Health Insurance

Dr Anshuli Trivedi
I st year PG
Dept of Community Medicine.
Based on lecture by Dr Joseph Kuruvilla.
CMC Vellore. On 3/9/8.
What is Health Insurance?
“It is a contract between insurer & insured
where the latter is covered against health
costs on payment of premium as per terms
& conditions of the issues.”
It is regulated by IRDA-Insurance Regulatory
Development Authority.
Under Ministry of Finance.
Health Plans-Subscription based Medical Care.
Beneficiaries-Self Help groups, factory workers
RMP’s, students, defence personnels & other
sections of society.
C:\Documents and Settings\Administrator\My Documents\HEALTH INSURANCE.htm
 Key words in Health Insurance-
Premium- The amount need to pay in policy in order
for insurer to take the risk of health care of the insured.
Contract- Documentary understanding of terms & conditions
between insurer & insured.
Sum Insured-Total amount, a policy assures as insured as a risk
coverage based on premium paid.
Third party Administrator-(TPA)-Agent who takes care of
hospital bills of insured clients as there are very few insurance
companies which deals with hospitals directly.Ex Star Health,Bajaj
Allianz.

Inadmissible-Those items not covered by medi claim insurance

policy. Ex-Medical records, diet.
ICD & CPT-International Classification of Disease & Current
Procedural Terminology. C:\Documents and Settings\Administrator\My Documents\HEALTH
 Denial & Authorization- Whether TPA
approves hospitalization & estimated amount or not.

Co pay ment- In every policy there is particular % of amount

needed to pay out of whole bills.

Deductible-Amount which client has to pay before HIC starts

paying.

Diagnostic Related Groups (DRG)- Payment related to

payment schedule as per govt. rule.

Charge Master-Hospital tariffs for investigation ,drugs,

consultation.

Co-Insurance-Instead of paying a fixed amount policy holder

pays % of total cost.
.
Pre Authorization Form-Authorization or
permission from TPA in order to admit patient in hospital.

Capitation-Amount paid by insurer to health care provider.

Coverage Limits-Health plans with fixed health care

payments.

Out of Packet Maximums-The members obligation ends

when they reach out of pocket maximum, health plan pays
the rest.

Empanelment- Inclusion in list of treating physicians &

institute.

C:\Documents and Settings\Administrator\My Documents\HEALTH INSURANCE.htm

 Health insurance typically helps a patient manage
health care costs beyond a threshold amount
through pooling . . .

As a
contingent
Patient claim
expenditure Insurer payment instrument,
(INR) (from premium health
pool)
Stop-loss
insurance is
level an efficient
Individual way to help
payment
individuals
prepare for
Deductible Co-insured health care
Health care
expenditur
e
(INR)
SOURCE-Russell Parera National Industry Director Financial ServicesDelhi 18 October 2004
 The World Health Organization has defined
possible approach to financing of health
expenditure . . . Tax-based and
out-of-pocket
expenses are
Using central / state direct expense
Tax-funded related outlays
revenues for health
Social
Compulsory premium
Public contributions to Health
security
health insurance
Externally Channeling loans, involves a fund
funded grants etc. to pool for future
Total health
expenditure healthcare health care
Out-of- Payments to health
pocket
care providers for
External fund
Private services
Private sources rely on
health ins. Premium contributions
donations,
towards health
Externally grants
support
sourced Channeling donations
etc. to healthcare

SOURCE-Russell Parera National Industry Director Financial Services Delhi18 October 2004
 Types of Health Insurance-
1)Fee for Service Health.
2) Managed Care Health Insurance.
Health Care is provided by-
1) HealthMaintenance Organization.
2) Preferred Provided Organization.

