Health Insurance 11 Bbi

7/31/2019 Health Insurance 11 Bbi

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VIVEK COLLEGE OF COMMERCE

HEALTH INSURANCE Page 1

CHAPTER NO.1

INTRODUCTION TO INSURANCE

1.1INTRODUCTION OF INSURANCE

Insurance is a mechanism that helps to reduce the effects of adverse

situations in the economical way. It promises to pay to the owner or

beneficiary of the asset, a certain sum if the loss occurs.

The business of insurance is related to the protection of the economic

values of assets. The asset would have been created through the efforts of

the owner. The asset is valuable to the owner, because he expects to get

some benefits from it because it meets some of his needs. This benefit

may be an income or in some other form.

In the case of a factory or a cow, the product generated by it is sold and

income is generated. In the case of a motor car, it provides comfort and

convenience in transportation, there is no direct income. Both are assets

and provide benefits.

Every asset is expected to last for a certain period of time during which it

will provide the benefits, after that, the benefit may not be available.

There is a life-time for a machine in a factory or a cow or a motor car.

None of them will last forever. The owner is aware of this and he can so

manage his affairs that by the end of that period or life-time, a substitute

is made available.


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Thus, he makes sure that the benefit is not lost. However, the asset may

get lost earlier. An accident or some other unfortunate event may destroyit or make it incapable of giving the benefits. An epidemic may kill the

cow suddenly. In that case, the owner and those enjoying the benefits

there from would be deprived of the benefits. The planned substitute

would not have been ready. There is an adverse or unpleasant situation.

Here, insurance helps to reduce the effects of such adverse situations.

1.2 PURPOSE & NEED OF INSURANCE

The risk only means that there is a possibility of loss or damage. The

damage may or may not happen. Insurance is done against the possibility

that the damage may happen. There has to be an uncertainty about the

risk. The earthquake may occur, but the building may not have been

affected at all. The word 'possibility' implies uncertainty. Insurance is

relevant only if there are uncertainties.

In case of a human being, death is certain, but it's time is uncertain. The

person is insured, because of the uncertainty about the time of his death.

In the case of a person who is ill the time of death is not uncertain, though

not exactly known. It would be 'soon'. He can't be insured.


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1.3 HOW INSURANCE WORKS

The mechanism of insurance is very simple. People who are exposed to

the same risks come together and agree that, if any one of them suffers a

loss, the others will share the loss and make good to the person who lost.

The manner in which the loss is to be shared can be determined

beforehand. It can be equal among all. It can also be proportional to the

risk that each person is exposed

Insurance is a form of risk management primarily used to hedge

against the risk of a contingent, uncertain loss. Insurance is defined as the

equitable transfer of the risk of a loss, from one entity to another, in

exchange for payment. An insurer is a company selling the insurance; the

insured, or policyholder, is the person or entity buying the insurance

policy. The amount to be charged for a certain amount of insurance

coverage is called the premium. Risk management, the practice of

appraising and controlling risk, has evolved as a discrete field of study

and practice.

The transaction involves the insured assuming a guaranteed and

known relatively small loss in the form of payment to the insurer in

exchange for the insurer's promise to compensate (indemnify) the insured

in the case of a financial (personal) loss. The insured receives a contract,

called the insurance policy, which details the conditions and

circumstances under which the insured will be financially compensated.

Insurance involves pooling funds from many insured entities (known as

exposures) to pay for the losses that some may incur. The insured entities


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are therefore protected from risk for a fee, with the fee being dependent

upon the frequency and severity of the event occurring. In order to beinsurable, the risk insured against must meet certain characteristics in

order to be an insurable risk. Insurance is a commercial enterprise and a

major part of the financial services industry, but individual entities can

also self-insure through saving money for possible future losses.

Risks which can be insured by private companies typically share

seven common characteristics:

1. Large number of similar exposure units: Since insurance operates

through pooling resources, the majority of insurance policies are provided

for individual members of large classes, allowing insurers to benefit from

the law of large numbers in which predicted losses are similar to the

actual losses. Exceptions include Lloyd's of London, which is famous for

insuring the life or health of actors, sports figures and other famous

individuals. However, all exposures will have particular differences,

which may lead to different premium rates.

2. Definite loss: The loss takes place at a known time, in a known place,

and from a known cause. The classic example is death of an insured

person on a life insurance policy. Fire, automobile accidents, and worker

injuries may all easily meet this criterion. Other types of losses may only

be definite in theory. Occupational disease, for instance, may involve

prolonged exposure to injurious conditions where no specific time, place

or cause is identifiable. Ideally, the time, place and cause of a loss should

be clear enough that a reasonable person, with sufficient information,

could objectively verify all three elements.


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3. Accidental loss: The event that constitutes the trigger of a claim

should be fortuitous, or at least outside the control of the beneficiary ofthe insurance. The loss should be pure, in the sense that it results from an

event for which there is only the opportunity for cost. Events that contain

speculative elements, such as ordinary business risks or even purchasing

a lottery ticket, are generally not considered insurable.

4. Large loss: The size of the loss must be meaningful from the

perspective of the insured. Insurance premiums need to cover both the

expected cost of losses, plus the cost of issuing and administering the

policy, adjusting losses, and supplying the capital needed to reasonably

assure that the insurer will be able to pay claims. For small losses these

latter costs may be several times the size of the expected cost of losses.

