Professional Documents
Culture Documents
Final Project On Health Insurance
Final Project On Health Insurance
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Health insurance insures you and your family against sudden medical
expenses. A medical emergency can arise due to sudden illness or
injury. With medical expenses rising, a health insurance policy would
help you sail through a bad patch. Your medical expenses will be
taken care of by the Insurance company provided you pay your
premium regularly.
World health organization defines health as complete physical, mental
and social well being and not merely the absence of disease and
injury. As per WHO, a country’s Health Systems comprise of all the
organizations, institutions and resources that are devoted to produce
health actions.
New India Assurance Company Limited, stressing on the social
security aspect of health insurance, in their written note, stated;
“Basically the philosophy behind the concept of Health Insurance is
to provide protection against uncertainty of illness /accident by
spreading the risk based on the principle that “what is highly
unpredictable for an individual is predictable for a group of
individuals. Thus, insurance is a system by which Healthcare
expenditure of few unfortunate individuals, who suffer from
illness/injury, is shared by many fortunate ones who are insured and
exposed to the same risk but remain healthy.”
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INDIAN SCENARIO
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Health care insurance is one such alternative that covers the risk of
payment for health care. William C Hsiao (1992) of the Harvard
University undertook a comparative study of the three models and
concluded that "public financing and private delivery" of health care
as practiced in Canada is the best among the 3 models in terms of
performance, health outcome, public satisfaction and access to health.
i. The size of the population is far more than any of the countries
where it is being currently practiced efficiently.
ii. The level of the per capita income is far lower than in other
countries.
iii.The type of federal set up India has is different from the rest.
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One of the major goals for the future health system in India is to
ensure good health for the population through access to high quality
services. To achieve this goal, there is a need to enlarge coverage and
rationalize the current mechanisms for collective health financing.
There are at least six dimensions of the choice of health financing
policies:
Identification of beneficiaries
Benefits covered by insurance source(s) of financing
Methods for provider payment institutions that pay providers.
Role of public and private sectors in the delivery of service
Tax
funded
Public Social
Security
Externally
funded
Total health
Expenditure
Out-of-
Pocket
Private Private
Health Ins
Externally
sourced
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The following are brief descriptions of some of the major health care
products available in world markets today.
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EMPLOYER-MANAGED SYSTEMS
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NGO SYSTEMS
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the policy is in renewal for the preceding three years. Suitable for
persons of any nationality but treatment should be availed of within
the country and the claim is paid in Indian currency/foreign
currency.
Salient Features:
Provides cover, which takes care of medical expenses following
hospitalization from sudden illness or accident
Cover extends to pre-hospitalization and post-hospitalization for
periods of 30 days and 60 days respectively.
Domiciliary hospitalization is also covered.
Benefits:
Reimbursement of medical expenses
Discount in insurance premium is allowed on family package,
cumulative bonus and health check. In case of family package
cover, a single member can avail of the entire policy limits.
The premium paid by a cheque upto a maximum of Rs. 10,000 is
totally exempt from income tax.
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Domiciliary Hospitalization:
The term means that a patient can be treated at home when he is not
in a fit condition to be moved to the hospital or where is no
accommodation in the specialist hospital provided.
The treatment was for a period not less than 3 days.
The sub-limits of sum insured towards domiciliary hospitalization
are furnished in the sum insured and premium schedules.
Exclusions:
The facility is not available if any illness is contracted within 30
days from the commencement of risk except in case of an accident.
Any pre-existing diseases
Treatment for contracts, benign prostatic hypertrophy, hydrocele,
congenital internal diseases, fistula in anus, piles sinusitis and
related disorders for 1st year of policy
AIDS or conditions of similar kind.
Requirements:
A completed proposal form. If the prosper is a ‘Diabetic’, a separate
questionnaire completed by the family physician.
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Salient Features:
The policy provides hospitalization benefits for lifetime after
retirement’s age of the insured.
Premiums can be paid in equated annual installments up to the age
of retirement
Premiums can also be remitted in lumpsum on one time basis.
Discount is offered for one time payment
Benefits:
The policy comes into force after retirement and provides for
hospitalization and domiciliary hospitalization benefits, following
an accident or sickness.
Other conditions:
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Requirements
A completed proposal form
Proof of age is necessary as the payment of premium depends on
the age
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B. LIC COVERAGE’S:
The Life Insurance Cooperation of India introduced a special
insurance programme in 1983 which covered medical expenses for
only four dreaded diseases. It was withdrawn and introduced
subsequently in 1995. At present the modified versions are
available in the form of two products viz. Jeevan Asha and Asha
Deep
1) Jeevan Asha:
Features:
Open ended scheme
Covers many surgical procedure
Fixed benefits for surgical treatment can be availed twice
(subject to conditions)
Exclusive Double/Triple accident benefit.
