL TOTAL BPL BPL URBAN Families Figures In Million TOTAL BPL RURAL Families 067.33 .6 065.FAMILIES 2004 BPL URBAN BPL RURAL TOTAL BPL BPL URBAN Families Figures In Million TOTAL BPL RURAL Families 80.93 301.BPL POPULATION .0 193.8 048.

By self funded Govt.Depend upon Govt. Defense. . / Private Hosp.9% .  1. Scheme i.  86.  10% . Railways.  40% . ESI etc.By Insurance Policies. PSUs organization.Present status  2% .Unable to take treatment.1% . CGHS.e.Rural / BPL population { UHIS / Community Insurance}.

    a. b.Unable to take treatment. sale of property–make them poorer. Borrowing money. Prefer traditional / local / home made remedies. Rest later. . c.(continued) REASONS.   Mostly illiterate and poor. First priority is food. Hosp. Public facilities: far from reach – distance and if managed to reach – poor quality treatment to purchase medicines etc from out side Can’t afford high treatment cost: in Pvt.

Financing Options • Self pay (include user fees) • General tax revenue financing • Insurance: – Social insurance: Compulsory. Public or private management – Private: Voluntary • Community Financing • Individual Savings Account/Catastrophic insurance .

Comparison of risk pooling and equity of financing methods Financing method General revenue Social insurance Risk pooling Widest risk pooling Within the covered population Equity Most equitable Redistributive within the covered population Private insurance Group Individual Community Financing User fees Within a group Within an age/sex group Within a community No risk pooling Redistributive within a group Not equitable Redistribution within a community Not equitable .

25.000/Rs.000 Rs. etc. Limit for any one illness Personal Accident Cover Pre Existing Diseases Waiting period First Year Exclusions Maternity Benefits Bystander Allowance PREMIUM (for a family of five) (Sub-300) BPL Family Pays Rs. 4.248 IT FAILED .548 Rs.30.500/Rs. 15. Blood. Oxygen.1st NATIONAL HEALTH SCHEME FOR BPL.000/NOT COVERED 30 days NOT COVERED NOT COVERED NOT COVERED Rs.UHIS BENEFITS            Sum Insured Limit for Anesthesia.

655 40.605 1.82.718 76.40 10.14.42.65.53 154.259 1.057 .Performance under UHIS Name of the Co 2004-05 No.704 81494 No. Persons 1.772 67. of. of Families 65.02 350.44 396.638 308238 Premium Claims Paid 2005-06 2006-07 2007-08 (Up to Dec’07) (Rupees in lakhs) 280.47. of Policies 52.641 2.98 335.432 69745 No.01 739.801 4.

Lack of awareness / publicity. Inadequate coverage / benefits. Cost of collection of premium more than the premium No confidence of public about treatment in case of need . Absence of Nodal implementing agency Improper identification system of beneficiaries.min per person hence Unaffordable in spite of govt.REASONS FOR FAILURE OF UHIS  Lack of willingness of Insurers / other Stake holders. subsidy (Rs 200(1). 300(5) & 400(7). Huge premium burden Rs 165/.

Period starts from 1st June .Yashashvini 1. Milk Weavers Industrial Artisans SHG/Stree-shakti groups 2. Benefits available to all members of all types of rural coops such as: Fisherman. Age: newborn to 75 Years 3.

60 per child below 18 Years) Rs. 120+60/= Rs.3 With 15% discount on 5 or more members of family .05 Premium per farmer per Annum Rs.6 2. 60/= Rs.Participation Year Year-1 (2003-04) Year-2 Year-3 Number (in Million) 1.0 1. 60/= Rs.9 2. 120/= (Rs. 120/= (for adult & child) Year-4 Year-5 (2007-08) 1.

lakh per year and Rs. . 1600 surgical procedures @ 40% to 50% of price Normal delivery IV Year Neonatal Care IV Year Free OPD Discounted Lab tests Defined Medical Emergencies IV Year Surgery package includes everything during hospital stay Coverage for stabilization of defined Medical emergencies. 4. 1 lakh per hospitalization. Coverage upto Rs 2.1. 2. Hospital for 2 days for Snake-bite Bull Gore injury Electric Shock Drowning Dog bite Injuries with agri equipments 3.

Network hospital intimates TPA for validation & extent of cashless facility 3.Procedure 1. Hospital sends claim docs to TPA for reimbursement . Member approaches Network Hospital with ID Card 2.

2. 100% Cashless Treatment 3. Choice of Hospital available 5.1.Existing disease – no bar to avail the benefit. Laminated Photo ID 4. Administrative Cost Minimal . Pre.

2003-04 2004-05 2005-06 2006-07 2007-08(sept07) Free OPD Surgeries 35814 9047 50174 15236 52892 19677 206977 39570 22428 12765 .

16 174 120 43.7 06-07 18.• Members(in lakh) Contribution of Members(In crore) Contribution Govt.1 04-05 20.65 66 60 40.0 27.6 2.2 10.5 1.2 05-06 14.Cost (in lakh Admn.02 11. (in crore) Total(in crore) Surgery Cost (in crore) Cost/Member Collection/Member Total Admin.5 38.61 21.3 .47 92 60 12.Cost/insured (in Rs) YEAR 03-04 16.0 41.55 10.3 11.78 16.97 3.5 20.58 15.5 14.3 26.72 204 120 2.7 9.7 4.