There is hardly any point in paying such costs unless the protection

offered has real value to a buyer.

5.Affordable premium: If the likelihood of an insured event is so high,

or the cost of the event so large, that the resulting premium is large

relative to the amount of protection offered, it is not likely that the

insurance will be purchased, even if on offer. Further, as the accounting

profession formally recognizes in financial accounting standards, the

premium cannot be so large that there is not a reasonable chance of a

significant loss to the insurer. If there is no such chance of loss, the

transaction may have the form of insurance, but not the substance. (See

the US Financial Accounting Standards Board standard number 113)


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6. Calculable loss: There are two elements that must be at least

estimable, if not formally calculable: the probability of loss, and theattendant cost. Probability of loss is generally an empirical exercise,

while cost has more to do with the ability of a reasonable person in

possession of a copy of the insurance policy and a proof of loss

associated with a claim presented under that policy to make a reasonably

definite and objective evaluation of the amount of the loss recoverable as

a result of the claim.

7. Limited risk of catastrophically large losses: Insurable losses are

ideally independent and non-catastrophic, meaning that the losses do not

happen all at once and individual losses are not severe enough to

bankrupt the insurer; insurers may prefer to limit their exposure to a loss

from a single event to some small portion of their capital base. Capital

constrains insurers' ability to sell earthquake insurance as well as windinsurance in hurricane zones. In the US, flood risk is insured by the

federal government. In commercial fire insurance it is possible to find

single properties whose total exposed value is well in excess of any

individual insurer's capital constraint. Such properties are generally

shared among several insurers, or are insured by a single insurer who

syndicates the risk into the reinsurance market.


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CHAPTER NO.2

INTRODUCTION TO HEALTH INSURANCE

2.1 DEFINITION

Insurance against loss by illness or bodily injury. Health insurance

provides coverage for medicine, visits to the doctor or emergency room,

hospital stays and other medical expenses. Policies differ in what they

cover, the size of the deductible and/or co-payment, limits of coverage

and the options for treatment available to the policyholder. Health

insurance can be directly purchased by an individual, or it may be

provided through an employer. Medicare and Medicaid are programs

which provide health insurance to elderly, disabled, or un-insured

individuals. There are a number of companies which provide private

health insurance, including Blue Cross, United Healthcare, or Aetna.

Introduction

Health insurance is insurance against the risk of incurring medical

expenses among individuals. By estimating the overall risk of health care

expenses among a targeted group, an insurer can develop a routine

finance structure, such as a monthly premium or payroll tax, to ensure

that money is available to pay for the health care benefits specified in the

insurance agreement. The benefit is administered by a central

organization such as a government agency, private business, or not-for-

profit entity.


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2.2 HEALTH INSURANCE POLICY IS:

1) A contract between an insurance provider (e.g. an insurance company

or a government) and an individual or his sponsor (e.g. an employer or a

community organization). The contract can be renewable (e.g. annually,

monthly) or lifelong in the case of private insurance, or be mandatory for

all citizens in the case of national plans. The type and amount of health

care costs that will be covered by the health insurance provider are

specified in writing, in a member contract or "Evidence of Coverage"

booklet for private insurance, or in a national health policy for public

insurance.

2) Insurance coverage is provided by an employer-sponsored self-funded

ERISA plan. The company generally advertises that they have one of the

big insurance companies. However, in an ERISA case, that insurance

company "doesn't engage in the act of insurance", they just administer it.

Therefore ERISA plans are not subject to state laws. ERISA plans are

governed by federal law under the jurisdiction of the US Department of

Labor (USDOL). The specific benefits or coverage details are found in

the Summary Plan Description (SPD). An appeal must go through the

insurance company, then to the Employer's Plan Fiduciary. If still

required, the Fiduciarys decision can be brought to the USDOL to

review for ERISA compliance, and then file a lawsuit in federal court.


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2.3 IMPORTANCE OF HEALTH INSURANCE

Important Pointers in Health Insurance

We must read the policy exclusions & the limitations in various covers

properly before buying a Health Insurance plan because we should know

what all covers our policy include & exclude.

weshould note the number of network hospitals covered in the Insurers

list of network hospitals as this will help to get cashless & hassle-free

claim.

We must read the names of critical diseases being covered before

buying a Critical-Care plan.

We must know that the medical expenses incurred within the first 30

days of buying the health insurance plan are not covered unless the injury

has occurred out of an accident.

We must disclose all the Pre-Existing diseases to the insurer before

buying the health plan as the insurer doesnt cover them, now a days

General Insurers have started covering these diseases normally after 3-4

years varying from company to company.

An English proverb says that Health is Wealth. It is not a

meaningless saying as it defines a very important fact of life. Health is the

most precious wealth that God has given you. It is a own property and we

are the sole owner of it. Therefore, it is our responsibility to look after it

properly. However, it is also true that the life is full of uncertainties and

we never know what will happen in the next few hours. Therefore, it is


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also our duty to make certain arrangement so that we can take care of our

self as well as our family even if some misfortune falls upon us.

Here comes the importance of health insurance program. This

health insurance program, as the name itself tells, is entirely meant for the

proper care of our body and health. It is a permanent arrangement that we

can avail at a time when we need to undergo some serious health

disorder. These health disorders are very expensive by nature and we may

need the help from some sources to meet the expenses of this treatment.

