HEALTH INSURANCE

Dr. [Link] KUMAR

Professor, Department of Management
Pondicherry University
Karaikal Campus, Karaikal – 609 605
drsasenthilkumar@[Link]
HEALTH INSURANCE
Health insurance is a type of insurance coverage that
covers the cost of an insured individual's medical and
surgical expenses.

Health insurance to mean any form of insurance whose

payment is contingent on the insured incurring
additional expenses or losing income because of
incapacity or loss of good health.
Health Insurance – OECD 2004
◼ Health Insurance is a way to distribute
the financial risk associated with the
variation of individual’s health care
expenditure by pooling costs over time
(pre-payment) and over People
(pooling).
- The Organisation for Economic Co-operation and Development
(OECD)
ORIGIN OF HEALTH INSURANCE
The earliest forms of health insurance may have
been based on the ancient Chinese custom of paying
the doctor while in good health and discontinuing
payment during periods of illness. India also had
similar system in earlier days. The development of
health insurance in existing form in India is based on
pattern followed in Europe and America

◼ Source: Health insurance manual, The New India Assurance Company

Limited,87,[Link],Fort, Mumbai – 400001, May 2005
HISTORY OF HEALTH INSURANCE AT
WORLD LEVEL

◼ The concept of health insurance was

proposed in 1694 by Hugh and Elder
Chamberlen from the Peter
Chamberlen family.

◼ Source: [Link]
HISTORY OF HEALTH INSURANCE IN
INDIA

The first step in social insurance

legislation in India was taken when the
Workmen's Compensation Act
covering about three million workers
was passed by the Central Government
in 1923.
The Employees State Insurance
Act 1948
◼ The Act applies to all factories including factories
belonging to the government other than seasonal
factories.
◼ The Employees’ State Insurance Act applies only to
those factories which employ 20 persons or more.
◼ The Employees State Insurance Act was amended
in 1951
◼ It was first implemented in Kanpur and Delhi and
seven industrial towns in the Punjab on May 17,
1953.
Central Government Health
Scheme (CGHS)

The Central Government Health

Scheme (CGHS) was introduced in
1954 as a contributory health scheme
to provide comprehensive medical care
to the central government employees
and their families.
Mediclaim Policy
◼ In 1981, the Apex Body of Public Sector Insurance
Companies i.e. GIC designed a limited cover for
individuals and families for covering their
hospitalisation needs.

◼ This was named a mediclaim policy in the year

1986.
◼ It became operational in 1987.

◼ The scheme was modified in 1991 and 1996 in

the light of experience and suggestions received from
the insuring public and medical fraternity.
 SPECIALISED INSTITUTIONS
Standalone Health Insurance companies in India
◼ Aditya Birla Health Insurance Co. Ltd.

◼ Apollo Munich Health Insurance Co. Ltd

◼ Manipal Cigna Health insurance Co. Ltd. (formerly known

as CignaTTK Health Insurance Company Limited)
◼ Max Bupa Health Insurance Co. Ltd

◼ Reliance Health Insurance Ltd.

◼ Religare Health Insurance Co. Ltd

◼ Star Health & Allied Insurance Co. Ltd.

 SPECIALISED INSTITUTIONS
Standalone Health Insurance companies in 2023
1. Aditya Birla Health Insurance Co. Ltd.

