Health insurance providers in India are to find more demand from the geriatric segments for old age and long term care policies in the near future. Need for mental care and critical illness / trauma care policies as well as insurance coverage for AIDS, organ transplants, infertility treatments, dental treatments and life style diseases are all on the rise, foresees healthcare consultants.
Speaking at a CII - Indian Health Federation conference here recently, Aloke Gupta, a leading healthcare consultant said that the major reason for low penetration of healthcare insurance in the country was lack of awareness. According to him, the general public perceived that health insurance as cumbersome with lot of pre-existing conditions and other exclusions. Lack of provider network, absence of cash up-front payment, complicated claims process, inadequate servicing, high claim ratios coupled with inadequate pricing and over utilization of the services by providers were also pointed out as reasons for low penetration.
He said that the med-claim ratio in the country was as high as 93% in 2001-02 in India. This was just 73% in 1997-98. "About 55% of the premium came from group policies, with metros accounting for 75% of group and 42% of individual premium", he said. In his observation, northern and western states account for over 60% of total premium.
Speaking about the future trends, he said that large groups or corporates are to self-fund employee health benefits through Administrative Services Only (ASO) arrangements. There would also be well-defined performance parameters for service rendering incentives for claims controls, he said.
Gupta said that in addition to pure or managed indemnity policies, purchasers would demand products that integrate healthcare financing and provisioning. Chances of providers moving into the new realm of healthcare delivery involving risk sharing and rationalization of the utilization of health services and promotion of 'wellness' regime were also highlighted.
Introduction of Medical Savings Account (MSA) as instrument of healthcare financing for catastrophic conditions of post retirement was also pointed out as a possibility. MSA will have special significance for employees with uncertain or low incomes as it will imbibe a sense of ownership in members and removes to some extent the moral hazard in the relationship with providers, he said.
According to him, the government has an important role to play in ensuring proper health care to the citizens. "The government should fund preventive care, provide insurance cover for the old and the poor and devise mechanism to restrict subsidizing healthcare for those who can afford," he said.
Encouragement of regional level bodies as pure insurers or integrated providers, development of a new set of regulations for health insurers as well as integrated health providers and addressing the issues of portability, defined contribution fund management and central depository on introduction of MSA were some of the suggestions put forth by him in putting an effective regulatory mechanism in place. Need for encouraging new health insurance players by appropriate regulations, development of new health insurance products and introduction of measure to improve efficiencies in the health insurance market by introducing rating and credentialing of health providers were some of the other suggestions made.