As we all know, the cost of medical treatment has become very costly and

a person from the lower or middle income group cannot think about such

a costly treatment.

A health insurance program is a service of the insurance

companies that keeps your ensured against any serious illness like cancer.

If, unfortunately, happen to suffer from this serious disease ever in our

life, we would not be worried about the cost of treatment as we can get

the sum for treatment. As far as success of treatment is concerned, it is

not sure, however, our family gets a huge sum of money if we happen to

die in the process of our treatment.

The advantage of this health insurance program is very unique. we

need not spend a penny from our pocket and the whole cost of treatment

is borne by the insurance company. It is a great relief for the members of

our family as well because they need not worry about our treatment. A

health insurance program is a very useful investment because it helps us

at the time when you need the money most. If we do not have the health

insurance program for our self, then will be in deep trouble when a


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situation like occurs in front of you and leaves you in want of a huge sum

of money.

2.4 FEATURE OF HEALTH INSURANCE

1. Premium: The amount the policy-holder or his sponsor (e.g. an

employer) pays to the health plan to purchase health coverage.

2. Deductible: The amount that the insured must pay out-of-pocket

before the health insurer pays its share. For example, policy-holdersmight have to pay a $500 deductible per year, before any of their health

care is covered by the health insurer. It may take several doctor's visits or

prescription refills before the insured person reaches the deductible and

the insurance company starts to pay for care.

3. Co-payment: The amount that the insured person must pay out of

pocket before the health insurer pays for a particular visit or service. For

example, an insured person might pay a $45 co-payment for a doctor's

visit, or to obtain a prescription. A co-payment must be paid each time a

particular service is obtained.

4. Coinsurance: Instead of, or in addition to, paying a fixed amount up

front (a co-payment), the co-insurance is a percentage of the total cost

that insured person may also pay. For example, the member might have to

pay 20% of the cost of a surgery over and above a co-payment, while the

insurance company pays the other 80%. If there is an upper limit on

coinsurance, the policy-holder could end up owing very little, or a great

deal, depending on the actual costs of the services they obtain.


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5. Exclusions: Not all services are covered. The insured are generally

expected to pay the full cost of non-covered services out of their ownpockets.

6. Coverage limits: Some health insurance policies only pay for health

care up to a certain dollar amount. The insured person may be expected to

pay any charges in excess of the health plan's maximum payment for a

specific service. In addition, some insurance company schemes have

annual or lifetime coverage maximums. In these cases, the health plan

will stop payment when they reach the benefit maximum, and the policy-

holder must pay all remaining costs.

7. Out-of-pocket maximums: Similar to coverage limits, except that in

this case, the insured person's payment obligation ends when they reach

the out-of-pocket maximum, and health insurance pays all further covered

costs. Out-of-pocket maximums can be limited to a specific benefit

category (such as prescription drugs) or can apply to all coverage

provided during a specific benefit year.

8. Capitation: An amount paid by an insurer to a health care provider, for

which the provider agrees to treat all members of the insurer.

9. In-Network Provider: (U.S. term) A health care provider on a list ofproviders preselected by the insurer. The insurer will offer discounted

coinsurance or co-payments, or additional benefits, to a plan member to

see an in-network provider. Generally, providers in network are providers

who have a contract with the insurer to accept rates further discounted


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from the "usual and customary" charges the insurer pays to out-of-

network providers.

10. Prior Authorization: A certification or authorization that an insurer

provides prior to medical service occurring. Obtaining an authorization

means that the insurer is obligated to pay for the service, assuming it

matches what was authorized. Many smaller, routine services do not

require authorization.

11. Explanation of Benefits: A document that may be sent by an insurer

to a patient explaining what was covered for a medical service, and how

payment amount and patient responsibility amount were determined.

Prescription drug plans are a form of insurance offered through some

health insurance plans. In the U.S., the patient usually pays a copayment

and the prescription drug insurance part or all of the balance for drugs

covered in the formulary of the plan. Such plans are routinely part of

national health insurance programs. For example in the province of

Quebec, Canada, prescription drug insurance is universally required as

part of the public health insurance plan, but may be purchased and

administered either through private or group plans, or through the public

plan.

Some, if not most, health care providers in the United States will agree to

bill the insurance company if patients are willing to sign an agreement

that they will be responsible for the amount that the insurance company

doesn't pay. The insurance company pays out of network providers

according to "reasonable and customary" charges, which may be less than


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the provider's usual fee. The provider may also have a separate contract

with the insurer to accept what amounts to a discounted rate or capitationto the provider's standard charges. It generally costs the patient less to use

an in-network provider.

2.5 FUNCTIONS OF HEALTH INSURANCE

The primary function of health insurance is to pay those covered

expenses, as outlined in the policy, incurred as a result of an accident or

illness. It often has two elements, one being hospitalization expenses and

the other being for the medical care rendered by a physician or other

health care professional.

The vast majority of health insurance is employer-based, meaning that

people have access to it through their employment. Not all employers

offer it, and for those whose employers do not, they are free to obtain

individual/family policies on their own.

Health insurance comes in a variety of types. These include traditional

indemnity plans, which are becoming less common, and an array of

managed care plans, including Health Maintenance Organizations and

Preferred Provider Organizations. Both of the latter provide medical care

on a prepaid basis, but differ in their delivery models, including by the

degree of choice of provider that the member retains.