• 6. Enrolment & Photo ID Card Cashless Treatment • 3. • 4. • 2. MIS District Coordinator • 5. Member help-line/Call Centre Medical/Case Management • 7.TPA (FHPL) FUNCTIONS • 1. Claims Management .

Network Hospitals Spread Across 113 Locations :Exclusive Front Desk Counter • 2003-04 114 • 2004-05 • 2005-06 • 2006-07 • 2007-08 137 197 299 310 .

Renewal Rate: Y3 43%. Mandatory rather than voluntary . Community Contract • 5. No Reinsurance • 4. Misuse by Hospitals • 7. Low Insurance Premium • 6.Sustainable . Individual Contract Vs. Risk selection (voluntary) & not risk diversification • 2.NO • 1.Y4 62% • 3.

40 10286 120 .08 12083 60 19439 25.1 24.65 11822 Year 1 Year 2 Year 3 Year 4 5. (in Rs) • No.78 13262 120 37330 38./Ins.CLAIMS • • Claim Incidence • per 1000 Insured • Claim Cost per • Insured(in Rs) • Prem.6 14.6 8. of Claims • Total Claims • (Rs in cr.) • Average Claims 9008 10.6 66 104 187 253 60 14963 18.

4/97 18.18230/(Y2) to Rs.1/205 40% 51.9/139 58.4/456 0-2 Yrs 3-7 38-43 73-78 Women Participation Top 5 Hospitals Claim share Average of Top 5 Hospitals increased from Rs.2/449 13.7/216 Year 3 50. 39600 (Y4) Average of remaining hospitals remained almost the same at Rs 640/= .5% Year4 63.1/306 5.6/963 12.9/1532 21.7/1687 23.8/627 8.Claim Incidence per Thousand age groupwise/ Claim cost per insured Year 2 26.6/64 19.

kidny.1. • Sum Insured Rs. • Serviced by Star health . • 100% premium by Govt.cancer. • Proposing to extend to 7 districts from 1/04/08 . (5 more districts from 7/12/07) • Coverage for 5 critical surgeries(heart.NRHM A. (213) • Cash less facilities.CRITICAL ILLNESS. • Negotiations of tariffs etc for 163 defined surgeries.50 lakh. 48 lakh (II phase) • Pilot project in 3 District.3 Districts • Formation of a State Trust • Enrolment by family photo electronic ration card (Biometric Card)..neuro and burns-now trauma also added). • Government and private hospitals as part of scheme.Private Insurer.P. for BPL families.EFFORTS BY STATES. 20 lakh (1 phase).

1 17.5 16.Statistics District No. of camps Patients screened Referred for admission P H Mahboobnagar A Anantapur S E Srikakulam 1 From 01/04/07 2501 3201 2943 124. Surgeries (1st April 2007 to 31th Dec 2007) Amount In millions No.1 From 07/12/07 827 56 53 150502 15234 31438 13921 3226 3956 East Godavari P H A S E 2 West Godavari 21.7 29.9 276 335 216 42223 64424 43855 3903 5296 4092 Total 8645 440 558 419.5 Chittor Ranga Reddy Nalgonda 167 305 374 07.2 277 113612 14505 .2 175.2 67 38 63 42341 9847 14752 3136 1513 2674 Total 1844 92.9 118.

Use of Government and private hospitals both Serviced by State Health Insurance Fund Agency.000 and 7 critical surgeries for Rs 1. Sum Insured . Pilot project in 5 District. . Premium Rs 480 + ST Beneficiaries 8 lakh BPL Families Negotiations of tariffs etc for all procedures Cash less facilities.NRHM Enrolment of families by Health Card based on BPL Data.Primary Cover Rs 30. 100% premium by Govt.000. for BPL families.35.RAJASTHAN .

Rural Development Ministry : Health for BPL.EFFORTS OF OTHER CENTRAL MINISTRIES Textile Ministry: Scheme for weavers(16lakh). Labour Ministry: Rashtriya Swasthya Bima Fisheries Department : Scheme for fishermen. Ministries are interested in launching their own Insurance schemes. Finance Ministry: UHIS Chemical & fertilizer Ministry: Drugs. .

000 per BPL family on a family floater basis • Pre-existing diseases to be covered • Coverage of health services related to hospitalization and services of surgical nature which can be provided on a daycare basis .RASHTRIYA SWASTHYA BIMA YOJANA Benefits • Total sum insured of Rs 30.

• Transport allowance @ Rs.RASHTRIYA SWASTHYA BIMA YOJANA Benefits • Cashless coverage of all eligible health services.100 per visit . • Provision of Smart Card. • Provision of pre and post hospitalization expenses.

FUNDING • Contribution by GOI : 75% of the estimated annual premium of Rs 750. 30 per annum as Registration Fee/ Renewal Fee • Administrative cost to be borne by the State Government. • Beneficiary to pay Rs. • Cost of Smart Card to be borne by the Central Government. 565 per family. subject to a maximum of Rs. . An additional amount of Rs.60 per beneficiary would be available for this purpose. • Contribution by the State Governments: 25% of the annual premium and any additional premium beyond Rs 750.

REQUIREMENTS Insurance with adequate Sum Insured. Coverage of pre existing diseases. Simple terms and conditions of the policy. Affordable premium. Identification and Networking of good & small private hospitals/ specialised day care centers Easy mechanism of collecting premium OPD and Drug cost . Adequate capping on various procedures to stop misuse of the scheme.

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