Cashless Medical
Insurance: Q&A
The Insurance Regulatory
and Development Authority of India (IRDA) may not be keen to be involved
in this matter, as the issue is between the Insurance Companies and the
Hospitals.
The public sector insurance
companies in India had withdrawn the facility from July 1, 2010. Over 150
hospitals on their network were taken off the list.
The insurance companies,
which decided to scrap the cashless treatment facility are New India Assurance,
United India Insurance, National Insurance and Oriental Insurance.
The tussle between public
insurance companies and corporate hospitals in the city is turning out
to be a nightmare for medical insurance holders entitled to cashless treatment.
Big private hospitals in the city are receiving as many as 10 denials per
day from public insurance companies for pre-sanctioning of cashless treatment
facility. All are for
individual, not corporate
claims.
"On July 1, we received
the first cancellation for a cancer patient. Since then, we have been getting
as many as 10 denials per day," said Sanjay Rai, director, marketing and
customer management, Max Healthcare.
Insurance companies said
they were forced to withdraw the cashless facility because many private
hospitals overcharge patients with insurance.
"Expecting private hospitals
to provide treatment at CGHS rates is irrational," said Dr Sanjeev Bagai,
chief executive officer, Batra Hospital.
"What's the point of paying
premiums for a cashless policy if we have to pay during an emergency? "
said Vikas Pawar, a software engineer, whose father's knee replacement
surgery had to be postponed.
In an effort to end the
impasse, the Confederation of Indian Industry (CII) organised a meeting
between corporate hospitals, such as Apollo and Max, and four public sector
undertaking insurance companies — New India Assurance, Oriental Insurance,
United India Insurance and National Insurance Company, and General Insurance
Public Sector Association in Mumbai on Tuesday.
"In next one week, the
Third Party Administrators will individually meet big healthcare providers
in the country to discuss the finer financial details for restoration of
the cashless treatment facility," said A. Vaidheesh, chairperson, CII sub-committee
on accessibility, health insurance and the medical industry.
The CEOs and heads of about
15 private Delhi hospitals will meet on Wednesday to look for a temporary
solution. Till the time cashless treatment facility is restored, people
will be reimbursed their medical expenses.
State-owned insurance
companies plan to put a check on hospitals by asking them to standardise
charges on treatments. Some hospitals are inflating claims and overcharging
insurers, G Srinivasan, chairman and managing director, United India Insurance
Company, tells Shilpy Sinha. As against Rs 8,000 crore earned from health
insurance policies, the 22-odd insurers settled claims worth Rs 11,000
crore in the year to March 2010. Edited excerpts:
Have public sector general
insurers stopped cashless mediclaim in certain hospitals?
Hospitals have been charging
rates that are far in excess than what is justified. Our third-party administrators
(TPAs) have been talking to hospitals for a long time to rationalise the
charges. It results in customers exhausting their policy limits early.
Subsequently, the premium also goes up.
We are in the process
of talking to other hospitals to bring them under our network. We have
only classified hospitals. We don’t want erratic charges to continue. TPAs
are not able to negotiate well with hospitals. So, we took this step in
the interest of our health portfolio.
We have created a new
list and not added some hospitals so far. As and when the rates materialise,
we will add them.
Is health cover getting costlier?
There has been a big
jump in health insurance premium. We load the premium with the increasing
claim experience and also take health inflation into account.
There have been a lot
of complaints from senior citizens about unavailability of health cover.
What is your comment?
There is a problem in
writing health insurance for senior citizens. The claim ratio in this segment
for companies is 200 per cent. Companies are very selective while writing
health covers. But, the Insurance Regulatory and Development Authority
(Irda) has been pro-active in saying that you should treat them fairly
and even if you conduct medical tests, you should bear a part of the fees.
They cannot deny covers and can load premium to a certain extent. There
are a lot of restrictions, which are strictly followed by us. If there
is any aberration, it can be brought to our notice.
Insurers are still offering
huge discounts. Where will the prices stabilise?
You can divide the entire
portfolio into mega policies, mid-cap policies and smaller policies.
Large policies were detariffed
10 years back. In mid-cap policies, there was certainly a substantial drop
in rates but now there is a tendency for rates to go up, especially depending
on the claim experience.
If you take our company,
the fire loss ratio was around 49 per cent and the engineering loss ratio
was 15 per cent. People said the rates would stabilise in two years. It
may take up to three to four years. But ultimately, each risk will get
a price. There are some risks like hydro-electric and group mediclaim,
which no one wants to write. Rates have gone up on a client to client basis.
Is it viable to continue
the third party motor pool or you want it to be scrapped?
The remedy is to charge
the right price. The price was so far borne completely by public sector
companies. But if prices are not enough, the solution is to either charge
actuarially determined prices, which can be governed by the regulator,
or open up so that companies know what to do. The industry has proposed
to Irda to prescribe obligations on this, so you can always cherry-pick
or pay penalty and not write it. That may not be the complete solution.
So, we would like the pool to continue as long as pricing is adequate.
How do you look at State
Bank of India General’s entry into the market? Is it going to lead to a
rate war?
The market is big. Penetration
seems to remain at a low level because we are growing at the same pace
as the economy. We are adding new customers and the business size is increasing.
So, new players are welcome. A few companies may lose their bancassurance
partner. A new player is aggressive in pricing as it has to build a critical
mass.
What kind of growth are
you expecting this year?
Last year, we reached
Rs 5,200 crore and this year we will reach Rs 6,000 crore. It will be 15
per cent growth. We are not going to run after growth. Our retail business
is around 70 per cent while the rest is corporate. We are leaders in social
and rural sectors, which contributes 15 per cent of the total premium.
We are looking at increasing our share in this segment.
|