Most health insurance plans have deductibles and co-payments, although

different terminology may be used. A deductible is an amount that the

insured/member must pay before the insurer's liability for payment is


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triggered. A co-payment is a form of cost-sharing such that the insurer

pays a percentage of a covered expense, and the insured pays theremainder. The size of the deductible and co-payment has an impact on

premium.

2.6THE ADVANTAGES OF HEALTH INSURANCE INCLUDE;

CUSTOMIZED HEALTH CARE: Her we have direct control overour policy and its benefits, unlike in group coverage. we can

negotiate to have certain provisions included or excluded in our

policy, and we can choose our deductible amount and co-payments.

CHOOSING OUR DOCTOR: Selecting a health care providerincluding doctors is another advantage of an individual health care

policy.

THE DISADVANTAGE OF HEALTH INSURANCE INCLUDE

The biggest disadvantage is the price. Individual policies can be very

expensive, especially if you have high risk potential or pre-existing health

problems. Before issuing an health insurance policy, the insurance

company usually runs a background check on your personal health

history. It is unwise to try to hide any pre-existing conditions from your

insurer. Another disadvantage is that all requirements of the insurance

company must be fully complied with before you can get health care

insurance.


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2.7 CRITERIA FOR CHOOSING A POLICY:-

Every word of policy terms and conditions is to be read and understood

before going for a particular policy. Here are few important points that

you can look for while choosing a particular policy.

1. Policy coverage: This term refers to medical conditions under which a

policy insures a person. This means a policy may not include every

medical condition of a person like most of the policies in India do not

include medical expenses from HIV, misuse of drugs and also injuries in

riots.

2. Mode of bill payment and claim: This plays a major role during

critical situations since certain policies may include conditions wherein

the person has to bear part or complete bill expense in the first place and

later on can claimed from insurer. This may also depend on the network

of hospitals that come under the insurance provider.

3. Network of hospitals: This can be one of the major criteria since the

network of hospitals an insurance company covers will give us more

options and will make us feel secure during critical situations. This is

because cashless claims can be made in these hospitals; the company will

have authorized to treat the person while the company takes care ofexpenses.

4. Premium and other benefits covered: This makes the choice to be

economical with added benefits in the basket. For ex: A condition of one

of the policies offered by Apollo Munich states includes certain bonuses

offered on every claim-free year.


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2.8 ELIGIBILITY CRITERIA FOR HEALTH INSURANCE:-

The person who purchases a policy must be minimum 18 years old.

The person who is insured for the policy can be maximum 60-65 years.

People who are more than 65 years old can be insured under policies for

senior citizens.

Certain policies also have a minimum limit for age of the person insured.

A policy may cover insurance to people above 3-5 years of age.

Providers of Health Insurance Policy:

The following are the popular health insurance policy providers in India

HDFC

ICICI

Apollo Munich

Maxbupa


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CHAPTER NO. 3

TYPES OF HEALTH INSURANCE

1.TRADITIONAL HEALTH INSURANCE OR FEE-FOR-

SERVICE

Up until about 30 years ago, most people had traditional indemnity

coverage. These days, it's often known as "fee-for-service." Indemnity

plans are a bit like auto insurance: you pay a certain amount of your

medical expenses up front in the form of a deductible and afterward the

insurance company pays the majority of the bill. Advances in modern

medicine increased the cost of providing health care and made it possible

for people to live longer. Those advances caused many insurance

companies to look for ways to reduce their costs of doing business, giving

managed care the boost it enjoys today.

For years, indemnity or fee-for-service coverage was the norm.

Under this type of health coverage, we have complete autonomy when it

comes to choosing doctors, hospitals and other health care providers. we

can refer yourself to any specialist without getting permission, and the

insurance company doesn't get to decide whether the visit was necessary.

we don't, however, have complete autonomy. Most fee-for-service

medicine is managed to a certain extent. For instance, if were not already

incapacitated, you may need to get clearance for a visit to the emergency

room.


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On the down side, fee-for-service plans usually involve more out-

of-pocket expenses. Often there is a deductible, usually of about $200-$2,500 before the insurance company starts paying. Once you've paid the

deductible, the insurer will kick in about 80 percent of any doctor bills.

You may have to pay up front and then submit the bill for reimbursement,

or your provider may bill your insurer directly.

Under fee-for-service plans, insurers will usually only pay for

reasonable and customary" medical expenses, taking into account what

other practitioners in the area charge for similar services. If your doctor

happens to charge more than what the insurance company considers

"reasonable and customary," you'll probably have to make up the

difference yourself. Traditionally, preventive care services like annual

check-ups and pelvic exams haven't been covered under fee-for-service

plans. But as the evidence mounts that preventive care can prevent morecostly illnesses down the road, some insurers are including them.

Fee-for-service plans often include a ceiling for out-of-pocket

expenses, after which the insurance company will pay 100 percent of any

costs. Needless to say, the ceiling is usually pretty high. In a nutshell, fee-

for-service coverage offers flexibility in exchange for higher out-of-

pocket expenses, more paperwork and higher premiums.


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THE ADVANTAGE FFS OR TRADITIONAL INDEMNITY

This plan is rarely provided anymore due to its high cost. The advantage

of this health care plan is that it allows you to choose any health care

provider you want. People who want the freedom to select their own

doctor, and who are willing to pay more for insurance chose this plan.

