Health Insurance has been realized as an instrument for the health of the economy. If the people of the country are healthy, they can contribute significantly to the economic development of the country.
The health insurance industry would provide protection to social development. The insurance industry should come forward to provide health to the masses like life insurance and property insurance.
The Government provisions for health have not succeeded for want of initiative on the part of government officers and beneficiaries. It is hoped that commercial basis of health insurance will be more suitable for the healthy development of people.
There is need of products, designs, structural facilities and sustainability of people. There is need of products, designs, structural facilities and sustainability of insurance products. The adequate environment is to be developed for the introduction and development of health insurance.
Health insurance requires sufficient information and data for development of a good product, proper pricing, and health management. Many insurers are interested in providing health insurance provided consumers are properly educated in this area.
Recently with the break of joint family system, the need of health insurance is more thrusting. Maintaining health responsibilities on a commercial basis to insurance companies, economic growth, human resource development, and prosperity will enhance in future.
There is need of well-designed health insurance product that may protect family savings in case of unexpected medical charges. People are interested in higher achievement than paid by them in the form of premium.
The insurer, therefore, is expected to invest the premium money is such a way as to earn sufficient money for meeting the expenses of insurance and insurance claims. The insurer has to meet the challenges of expenses and health services. The insurance over should be reasonably comprehensive without counterproductive gaps.
Mediclaim policies provide coverage for medical services rendered during hospitalization. But, there is need of a broader set of services. There is need of outpatient costs because a large number of persons are treated satisfactorily without being admitted to the hospital.
Health insurance should cover all such types of expenses. The third need of health insurance is preventive measures by providing health education and quality life. The premium may be reduced on such types of proposals.
Additional incentives should be provided for purchasing health insurance. The tax exemption on health premium and medical saving accounts are few of the examples of financial incentives for health insurance. The alternative choices should be there for selecting suitable hospitals nearby the insured persons. There is need of new products of non-patient services. The premium should be competitive and fair to the policyholders.
Educating to consumers about health consciousness is essential in health insurance. It increases people’s awareness of diseases, cost of treatments, alternative treatment options. People should know equal about health and health care services.
Employers should be motivated to provide health cover to their employees. Like group insurance and group superannuation; employers should purchase polices for their employees and pay the premium. It enhances the images of the organization.
Cost Effective Health Insurance
The product of Health Insurance should be designed in such a way as to reduce a cost of premium. The insurer should design the product to attract more customers. People should get incentives to purchase health policies.
Low premium rate attracts a larger number of persons to purchase health policies. The developed nations have popularized the health insurance as the insurers meet the most expensive treatments. People are ready to pay higher premium to meet the higher cost of medical bill.
Investment cum Health service product
In India, people are interested mainly in investment. They went that health protection should be part of savings. While saving schemes are spreading Health Insurance should be linked with that. If people get health cover with a slight deduction of money from their saving rate, they would not mind as it becomes a regular feature after some time. They will fell that health cover is given free of cost.
Product of Causal and Usual Risks
Health product should cover the casual risks such as epidemics risk and claims uncertainty risks and usual risks e.g., overhead expenses, interest and other business risks. With the past experience of claim payment, insurer should design a number of suitable policies to meet different requirements of the customers.
Product design and pricing are key factors for enhancing insurance. High price reduces business and less price increases the loss of insurer. Therefore, proper balance is established with the help of data analysis.
Trust and confidence
The insured should have trust and confidence in the insurance company that premium rates are at the lowest possible and they will get the claim amount at the time of need. The insurer should influx the confidence of solvency, proper risk selection, reasonable of a cost of operation and timely payment of claims. Solvency plus financial and operational performance monitoring will be essential.
The structural facilities are provided by the government. Regulatory authorities properly guide the insurer to design insurance for health care. The insurer should feel free to approach hospitals, doctor’s physician and others for getting adequate information.
International classification of deseases-10th Revision (ICD-10) and procedure Classification System (PCS) are a good guide for health care and developing structural facilities of health insurance.
