Are Recent Health Insurance Product Innovations Necessarily Good ?
Introduction
Health insurance business, is today perhaps the most rapidly growing segment in the Indian non- life insurance market, possibly after crop insurance. The reasons are many; foremost being rising treatment costs in secondary and tertiary hospitals. Increasing number of insurance companies selling health insurance products and aggressive marketing by the private players has further popularised health insurance products. Further, mass health insurance schemes by various State Governments / Centre have played a vital role in popularising health Insurance in India. Rashtriya Swasthya Bima Yojana (RSBY) was an innovation with introduction of Smart Card and for the first time in India, there was a health insurance scheme at national level. The recently launched Ayushman Bharat – National Healthcare Protection Scheme or NHPS, touted as world’s largest healthcare programme aims to insure 40% of the population, providing coverage in respect of all pre-existing diseases with portability across all States and Union Territories. PM Modi’s focus on health insurance can take health insurance to every household – which so far was restricted to only the urban upper middle class and those in the formal service industry. This announcement has, in all probability not only resulted in increased awareness on health insurance but has, obviously also raised the expectations of the masses manifold, from Insurers and the State.
Innovations in Health Insurance
These development will surely spur health insurance demand, and therefore the market potential for the insurance industry. The insurance industry will surely try to seize the opportunity, with ‘innovative’ health insurance products. Insurers are coming out with new products at a fast rate. Some notable positive changes in Health Insurance are:
- Introduction of products providing coverage for Outpatient Treatment (OPD), which is usually an exclusion in hospitalisation type (Indemnity) policies.
- Global health insurance policy targeting High Networth Individuals (HNIs). Global policies provide coverage to the insured all over the world, thus treatment can be taken in any country, and with this policy, one also avoids the hassle of going for an additional ‘Overseas Mediclaim policy’ for a trip abroad. This product offers real benefits in terms of convenience and financing treatment costs. No doubt, the premiums are high, but premium being commensurate to the benefits, the insured does not mind paying higher premium. Despite, the benefits the market is slow to accept this product.
- Super Top-Up products, with high deductibles have helped insureds get higher coverage amounts at substantially lower premiums and have indeed brought value to the customers.
- An important innovation by a PSU General Insurance company, as part of the hospitalisation type is coverage in respect of insured donating his organ, which is still an exclusion in most other health policies.
- The same PSU GI Company, launched a Hospital Cash policy in 2015, where the Sum Insured (i.e the Daily Cash Benefit) for women (irrespective of age) is 25% higher than the actual Sum Insured offered to the male insured of same age (and same premium).
- Introduction of ‘Medical Second Opinion’ in hospitalisation type of policies, which provides coverage for taking expert’s advice on-line / telephonically / in person from anywhere in the world.
Author
Rashi Yadav
Deputy Manager, The Oriental Insurance Co. Ltd, Delhi
Published : The Insurance Times, Decemeber 2018
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