THE DISADVANTAGES OF FFS'S ARE THAT;

There are no financial incentives to reduce patient financialresponsibility, and

There is an absence of cost control which creates high premiums.

2.MANAGED CARE

Managed care has been around in one form or another since the 1930s,but it really took off in the last 10 years. As it grew, it evolved, leaving us

with three basic types of managed care plans. Today, the majority of

people with private health insurance have some type of managed care.

Although there are important differences among the different types of

managed care plans, there are some similarities. All managed care plans

involve an arrangement between the insurer and a selected network of

health care providers, and they offer policyholders significant financial

incentives to use the providers in that network. There are usually explicit

standards for selecting providers and a formal procedure to assure quality

care.


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Health care costs have seen a phenomenal rise in the recent times. This

has led the customers to insure not only themselves but their familymembers also. It will cover future medical expenses and other related

requirements if it ever arises. The need to insure has gained more

importance amongst older generation who is either retired or will retire in

the near future. Let us discuss the types of medical insurances available in

the market.

3. MEDICAL INSURANCE

This is typically a hospitalization cover and reimbursement of the medical

expenses incurred in respect of covered disease or surgery while the

insured was admitted in the hospital as a patient. Different types of

medical insurances are available in the market like individual medical

insurance, group medical insurance and overseas medical insurance.

There are health policies that reimburse you the actual hospitalization

cost for treatment of any disease and are offered by the non-life insurers

only. These policies are popularly called "Mediclaim" policies. Other

types of health insurances are provided by both the life and non-life

insurers.

4. CRITICAL ILLNESS INSURANCE

Critical Illness plan insures you against the risk of serious illnesses in

return of a premium you are required to pay. This gives you the same

security of knowing that a guaranteed cash sum will be paid if the

unexpected happens and you are diagnosed with any one of the critical


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illness. Sometimes a critical illness can change your lifestyle in addition

to help within the home or the family. In this type of health insuranceplan, the insured receives a lump sum amount within a few days of

diagnosing critical illness. Once this lump sum is paid, the plan ceases to

remain in force. Typically, a critical illness plan would provide cover for

the illnesses mentioned below.

Aorta graft surgeryCancerCoronary artery bypass surgeryFirst heart attackKidney failureMajor organ transplantMultiple sclerosisParalysisPrimary pulmonary arterial hypertension Stroke

5.PREFERRED PROVIDER ORGANIZATIONS (PPOS)

One step over the managed care border is the Preferred Provider

Organization. PPOs have made arrangements for lower fees with anetwork of health care providers. PPOs give their policyholders a

financial incentive to stay within that network.

For example, a visit to an in-network doctor might mean you'd have a

$10 co-pay. If you wanted to see an out-of-network doctor, you'd have to

pay the entire bill up front and then submit the bill to your insurance


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company for an 80 percent reimbursement. In addition, you might have to

pay a deductible if you choose to go outside the network, or pay thedifference between what the in-network and out-of-network doctors

charge.

With a PPO, you can refer yourself to a specialist without getting

approval and, as long as it's an in-network provider, enjoy the same co-

pay. Staying within the network means less money coming out of your

pocket and less paperwork. Preventive care services may not be covered

under a PPO.

Exclusive Provider Organizations are PPOs that look like HMOs. EPOs

raise the financial stakes for staying in the network. If you choose a

provider outside the network, you're responsible for the entire cost of the

visit.

THE ADVANTAGE OF PREFERRED PROVIDER

ORGANIZATION

This plan is a combination of a Traditional Indemnity plan and an HMO

plan. The advantages this plan offer is that

There are financial incentives to see doctors in the PPO networkMany services require just a co- payment for outpatient visits or

prescriptions

You can see a physician who is not part of the PPO network at areduced rate.


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THE DISADVANTAGES OF PPO'S INCLUDE;

Deductibles and coinsurance are applied for many services such ashospitalization.

Claims are submitted by the medical provider.The premiums and employee contribution are higher than an HMO

plan, but lower than a Traditional Indemnity plan.

6.POINT-OF-SERVICE (POS)

Point-of-service plans are similar to PPOs, but they introduce the

gatekeeper, or Primary Care Physician. You'll need to choose your PCP

from among the plan's network of doctors.

As with the PPO, you can choose to go out of network and still get

some kind of coverage. In order to get a referral to a specialist, though,

you usually must go through your PCP. You can still choose to refer

yourself, but it'll mean more hassles and more money coming out of your

pocket. If your PCP refers you to a doctor who is out of the network, the

plan should pick up most of the cost. But if you refer yourself out, then

you'll probably have to deal with more paperwork and a smaller

reimbursement. You may also have to pay a deductible if you go outside

the network.

POS plans may also cover more preventive care services, and may

even offer health improvement programs like workshops on nutrition and

smoking cessation, and discounts at health clubs.


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see its doctors, and that you get a referral from your primary care

physician before you see a specialist. If you can still pick up the phone,you'll probably need to get clearance before you can visit the emergency

room.

An HMO may have central medical offices or clinics (such as those used

by Kaiser Permanente), or it may consist of a network of individual

practices. In general, you must see HMO-approved physicians or pay the

entire cost of the visit yourself. HMOs have the best reputation for

covering preventive care services and health improvement programs

THE ADVANTAGE OF HEALTH MAINTENANCE

ORGANIZATION

These plans have become very popular as they are both comprehensive

and cheap. With an HMP plan there are no deductibles or coinsurance

expenses, only a co-payment.

