HEALTH INSURANCE

&
THIRD PARTY
ADMINISTRATION

Guided By- Presentation By-

Dr. Sunil Chandiwal Neha Bhaker
Poonam Dehariya
 What is Health
Insurance ???
Health insurance means risk coverage to provide
financial shelter in the event of medical treatment
incurred out of a sickness.

Health insurance is one of the fastest growing

areas in the insurance industry and is expected to
grow to Rs.30,000 crores in 5 years from the
current Rs. 8,100 crores.
 Why is Health Insurance
important?
 Rising medical costs
 Sharing of health related risk
 uncertain hospital bills
 Expensive/quality health care services
 Money value – Sick Vs Healthy
 Family health insurance
 Tax benefit
 Productivity of workforce
 Removes some of the burden from the state
 Keeping pace with the customer needs while
achieving profitability
 The Indian Health Scenario
 Total Expenditure on health in India is nearly 6% of the
entire GDP
 Private health care expenditure is 4.25 % of GDP.
 At present the insurance coverage in India is negligible.
 Over the period the private health care expenditure has
grown at the rate of 12.84 % per annum.
 Indian health insurance industry stands at INR 8,100
crores with only a small Section of the total population
(around 2%) being covered so far.
 CAGR of around 35 % (FY2002-08)
Low penetration of Insurance and Low Govt. expenditure in India . . .
Has resulted in high Out-of-Pocket spend
Source: Business World (India) – Oct 2007
Perceptions about Health
Insurance in India
What is INSURANCE ? Buying a Promise
 Health Insurance: Key
Stakeholders
Distribution channel
partners
Health Media /
Providers Telecom

Customer
NGOs / SHGs /
MFIs Health Insurance
Industry Government

Insurance
TPAs companies
IRDA -
regulator
 Introduction to Health
Insurance Policy
 Provided by both private and public Cos.
 Voluntary medical insurance program that provides
for reimbursement of hospitalization/domiciliary
hospitalization expenses/disease suffered/
accidental injuries sustained during policy period.
 Includes :
 Family floater (for families) mediclaim.
 Health insurance or mediclaim for individuals and for senior
citizens.
 Overseas travel insurance.
 Mediclaim Policy
 Instituted in 1986.
 Eligibilty criteria - 5 to 80 years of age.
 Premium – depends on age and sum insured.
 Benefits – hospitalization benefits from Rs.15000 to
a maximum of Rs. 5,00,000.
 Providers – any hospital with 15 beds or more
 Exclusions – any pre-existing disease
 Payment mode – reimbursement of bill by Co. or by
TPA is also possible. (premium – 6%)
 Need For H.I Policy
According to Money Digest 2003:

 1 in 3 person will develop some life threatening

cancer.
 1 in 4 person will contact heart disease before they
retire.
 1 in 20 person risk the chance of having stroke
before the age of 70
 Need For H.I Policy contd…
According to World Bank Report:
 85% of the working population in India do not

have Rs.5,00,000 as instant cash.

 14% have Rs.5,00,000 instantly but will

subsequently face financial crunch.

 Only 1% can afford to spend Rs.5,00,000 instantly

and easily.
 99% of Indians will face financial crunch in case of

critical illness.
Hence the need for Health Insurance.
 Who does not need H.I???
 One who is covered by his employer.

 One who can make immediate payment of

hospital bills of the order of Rs.1,00,000 or
Rs.2,00,000 or even Rs.5,00,000 need not
to go for health insurance.
What H.I Policy covers in
India?
 It covers hospitalization when a patient
is in hospital for more than 24 hours
due to:
-Illness
-Accident
-Surgical requirement
COSTS COVERED ARE:
 Room, boarding expense in
hospital/nursing home.
 Nursing and ICU expenditures
 Fees of healthcare professionals
involved in the treatment
 Anaesthesia
 Pre and post hospitalization expenses.
What H.I Policy in India
does not cover?
 Treatment of illness at home by consulting
doctor in your locality or even in hospital.
 Health check-ups,home health services.
 Long term care/rehabilitative care
 Preventive healthcare
 Dental and vision services
 Outpatient services
 Health Insurance Plans
Health Insurance
Plans

Community Based /
Private Social Micro Insurance
Existing Schemes Can Be
Categorized As:
(1) Voluntary health insurance schemes or
private-for-profit schemes;

(2) Employer-based schemes;

(3) Insurance offered by NGOs / community

based health insurance (CBHI), and

(4) Mandatory health insurance schemes or

government run schemes
(namely ESIS, CGHS).
 THIRD PARTY ADMINISTRATION

Insurance
TPAs are BPO of company
insurance companies and
are responsible for premium reimbursement

coordinating all aspects TPA

of claims arising due to
health insurance policies.
Policy
Hospital
Holder
Health services
 Services provided by TPA
 I.D Card
 24 hours helpline for customer services
 Providing list of hospitals in network
 Claim processing during admission of
policy holder
 Enquiry
 Scrutinizing bills
 Functions Of TPA
 Coordinates with insurance co. & hospital
 Maintains all records
 Enrollment processing
 Issues authorization forms to the hospital
 Makes the payment to the hospital
 Facilitates claim settlement
 Fund administration
 Benefits management
 Procedures Facilitated by TPA
 Cashless hospitalization