2. Care Health Insurance Ltd.,

3. Manipal Cigna Health Insurance Co. Ltd.,

4. Niva Bupa Health Insurance Co. Ltd.,

5. Star Health & Allied Insurance Co. Ltd.

MAJOR HEALTH INSURANCE PRODUCTS
IN INDIA

◼ Hospitalisation indemnity products

◼ Individual Mediclaim Policy
◼ Group Mediclaim Policy
◼ Overseas/International Mediclaim Policy
◼ Critical illness
◼ Micro Health Insurance
◼ Senior Citizens’ products
◼ Personal Accident Policy
Innovative Health Insurance
Products
◼ Daily Hospital Cash Benefit
◼ Disease Management covers
◼ High – Deductible hospital Indemnity covers
◼ Investment products and Health Saving
Accounts (HSAs)
◼ Outpatient Coverage
◼ Co-payment
 Hospitalisation indemnity
products
◼ This cover is provided on an indemnity basis
◼ These product protect individuals from the expenditure
they may need to incur in the event of hospitalization, and
in most cases, also for specific number of days before and
after hospitalization
◼ But not for expenses not involving hospitalization
◼ waiting period of 30 days - 12 to 48 months for specific
diseases.
◼ New features are being introduced in indemnity products
like daycare surgeries which do not require hospitalisation,
coverage of maternity etc.
Overseas Medical Insurance
◼ These policies provide protection against
health contingencies occurring during
international travel, loss of checked baggage,
loss of passport and cover for a flight
cancellation etc.
◼ It is a short term plan (duration cover often
in days and weeks)
◼ These products are expensive, hence demand
is not very high.
 Critical illness
◼ Dreaded diseases like cancer, heart attack, brain
hemorrhage, coma, or Major organ failure -Treatment of
these diseases requires very high expenditure and the
hospitalisation products usually do not have such high
sum insured.
◼ These diseases may require long-term nursing care or
home-based nursing which will require further
expenditure.
◼ These policies cover high sum insured than usual
indemnity products.
 Micro Health Insurance
◼ Micro insurance products were launched with a
view to cater lower income group population and
poor strata of the society.

◼ It is more feasible and cost-effective to offer these

products through NGOs and voluntary
organisations who can purchase this product in
bulk for their members.
 Senior Citizen Products
◼ “Senior citizen” means any person who is 60 or
more years of age as on the date of
commencement of insurance policy.
◼ These products allow into entry till a higher age
80 years and can be renewed up to 80 to 90
years.
◼ Since the incidence of claims in a higher the
insurance companies charge very high rate.
Personal Accident
◼ This policy will pay out an income or a lump sum in
the event of disability, dismemberment or death,
caused by an accident.
Types of Disablement:
➢ Permanent total Disablement
➢ Permanent partial Disablement, and
➢ Temporary total Disablement
◼ The amount of compensation depends on the sum
assured chosen and benefit.
Health Insurance - LIC
◼ LIC Health Protection Plus
Commercial.mp4
 Daily Hospital Cash Benefit
◼ This is an innovative product under which instead of
paying full treatment expenses of the policyholder the
insurers pay a fixed daily allowance to cover incidental
cost associated with hospitalization – travel, stay etc.
◼ In daily Hospital cash plan principle of indemnity does not
apply strictly.
◼ Here the policyholder is not required to choose the sum
insured but instead he can select daily allowance
◼ This plan can be taken as a stand-alone product and also
as a rider with Hospital indemnity policies.
High deductible Hospital
indemnity cover
◼ These are also new products recently
introduced in the market. These are meant
for persons who are having hospitalisation
policies with low sum insured.
◼ These policies provide top of coverage
beyond deductible chosen at proposal stage
which may range from Rs.1 lakhs to Rs.5
lakhs.
Disease management
covers
◼ Under this category insurers provide
cover to patient who are already
suffering from chronic diseases like
diabetes and cover is provided for some
medicines and regular laboratory tests
on OPD basis in addition to other
coverage.
Outpatient coverage
◼ In all hospitalisation indemnity products coverages
are only provided if the policyholder is hospitalised
for at least 24 hours.
◼ Though insurers are offering in some policies benefit
of daycare surgeries where they may not undergo
hospitalisation but due to increased chances of moral
hazard, the product is still in development stage.
 Investment products and
health savings accounts
◼ This is a new category of product which offers
both hospitalisation and savings.
◼ A part of premium collected under the policy is
used for risk coverage for paying claims and the
other portion is accumulated as savings under
the policy.
◼ This type of products are mainly offered by the
life insurers
Mediclaim Policy (Individual)
◼ The Policy provides for reimbursement of
hospitalisation/ Domiciliary hospitalisation
expenses for illness/disease suffered or
accidental injury sustained during the policy
period.
Mediclaim Policy Covers/Pays
◼ Room, Boarding Expenses in the Hospital/ Nursing home
◼ Nursing Expenses
◼ Surgeon, Anesthetist, Medical Practitioner, Consultants
Specialist fees
◼ Anaestheisa, Blood, Oxygen, Operation Theatre Charges