Another advantage of this health care plan is that the cost of premiums

and employee contributions are low due to the presence of cost control

features. Here paperwork is minimal as there are no claims to submit.

THE DISADVANTAGES HOWEVER ARE THAT;

You can only see a doctor who belongs to the HMO networkOnly your primary care doctor can recommend a specialist

And there is a larger number of cost controls elements in the plan

such as authorizations, referrals, etc.


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8.TRAVEL HEALTH INSURANCE

HTH Worldwide is a leader in helping world travelers gain access to

quality healthcare services all around the globe. HTH combines ongoing

research, a contracted global community of physicians and hospitals,

advanced Internet applications, and wide experience in international

health insurance to ensure customers' health, safety and peace of mind.

Founded in 1997 as Highway To Health, Inc., HTH Worldwide has

grown to become a leading provider of international health insurance

programs and an innovator in online healthcare information, medical

assistance and insurance services around the globe. Presently, HTH

annually provides health insurance products or services to over 650,000

individuals who travel, study or live outside of their home country.

HTH Worldwide offers three types of travel health insurance plans.

8.1 TravelGap - Travel Medical Insurance

Offers a variety of medical limits and deductiblesFor trips up to 6 months for ages 84 and youngerCovers pre-existing conditions for medical services and medical

evacuation

Benefits include: Doctor office visits Inpatient hospital services


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Emergency services

Ambulance services prescription drugs

View Single Trip Benefits BrochureView Multi-Trip Benefits Brochure

8.2Trip Protector - Trip Protection

Coverage for trip cancellation, interruption and lost baggageUp to $1,000,000 medical and medical evacuation coverageTrip delay, flight delay, rental car damage, terrorism and moreview Benefits Brochure

8.3Global Student - For Students Studying Abroad

Global Student USA Designed for international students studying in the US $250,000 coverage per year Basic medical covered 100% up to first $5,000

US Students Abroad Designed for US study abroad students $100,000 coverage per year Basic medical covered 100% up to first $10,000


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9.SHORT TERM HEALTH INSURANCE

Short Term health insurance from Assurant Health provides you with

temporary coverage for periods of up to one year. The plans are designed

to fill gaps in your medical coverage and offer the following features.

Coverage is available for periods of 30 - 360 days.You may be covered as soon as the next day.You are covered anywhere in the US.You may choose your own doctors and hospitals.

Assurant Individual & Family health insurance plans are available in all

states EXCEPT: CT, MA, NJ, NY, & VT.

Some benefits include:

Doctor office visits

Prescription drug coverage

Hospital, lab, x-ray and ambulance

$2 million lifetime benefit

The following may benefit from Short Term health insurance:

People between jobs

People waiting for employer-sponsored benefits to begin

Temporary or seasonal employees

Early retirees


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CHAPTER NO.4

TYPES OF HEALTH INSURANCE PLAN

Health Insurance Plans are segregated into three categories, firstly the

Mediclaim Plans by Non-Life or General Insurance Companies, secondly

the Hospitalization Cash Policy by both Life & Non-Life Insurers and

thirdly the Critical Care Plans offered by both Life & Non-Life Insurers.

1.MEDICLAIM POLICY: It is basically a reimbursement plan offered

by General Insurers wherein the insured gets reimbursed of the total bill

amount of the medical expenses to the extent of an agreed sum assured. It

includes the room charges, ICU charges, surgery & doctor charges etc. It

includes a lot of exclusions which the policy holder must read before

buying the Mediclaim. The Mediclaim includes the following two

further categories:

a).Family Floater Plan: It is a very common plan these days which

covers your entire family under one premium payment giving coverage to

the family members together. This plan is being offered by almost all the

General Insurance Companies with a specific criterion of covering

individuals in the age group between 90days and 55years.


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For instance a person wants a health insurance for himself, his spouse &

their children, the Family Floater plan offers insurance coverage to theentire family under one premium payment. Lets take an example

wherein the person insures himself, his spouse & the dependent children

with the individual insurance plans with a sum assured of Rs. 1 lakh each,

he ends up paying premium ranging between Rs. 1000 - Rs. 2000 for

each family member. On the other hand if the person would have opted

for the family floater plan with the sum assured of Rs. 3 lakhs, the total

premium would surely be less than the separate premium payments in

individual health insurance plans. Moreover the separate health plan

holds the cover of only Rs. 1 lakh as against Rs. 3 lakh in case of the

Floater plan thus helping the family in case the medical treatment costs

go beyond that.

b) Group Mediclaim Insurance: It is the second variant of Mediclaim

which covers a group of individuals simultaneously. This form of

insurance includes the category of Employers Health Insurance Cover

wherein the sum assured normally varies between Rs. 15,000 and Rs.5,

00,000.


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2. HOSPITALIZATION CASH POLICY: It is a plan offered by both

Life & Non-Life Insurers wherein the Insured gets pre-determined cash

benefit on a daily basis irrespective of the hospitalization expenses being

incurred. It is not a fully comprehensive health insurance plan because it

doesnt cover the cost of medical treatment but pays lump sum amount to

the policy holder on per day basis during the treatment/hospitalization. It

acts a complimentary plan to the Mediclaim plans. TATA-AIG General

Insurance & Royal Sundaram offer Hospital cash benefit plan among

Non-Life Insurers.