 Reimbursement

 Enhancement

 Claim settlement
CASHLESS You require hospitalization

HOSP.
Network hospital Non-Network hospital

Planned Emergency

TPA scruitinizes & on case to

case basis authorizes mediclaim

Approval granted & you get Approval not granted ,no

cashless hospitalization cashless hospitalization but
claim papers can be
You get treated & prior to discharge submitted for reimbursement
complete claim form and sign all bills

Pay all non-medical bills by

Planned & emergency bills
yourself
are paid by you. claim to be
TPA pays bills of approved sumbitted to TPA with
amount to the hospital original documents
REIMBURSEMENT
Patient pays total bill to the
hospital

After discharge submits all the original

bills+original discharge summary+original
investigative reports to TPA

Claim studied by TPA

Patient is reimbursed within

30-60 days
 ENHANCEMENT:
In case the bill exceeds the approved
amount, the ward coordinator sends the
final bills and documents to the
respective TPA for enhancement.
CLAIM SETTLEMENT
All documents of patient
are sent to TPA

TPA studies the claim

No discrepancy Discrepancy found

Queries on them are

Claim settled within asked
30-60 days
Resolved with
Not resolved
hospital

Claim disapproval or
denial
 PROBLEMS :
FACED BY TPAs :
 Lack of proper communication

 Increased bill and treatment cost

 Hospitals show negligence in filing the claim procedure

 Lack of trained staff and professionals

FACED BY HOSPITALS :
 Lack of awareness of the procedure

 Issue of pre-authorization letter not within specified time

limit
 Claim reimbursement is also unnecessarily delayed in some

cases.
 Health Insurance – Focus
Areas
 Health Insurance - potential to
become a Rs.25000 crores industry
by 2012.

 No. of Elderly People in the

Developing World will TRIPLE in
25yrs. (WHO)

 In India, the no. of people above 60

yrs is about 8% today, with that no.
expected to hit 21% by 2025. (Asia
Insurance Review)

Source: NIA Library

 Health Insurance – The Way
Ahead

 Creating awareness on Rights

& Responsibilities
 Standardization of Cost
 TPAs
 Health Providers
 Increased Tax benefit
 Removal of Service Tax
 Health Insurance – The Way
Ahead contd…

 Gradation of Health service providers

 Pool for Senior Citizen
 Renewability / Portability
 Compulsory Health Benefits for organized sector
 Government role on mass healthcare initiatives
Constraints In Extending
Coverage
 75% of the population works in the
informal sector
 25% of the population below poverty
line
 70% of the population in rural areas
 Under insured country
 Health insurance an ill understood
subject
 FRUSTRATIONS IN THE
SECTOR
Cashless Treatment
Policy
Third Party
Holders
Administrator

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Insurance
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COST DRIVERS IN HEALTH
INSURANCE
 Technology / Specialization
 Prescription Drugs
 Medical Inflation
 Moral Hazard / Adverse Selection
 New treatments
 Unnecessary treatments
PROBLEMS FROM INSURERS
 Policy condition problems
 Customer Ignorance
 Pre-Existing Condition Issues
 Disputes with hospitals / insured
 Delays
 PROBLEMS FROM TPAs
 Lack of Infrastructure
 “There are no holidays in Health care” yet
offices not open on holidays, telephone
access unavailable, etc
 No qualified doctor / staff
 Delay in claim-settlement
 Deduction in bills without basis
 Increased paperwork
 SOLUTION :
 Insurer
 Designing a less complex products
 Clarity in policy terms, conditions & exclusions
 Efficient system for claims processing
 Need for quicker services. E.g.: Toll free no's, cashless,
quick response
 Expense analysis on a regular basis
 Product innovation
 Efficient training of sales force
SOLUTION :
 Policyholder
 Pay attention to policy conditions

 Read the exclusions and limitations

very carefully
 Compare premium costs, deductibles,

co-payments
 Take an informed decision
SOLUTION :

Third party administration

 Proper infrastructure
 Speedy claim settlement process

 Less paper work

 Efficient staff.
 SOLUTION :
 Regulator/Government
 Come out with health insurance regulations
 Centralized data base for health insurance
experience statistics
 Provider rating
 Ensure that a decent portfolio of health
coverage represent the rural sector
 Guard against ill effects of privatization
 Further tax incentives
 Compulsory savings towards health care
 Recent Initiatives Of IRDA
 Committee to formulate regulations
 Pure health insurance products
 Allowing the formation of an stand alone
health insurance company
 Renewability/policy renovation
 Senior citizens
 Data management/data pool
 Third party administrators.
 Recent Concepts in H.I
 Day care surgeries/
treatment covered
insurance.
 Co-payment concept
 Health insurance through
credit card.
 Micro insurance.
Challenges in Health Insurance
 Medical advance, both a challenge & also
impediment
 Increase in health care cost
 Ageing population
 Acute shortage of trained personnel ranging
from doctors to health care administrators
 New emergence and resurgence of old
diseases
 CONCLUSION
 Creating awareness & meeting the
demand for health care & financing
 Creating modules for aligning the
services of all concerned
 Focusing on enhancing affordability &
reducing costs
 Rapid coverage and health benefit to all
WANT TO KNOW MORE???
www.healthinsuranceindia.org
www.expresshealthcare.in
www.google.com
Bussiness world
“While buying health insurance one is
also buying peace of mind, when one
may need hospitalization”

Thank You