The Claims should not exceed the Sum Insured

Reimbursement is allowed only when treatment is taken in
a hospital / Nursing home satisfies the criteria specified in the
policy.
Benefits
◼ Medical Treatment
◼ Pre and post hospital treatment
◼ Treatment for diseases – Asthma,
Hypertension, etc.,
◼ Occurrence of same illness after a lapse of 45
days will be considered as fresh illness
◼ Tax-benefit under sec.80D of Income Tax
Exclusions
◼ No claim is payable during first 30 days
◼ During the first year of the operation- Expenses on
Hernia, Piles, Cataract etc.,
◼ Plastic surgery, Cosmetic or aesthetic treatment
◼ Cost of spectacles , contact lenses & hearing aids
◼ Dental treatment
◼ Venereal disease
◼ AIDS
Exclusions
◼ Intentional self injury and use of
intoxicating drugs / alcohol
◼ Expenses on Vitamins and tonics
◼ Treatment arising from pregnancy and
child birth
◼ Naturopathy treatment
Discounts
◼ A discount in the total premium is
allowed to a family comprising the
insured and any one or more of the
following
◼ Spouse
◼ Dependent Children
◼ Dependent Parents
Conditions
◼ Any claim with full particulars shall be sent to TPA within 24
hours of emergency hospitalisation
◼ All claim documents must be filed with the TPA within 7 days
from the date of discharge from the hospital.
◼ Any medical practitioner authorised by the TPA/
Company shall be allowed
◼ All treatments shall have to be taken in India and claims are
payable in Indian currency.
◼ If the TPA/Company shall disclaim liability for any claim and if
the insured shall not with in 12 months –claim shall be deemed
to have been abandoned.
PRICING OF POLICY FOR DIFFERENT AGE GROUPS FOR DIFFERENT SUMS INSURED

Rs.200,000 Rs. 200,000

Rs.50,000 Rs. 100,000 Rs. 50,000 Rs. 100,000
Company (age (age
(age 46-55) (age 46-55) (age 56-65) (age 56-65)
46-55) 56-65)
The New India Assurance
1,060 2,014 3,869 1,272 2,385 4,558
Company
Oriental Insurance (Medium) 1,265 2,447 4,680 1,799 3,483 6,687
National Insurance (Medium) 1,055 2,040 3,900 1,199 2,323 4,458
Bajaj Allianz (Health Guard) *1,629 2,793 5,586 NA NA NA
IFFCO Tokio (Individual
1,094 2,116 4,047 1,437 2,783 5,343
Medisheild)
Cholamandalam(Health
1,138 2,255 4,002 1,378 2,725 4,852
Insurance)
Royal Sundaram (Health
NA 2,230 4,049 NA 3,211 5,830
Shield)
Reliance General (Reliance
1,055 2,040 3,900 1,199 2,323 4,458
Medium)
#Star Healthand Allied (Medi-
1,320 2,447 4,593 NA 3,000 5,300
Surahsha)
ICICI Lombard (Family
NA *5,871 *6,180 NA NA NA
Floater Plan)
Standard Devision 108.77 258.07 570.64 226.27 431.79 781.14
% difference between highest
25.12% 38.70% 44.38% 50.04% 49.94% 50.00%
and lowest
Thank you