3.CRITICAL-CARE PLAN: It is offered by both Life & General

Insurers covering an individual for certain specified critical illnesses like

cancer, stroke etc. This is also offered as a rider by Life Insurance

companies for quite some time now attached to their Life Insurance

Plans. You must take a cover either as a rider or as a standalone plan in

your portfolio.

4.CASHLESS HOSPITALIZATION: Cashless settlement implies that

an individual doesnt have to settle a hospital bill out of his pocket; rather

the bill gets settled directly by the insurance company. When you buy a

Health Plan you are issued a Health Card along with the policy

documents which would entitle you to get cashless claim at any of the

companys network hospitals.


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CHAPTER NO.5

TAX BENEFITS ON HEALTH INSURANCE PLAN

Health Insurance Tax Benefits

Health Insurance products are eligible for tax benefits undersection 80D of the Income Tax Act, 1961. Premium paid under

health insurance holds a tax deduction upto Rs 15,000 for you,

your spouse and dependent children.

Further more you can also claim another Rs. 15, 000 for taxdeduction for your parents, in case of senior citizens (65 years or

more) the above deductions are increased to Rs. 20,000

Health insurance has many benefits- health cover, critical illnessbenefit and additional covers. Along with this you can also avail

tax benefits under Section 80D of the Income tax Act 1961. You

can avail up to Rs 15,000 and Rs 20,000 for senior citizens.

Section 80D as per Income tax Act 1961 is as follows: Deduction in

respect of health insurance premia 80D are:

(1). In computing the total income of an assessee, being an individual or a

Hindu undivided family, there shall be deducted such sum, as specified in

sub-section (2) or sub-section (3), payment of which is made by any

mode, other than cash, in the previous year out of his income chargeable

to tax.


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(2). Where the assessee is an individual, the sum referred to in sub-

section (1) shall be the aggregate of the following, namely:

A.The whole of the amount paid to effect or to keep in force aninsurance on the health of the assessee or his family [or any

contribution made to the Central Government Health Scheme] as

does not exceed in the aggregate fifteen thousand rupees; and

B.The whole of the amount paid to effect or to keep in force aninsurance on the health of the parent or parents of the assessee as

does not exceed in the aggregate fifteen thousand rupees.

Explanation - For the purposes of clause (a), family means the spouse

and dependent children of the assessee.

(3). Where the assesses is a Hindu undivided family, the sum referred to

in sub-section (1) shall be the whole of the amount paid to effect or to

keep in force an insurance on the health of any member of that Hindu

undivided family as does not exceed in the aggregate fifteen thousand

rupees.

(4). Where the sum specified in clause (a) or clause (b) of sub-section (2)

or in sub-section (3) is paid to effect or keep in force an insurance on the

health of any person specified therein, and who is a senior citizen, the

provisions of this section shall have effect as if for the words fifteen


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thousand rupees, the words twenty thousand rupees had been

substituted.

Explanation - For the purposes of this sub-section, senior citizen means

an individual resident in India who is of the age of sixty-five years or

more at any time during the relevant previous year.

(5). The insurance referred to in this section shall be in accordance with a

scheme made in this behalf by

A .the General Insurance Corporation of India formed under section 9 of

the General Insurance Business (Nationalisation) Act, 1972 (57 of 1972)

and approved by the Central Government in this behalf; or

B .any other insurer and approved by the Insurance Regulatory and

Development Authority established under sub-section (1) of section 3 of

the Insurance Regulatory and Development Authority Act, 1999 (41 of

1999).]

The above act states that if an individual buys health insurance, then the

premium paid is deductible from his chargeable income. The premium

that is deducted cannot exceed 15,000 for individual and Rs 20,000 for

senior citizen (aged above 65).

Illustration:

a. Anil has annual salary is Rs 8 lacs 10 thousand and buys health

insurance for himself for Rs 20,000. Amount of 15,000 would be

deducted from his taxable income.


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b. Anil buys health insurance for himself and his parents who are both

senior citizens. The annual premium he pays for the same is 50,000.Amount of 35,000 can be deducted from taxable income to avail tax

benefits. If Anil is in the tax bracket of 30% already, he gets taxation

benefit of Rs 10,815.

Health Insurance Covers & Benefits

Room & Boarding expenses: There are further limits to this feature

varying from company to company.

Ambulance Charges: They are normally covered upto Rs. 1000.

ICU charges, doctor, consulting, anesthetist and surgeon fees, operation

and other diagnostic and surgical material costs are covered.

Day-Care expenses such as Chemotherapy, Dialysis & Radiotherapy

etc.

Pre & Post Hospitalization Expenses which normally are 30 days prior

and 60 days after hospitalization.

Cashless Hospitalization is offered by almost all Non-Life Insurers.


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Limited-Benefit Health Plans

Health Access is a limited-benefit health plan offered by Assurant Health.

The plans cover certain services such as doctor office visits and

prescription drugs up to a set dollar amount. They are not major medical

health insurance plans and should not be used to replace such coverage.