Coverage of Health Insurance-

Individual Health Insurance.
Students Health Insurance.
Small Business Health Plans.
International Health Insurance.
Injury Plan.
Group Health Insurance.
Family Health Insurance.
Disability Insurance.
Low Cost Insurance.
Medical Savings Plan.
Travel Insurance.
Crop Insurance.
 Issues relating Health Insurance in Medical

Institute - ABCDE……..
Analysis-MOU’S –Memorandum Of Understanding.
Balancing-Terms, condition, Time of settlement of Bills.
Consensus Building.
Drafting/Developing- Final agreement.
Executing.
Empanelment.
Regular Auditing of bills & validity of claims.
Timely payments of claims.
 Community based health Insurance-
Ambulatory & Inpatient care.
MODELS
1) Providermodel-Usually NGO, Hospital health insurance for
community around it. Annual payment given to provide-annual
health checkup, discounted OPD & IPD facilities. Ex-Student
Health Homes in Calcutta, VHS Chennai.
2) Insurer Model-Insurer collects money from community &
purchase health service for it. Ex. Spandan in A.P.
3) Linked Model-NGO intermediately between Target population
& insurance company. Ex-SEWA Health Insurance by ICICI-
Lombard for females.
 Health Insurance in India-
It is infantile stage.
Limited Coverage (10% of pop.)
Lack of uniform schemes.
Very less amount spent on health as compared to
other countries.(32 $ p.c ,5.3 % GDP.)
Insurance is not attractive due to lot of exclusions in
medical bills.
Lack of uniform CPT & DRG leading to discrepancy in
billing.
Govt. of KA,TN,M.P. are promoting micro insurance.
 The proportion of insurance in health care
financing in India is extremely low . . .
Health care financing in India Public spending
in health care
2002, % is very low at
17% and the
100% National
Health Policy
has
83% from 86% from recognized
private out-of- this
sector pocket
spending expenses
More than 86% of
healthcare
financing is
through
unplanned
0% for, non-
Source of finance Means of finance contributory
Source: WHO. CII-McKinsey. 2003. spending
 Universal Health Insurance Scheme-
In 2004, MOF, UHIS for BPL families, Premium of Rs200/individual,Rs-
300/5 member family,Rs-400/7 member family.

Health Insurance for HIV +VE

Pilot project in Karnataka by Programme Director of Population Service
International ,in collaboration with Star Health , Allied Insurance Company &
KNP.
Rs-30,000insurance cover for 250 HIV +ve Rs -15,000 assistance for
hospitalization & family following demise.

Health Insurance for Urban Dwellers

For 55 million slum dwellers in 489 cities-Under National Urban Health
Mission for 100,000 population .Insurance cover of Rs-40-50,000. By
premium of 600/person/annually. CASHLESS PAYMENT directly to hospital.

H:\Now, health insurance for urban slum dwellers.htm

H:\First health insurance policy for HIV launched- Insurance ne.htm
 Benefits in Health Insurance-
Excellent viable alternative to provide huge sum of money in
urgent medical needs. Ex –Traumas.
Even on long time payment of small sums, one time large
payments can be avoided.
Low premiums are affordable, not the large bills.
HI is a future payment of Medical Expenditure.
Few HIC also covers HIV.
More efficient & transparent than Public Health Care System
as expected..
 Mal Practices in Health Insurance
1)Adverse Selection.
2)Moral Hazard.
3)Dictate terms to hospital.
4)Can reject claims even on receiving PAF.
5)Denial of claims on reasonable/unreasonable grounds.
6)Less the pay, More they keep. Lack of transparency in terms &
conditions.
7)Un necessary delay In settlement of bills.
8)Interference with length of stay, medical procedure interventions, &
freedom of physicians.
9)Frauds by TPA & HIC.
10)Over billing
11)No coverage for Pre-existing conditions Ex- alcoholism, HIV. etc.
 Scope for Improvement
Integration of Insurance &health Care provision.
Care Oriented Health Insurance.
Generous Health Insurance for more sick individuals.
Appropriate Health infrastructure is an essential, & is
required to health care reforms.
Focus on health as against finances.
Centralized database, HI experience statistics.
Insurance approach must be designed around different
segment of population as per its mindset of population.
THANKS.