Option to switch over from existing Jeevan Asha plan
Suitable for:
The Jeevan Asha II plan is apt for people who whose family history
tends to show hereditary lineage of maladies and afflictions that
have required major or minor surgery from time to time.
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Special Features:
Under the Jeevan Asha plan, the major surgical procedures covered
for are:
Nervous system (non-malignant causes)
Respiratory system
Cardiovascular system
Haemic and lymphatic system
Endocrine & Ocular system
2) Asha Deep:
Features:
Cover the risk of four major ailments namely, Cancer (malignant),
Paralytic stroke resulting in permanent disability, renal failure of
either kidneys or Coronary artery diseases where by-pass surgery
has been done.
Suitable for:
The Asha Deep II (with profits) policy is best suited for people if
they anticipant or have a family history of serious diseases like
Cancer, Paralysis, Renal failure and Coronary disease.
Special Features:
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During the term of the policy, if the life assured is afflicted by any
of the major ailments listed above and the same is established as per
rules (in case of Coronary artery disease, the life assured must have
undergone the by-pass surgery), the policyholder will be eligible for
the following benefits, the policy is in force for the full sum
assured. Immediate payment of 50% of the sum assured
Payment of an amount equal to 10% of the sum assured, every year
commencing from the policy anniversary falling on or after the date
of affliction and ending with the policy anniversary preceding the
date of maturity or the date of death of the life assured whichever is
earlier.
Payment of balance 50% of the sum assured and vested bonuses on
the date of maturity or on death of life assured, whichever is earlier.
The bonuses will be calculated on the full sum assured even though
50% of the sum assured would have been paid earlier
A lien for a period of one year will be imposed on all policies on all
policies under this plan. If the life assured does not get afflicted by
any of the diseases mentioned above, the full sum assured and
vested bonuses will be paid on the date of maturity or on death of
the life assured, whichever is earlier.
Benefits
1. Survival Benefits
2. Sum Assured and vested Bonus on maturity.
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Death Benefits:
Natural: If the life assured is not afflicted by any of the
specified ailments, the legal heirs get the full Sum assured +
accrued bonus.
Accidental: Accidental benefits available to the life assured
whether afflicted or not afflicted by any of the specified
ailments.
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MEDICLAIM - AT A GLANCE:
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Basic Cover:
The insured person can claim reimbursement for the following
expenditures, provided they are reasonable and necessary
incurred:
Room expenses
Nursing expenses
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OVERSEAS MEDICLAIM
At a glance you need Videsh Yatra Mitra Policy if you are going
abroad on business or holiday. The benefits under policy include:
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If the insured person suffers any bodily injury during the overseas
trip and such injury, within 12 months of its occurrence, is the sole
cause of death, loss of sight or limbs of the insured, the Insurance
Company will pay up to US$ 50,000 as compensation.
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Specific Conditions:
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The insured will receive US$ 1,000 from the Insurance Company in
the event of total loss of baggage that has been checked in by an
International Airline for an international flight. The insurers
however reserve the right to either replace or pay the intrinsic value
of the lost article.
Specific Conditions:
The Insurance Company will not reimburse partial loss or damage
of baggage
No claim will be paid for items whose value exceeds US$ 100,
unless the proof of ownership is presented to “Mercury”, in the
event of submission of claim.
Valuable items are not covered by the policy since they should at
all times be carried by the insured person and not be packet as part
of checked in baggage.
Any recovery from the airline under the terms of the Warsaw
Convention shall become the property of the insurers.
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Specific Conditions:
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Specific Conditions:
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Specific Conditions:
US$ 200 is the deductible amount and any expense below this
amount will have to be borne by the insured person himself or
herself. Further, it also means that from every claim this amount
will be deducted before making settlement. This deductible applies
only to third party property damage.
The Insurance Company shall meet no claims arising from
Employers or Contractual liability.
No claims arising from liability to any family members,
traveling companion, friend or colleague of the insured, shall be
met.
Claims arising directly or indirectly from the following shall not
be paid.
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Features:
Each trip should not exceed 30 days. This period can be extended
by 7 days without any extra charge, if the delay is beyond the
control of the insured person.