The health insurance reduces the charges for health care. The structural facilities of health care are told to the insured on websites and electronic format. The insurer should assure that reimbursement for their services are fair and sufficient. It will cover all the costs of medical treatment. The possibilities of litigating are minimized to provide confidence to the insured’s.
Sustainability of the Products
The insurance products should be sustained for developing the trust and confidence amongst the policyholder. The insurer has to adopt proper management of funds, pricing, and product-designs and follow the regulatory features.
Facilities of electronic data are crucial for long-term success of the insurance industry. It will improve efficiency of the employees who will provide quality services to the insured’s. The insurers maintain risk capital for meeting the contingency of unexpected losses. The scope of insurance cover is expanded to include impatient, outpatient facilities, physicians and pharmacy charges.
Health insurance as a class is very young in the Indian insurance. But, it occupies the third place among the different non-life insurance classes. It has registered more than 50% rise in 2006-2007. While non-life insurance business increased only by 10%.
However, health insurance has not received more attention because the customer’s awareness is very low. The insurers should make the classes very explicit and explain the exclusions in detail. The role of Third party administrators should be effectively ensured by them. They should take care of the customers interests.
Retailing Health Insurance
Retailing health insurance requires product innovation channel innovation, risk based pricing and prevention.
Individuals face a number of exposures driven by health and health-related events and costs, the risks of which they can bear to differing degrees. These risks range from low ticket-size expenses (e.g., for routine care) to higher ticket-size discretionary expenses (e.g., for elective surgery), catastrophic expenses (e.g., due to major illness, accident), end-of-life care expense (e.g., due to life threatening illness), expenses related to chronic diseases and income risk (e.g., disability).
Health insurance products are likely to require additional distribution channels beyond the dominant agency force. Based on the U.S. experience, several innovations hold promise:
- Direct-response channels. These include a captive sales force, call centers, the internet, direct mail, and television commercials. A leading U.S. player primarily uses the Internet, for example, to sell product aimed at consumers aged 18 o 29 (“young invincible”) who think they do not need health insurance.
- Retail stores, Health insurers in the U.S. are now offering health benefit products through leading retail and pharmacy chains. One of the biggest success stories for payers has been selling Medicare-related products to the elderly through bricks-and-mortar retailers.
- Affinity-marketing relationships, Health insurance have entered successful affinity partnerships with diverse players.
Product and channel innovations alone are not enough, Health insurers need to understand the risk profile of individual and their ability and willingness to pay, which often varies by sement and channel.
Actuaries could determine now consumer behavior would change a priori and build that into product pricing rather than wait for years to study observed behavior, they could benefit from substantive gains. Insurers in the U.S. have leveraged detailed data to build sophisticated actuarial models that are more powerful by a factor of over 1,000 relative to competitors.
Insurance Coverage beyond Hospitalization Benefits
Private sector group and individual health insurance coverage in India today focuses on hospitalization benefits with a limited sum assured. While this provides valuable coverage, preventive care techniques are important to improve medical outcomes and to provide cost-effective health insurance.
In India, there remains a huge need for simple primary prevention that largely falls into public domain. However, the private health insurance can make important contributions at the secondary and tertiary prevention levels.
Primary vs Advanced Prevention
In assessing the cost-benefit equation of a number techniques and determining who is best positioned to provide these services it is helpful to distinguish between three levels of preventive care:
- Primary prevention: entails reduction in the level of one or more identified macro risk factors to reduce the probability of the initial occurrence of a disease. Examples include rod safety, clean water, food fortification and vaccinations, which are typically Government-led.
- Tertiary prevention: consists of ongoing interventions aimed at decreasing or delaying the severity and frequency of recurrent events of chronic or episodic diseases. Example includes family-oriented disease management therapies for cardio-vascular diseases, or disease management programs for diabetes patients, where again the private sector can play an important role.
WHO statistics indicate that & million people prematurely every year in India from diseases that are relatively easily preventable, if certain primary preventive measures were adopted by the public authorities.
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