Health insurers must update customers about list of hospitals

New Delhi: Health insurers offering cashless facility have been directed to keep their customers updated about any change in the list of hospitals as well as about alternative options in the vicinity, Parliament was informed on Friday.

Citing an IRDA report for 2008-09 and 2009-10, Minister of State for Finance Namo Narain Meena in a written reply informed the Lok Sabha that cashless basis of settlement is costing more for all type of diseases.

He was replying to a query whether the cashless health insurance facility was being misused by hospitals.

Meena further said to ensure that interest of policy holders is not adversely affected when the insurers make changes in their partner network of hospitals, directions have been issued to them.

"...It has directed all insurers... to inform the policyholders at all times, the nearest possible alternative hospitals, where the cashless facility is available and the conditions thereof," he added.

Insurance companies negotiate rates for certain medical procedures and normally include in the network only those hospitals, who have agreed to the rates.

Last year customers were left in a quandary following a deadlock between the four PSU insurers and major private hospitals over resumption of cashless facilities.

The four PSU insurers -- New India Assurance, United India Insurance, National Insurance and Oriental Insurance -- have suspended the cashless service at select hospitals from July 1, 2010, alleging over-billing by them.

Later on the Insurance Regulatory and Development Authority (IRDA) came out with a guideline asking insurers to constantly inform customers about the hospitals which offer cashless treatment.

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Soon, your visit to doctor too could be covered by insurance

A government health insurance scheme providing hospital cover to over 23 million poor households will also pay for visits to the doctor and medication if pilot projects currently underway prove feasible. The labour ministry, in collaboration with the International Labour Organisation (ILO) and ICICI Foundation , has launched the first Rashtriya Swasthya Bima Yojana (RSBY) pilot project in Puri, Orissa, this month, covering both outpatient and inpatient care for the beneficiaries of the flagship scheme, which has been extended beyond BPL families to unorganised sectors such as construction workers, beedi makers, domestic workers and street vendors. 

Under the the proposal, RSBY beneficiaries can make 10 free visits a year to empanelled hospitals and doctors and get free medicines. The pilot scheme entitles empanelled doctors and hospitals in Puri to insurance claim of Rs 50 for every visit by RSBY beneficiaries. It covers medicine costs too, though up to a limit that would be prescribed later depending on bids put in by insurance companies. To ensure that medicine costs do not push up the insurance cover, the labour ministry is working with the National Rural Health Mission on a list of cheap generic medicines that the doctors will have to provide.The extension of the scheme is feasible as the government would have to give only about Rs 200 more annually for each beneficiary family, Swarup said. This would be over and above the premium charged currently by insurance companies for the RSBY scheme. It varies in each state, averaging around Rs 500 per family. What needs to be tested, however, is the practicality of implementing the scheme because it would be more difficult to monitor than the hospitalisation scheme as here patients would walk away after being treated. When a patient comes for consultation, his card is swept in the scanner and his ailment, diagnosis and medication fed into the reader. This data is then transmitted to the central server and monitored by insurance companies and the government. The patient is given a printout of the details of visit and treatment. The RSBY covers a family of five for a token registration fee of Rs 30 and provides annual hospitalisation cover of Rs 30,000.


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IRDA defers health insurance portability launch to October 1

Insurance regulator IRDA has postponed the implementation of portability of health insurance products by three months to October 1. 

Portability will help an insurance policy holder to switch from one insurer to the other. The policy holder can carry the existing benefits from previous insurer. Insurers must have historical data on policyholders' health related details of claims to ensure that portability is available in a smooth manner to the policyholders, IRDA said. 

The regulator is setting up a web-enabled facility on which insurers can feed all relevant details on health insurance policies issued by them to individuals which will be accessed by the new company to which a policyholder wishes to port his policy. 

On Friday, chiefs of non-life insurance companies met IRDA Chairman J Hari Narayan to discuss issues related to the modalities of portability. Insurers conveyed that they need more time to process the policy. 

"There are some operational issues. Also we have conveyed that more time should be given to know the medical history of the policyholder," said the head of an insurance company who attended the meeting.

Non-life insurance like motor and health will gradually get costlier: Irda

The Insurance Regulatory and Development Authority (Irda) on Monday said that policy holders will gradually have to pay more for motor, health and other general insurance covers as costs would go up due to companies setting aside higher funds for claim settlements. "I think the demand and supply position in the non-life industry will be such that prices should harden and I expect to see evidence of that in the course of next few years. And I would like to make it even harder as we go along," Irda Chairman J Harinarayan said.

Harinarayan, who was speaking at the 'Ficci National Conference on Insurance', said the non-life insurance companies would need to bring in changes in marketing, pricing and modes of claim settlement to become profitable. "Because of the requirement of increase in provisioning, there will be a reduction in capacity and because of that there will be a hardening of prices," Harinarayan added.

Irda has already proposed to increase provisioning requirement for insurers providing motor insurance covers. Irda had increased the provisions made for motor pool to 153 per cent of book value for the four years till March 31, 2010, against 126 per cent maintained by companies.This is aimed at enhancing solvency margins and make higher provisioning for third-party motor pool.

Solvency margin is the minimum surplus on the insurer's assets over liability set by the regulator and the insurance companies are estimated to have provided about Rs 3,500 crore till March 31, 2010, for maintaining this margin.

Harinarayan said in the next three years the insurance companies will see changes in distribution set up, marketing techniques, channels of distribution and also terms of regulatory development. "The agency model that we see right now has serious deficiencies and that requires to be strengthened. I do not think the agency distribution model is going to last very long," he said.

He said agency model in the traditional form has vanished in large markets across the world. "...I do not see why India will be any exception to that particular development," the Irda chief added. He said even as the market widens, "it is not going to go down to the poorest of poor". "The total size of the market we are looking at (for insurance penetration) may be 500-600 million in terms of kind of product we have to offer," Harinaryan said.Going forward in general insurance space, he said, the health and annuity or pension-linked insurance products will gain predominance.