The insured person can be between 18 and 70 years of age. The age
limit can be extended to 75 years at the option of the Insurance
Company and after such person undergoes a thorough medical
check up. The Medical Reports should be authorized by an M.D. in
Cardiology and should include, ECG Reading, fasting blood
sugar/Urine sugar & Treadmill test in case of medical history.
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LIMIT (in
BENEFIT REMARKS
US$)
Deductible: US$
Medical Expenses 500,000
100
Personal Accident 25,000 -
Loss of Checked in
1,000 -
Baggage
Delay of Checked in
100 Delay > 12 hrs
Baggage
Loss of Passport 250 Deductible: US$ 30
Deductible: US$
Personal Liability 200,000
200
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be a NGO, Trust, Hospital or Cooperative etc. their role can vary from
performing as intermediary where both treatment and insurance are
provided by intermediary itself or where the treatment and insurance
are provided by third party.
Micro health insurance as mechanism of providing healthcare to the
poor, the role of these CBHI schemes will be very crucial. The
success of many of these schemes though at a smaller level at present,
provides important lessons for the policy makers. One important point
to remember here is that CBHI schemes have their own problems
which are non-availability of good providers, lack of professional
management, financial sustainability issues and non-recognition by
IRDA. These problems need to be taken into account while assessing
their benefits. Though at present CBHI schemes in India are serving a
very small population, it lessons learnt from each of these schemes
can be used to design more of such schemes in different parts and at
much larger level they can be beneficial.
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Socio-Economic Environment
The socio-economic environment has a significant impact on the
type of health insurance policy that consumes will look to buy. If
will also have an impact on the claims patterns of consumers. For
instance, in a relatively poor society, product demand will be for
products that cover day-to-day basic medical care. This will tend to
be products which have high frequency of claims where the
average claim sizes are relatively low.
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IT Systems
The measurement and manipulation of data is of essential
importance in operating an effective health care management
system. There is a vast quantity of data that must be stored and
manipulated for the various aspects of health care management. In
addition this data should be readily available and easily updateable.
In short the system should be robust!
Investment Strategy
Due to the frequency and level of the contribution received for
most health insurance products, providers have large amounts of
funds that need to be invested in appropriate vehicles. Certain
countries (e.g. South Africa) have also introduced reserving
requirements, which will result in significant reserves building-up
over time for health Insurance products. This has introduced the
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Cross Subsidies
The issue of cross-subsidies is another item which needs to be
carefully considered by any insurer. There often tends to be cross-
subsidies in health insurance policies and in particular in medical
expenses policy. Even when legislation does not force cross-
subsidies, it is quite common for there to be cross-subsidies in
health Insurance products. The insurance company needs to
examine the level of the cross-subsidies and ensure that the style of
their products is such that anti-selection will not result in abuse of
these cross-subsidies.
Risk Management
The success of any health insurance policy is crucially dependent
on appropriate management of the underlying risks which can be
best attained by
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AIDS
The challenges that faces health insurers is how to deal with AIDS
claims, and what product can be designed that meet the needs of
AIDS suffers. This is a challenge that has not, in any market, to my
knowledge, been fully addressed. In some Southern African
countries, insurance companies are offering certain anti-retroviral
treatments in order to extend the expected life span of their policy
holders. This is one area where health Care Management can be
used to delay the payment of insured benefits (normally Life
Insurance) and also add the expected life of the insured, thus
benefiting all parties concerned.
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Capitated Arrangements:
A further innovation in some progressive markets, including the
South African market is the use of a capitation arrangement for
Medical expense Policies. A capitation arrangement involves
identifying certain service providers usually doctors who will
provide given services to their patients. The services provided are
usually doctor’s consultations. The doctor is paid a fixed fee per
policyholder under its care. The doctor is then responsible for
providing whatever care is necessary to that patient. By linking up
a provider network through a capitation arrangement the risk of
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over servicing and hence higher costs is placed in the hands of the
doctors. It will then be up to the doctor to ensure that members
receive appropriate services which will costs the doctor and not the
insurer more.
CONCLUSION:
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There is yet another criticism about the Indian health delivery system:
urban bias in the allocation of resources. As of 90-91, 66.96 percent of
the resources spent on health care had gone to the urban sector which
accounts for 25.7 percent of the total population, while only 33.04
percent of the resources had gone to the rural sector, which accounts
for 74.30 percent of the total population. The per capita expenditure
on health care of the urban sector was said to be around Rs.152 as
against Rs.26 of the rural sector.
The Government being the central player in the health care delivery,
the system is suffering from financial constraints and inefficiency in
allocating whatever resources available. It is slowly being realized
that sole reliance on the public health care system is no longer
desirable.
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