Some of the covered services include:

Doctor office visits

Inpatient services (Hospital)

Prescription drugs

Emergency services

Ambulance

Outpatient Lab & X-ray

Surgical services


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CHAPERT NO.6

CLAIM PROCEDURE

we should walk into a network hospital & get the treatment done &

the bills paid through the Health Card. In case of hospitalization we needto give the card number to the network hospital, we must pre-authorize

from the TPA (Intermediary between the Insurance Company & the

hospital) & will process the cashless settlement after the verification of

our policy details.we should know the formalities required for cashless

settlement as some insurance companies are required to be notified 48

hours before hospitalization.

If we dont opt for cashless settlement, we need to settle bills at the

hospital and get them reimbursed later.

CLAIM PROCEDURE

Claims are broadly of two types:

1. Cashless Claims and

2 .Reimbursement Claims


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GENERAL CLAIM PROCEDURE:

As soon as there is a need for hospitalisation, please intimate theHCMT/TPA on 24x7 Customer Helpline number as mentioned in your

Health Card/Policy Schedule.

You are required to furnish the following information while intimating a

claim:

a. Contact Numbersb. Policy Number (as on the Health Card//Policy Schedule)c. Name of Insured person who is hospitalisedd. Nature of sickness/accidente. Date & Time in case of accident, commencement date of symptom

of disease in case of sickness

f. Location of accident.

The benefit of choosing a network hospital is that we can avail of

"Cashless Facility" while we are hospitalised whereas we will have to

settle our hospital bills in the hospital which is outside our network.

we have to follow the procedures listed below to get the services in

different situations.


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1.PROCEDURES FOR "CASHLESS FACILITY"

"Cashless Facility" is the service wherein we need not pay our

hospitalisation bills to the hospital either at the time of admission or at the

time of discharge from the hospital. This facility is available only at our

Network Hospitals. To avail the "Cashless Facility" we need to fill

"Cashless request form" available in all the network hospitals. The

hospitals will co-ordinate to get the authorisation from the HCMT/TPA

for such "Cashless Facility". This authorisation along with a copy of the

card issued by us needs to be given to the Hospital at the time of

admission. we are also required to carry a Photo ID Card. Please Note:

HCMT/TPA shall authorise "Cashless Facility" at the Network Hospitals

in respect of treatments which are covered under the policy.

"Cashless Facility" may be denied by the HCMT/TPA in some of the

situations as listed below.

In case of any doubt on coverage of the present ailment/ treatment underthe policy

If the information sent by you /hospital is insufficient The ailment/condition etc. not being covered under the policy If the request for preauthorization is not sent in time

Denial of "Cashless Facility" is not denial of treatment. we may continue

with the treatment, pay for the services to the hospital, and later submit

the claim for processing and reimbursement.


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1.1 Emergency hospitalization:

Step 1. Take admission into the hospital.

Step 2. As soon as possible, Intimate the claim at the call centre, obtain

the pre-authorisation form from hospital and get the same filled in and

signed by the attending doctor.

Step 3. Fax the pre-authorisation form to the HCMT/TPA along with

necessary medical details like investigation report etc at the number

mentioned in our Health Card/Policy Schedule. The hospital will co-

ordinate for the same.

Step 4. (Option I)

A. If an authorisation for "Cashless Facility" from HCMT/TPA has been

received

i. At the time of dischargea. we will be required to pay for all such expenses that are not

payable as per the terms of the policy.

b. Verify the bills and sign on all the billsc. Leave the original discharge summary and other investigation

reports with the hospital. Retain a Xerox copy for your records

Step 4. (Option II)

B. In case "Cashless Facility" has been denied by HCMT/TPA

I. At the time of discharge settle the hospital bills in full andcollect all the original bill documents and reports

II. Lodge your claim with HCMT/TPA for processing andreimbursement


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1.2 Planned hospitalization:

Step 1. Please co-ordinate with our doctor and the hospital and send allthe details about the planned hospitalisation including the plan of

treatment, cost estimates etc. to HCMT/TPA.

This may be sent at least 2 days prior to the planned admission.

Step 2. (Option I)

A. If authorisation for "Cashless Facility" from TPA has been received

I. At the time of admission, present the authorisation letter and photoID card to the hospital

II. At the time of dischargea. Pay for those expenses that are not reimbursable under the policyb. Verify the bills and sign on all the bills.c. Leave the original discharge summary and other investigationsreports with the hospital. Retain a Xerox copy for your records

Step 2. (Option II)

B. In case "Cashless Facility" has been denied by HCMT/TPA

a. Get admitted and take treatmentb. At the time of discharge settle the hospital bills in full and collect

all the original bill documents and reports

c. Lodge your claim with HCMT/TPA for processing andreimbursement

"Please note that failure to intimate HCMT/TPA as soon as the

hospitalisation takes place can invalidate our claim."


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2.PROCEDURES FOR REIMBURSEMENT CLAIMS

EMERGENCY HOSPITALISATION

Step 1. Take admission into the hospital.

Step 2. As soon as possible, intimate the HCMT/TPA about the

hospitalisation.

Step 3. At the time of discharge, settle the hospital bills in full and collect

all the original bills, documents and reports.

Step 4. Lodge our claim with HCMT/TPA for processing and

reimbursement, by filling in the claim form and attaching required

documents as mentioned in the claim form.

2.1Planned hospitalization:

Step 1. Intimate HCMT/TPA of the planned hospitalisation.

Step 2. Get admitted into the hospital.

Step 3. At the time of discharge, settle the hospital bills in full and collect

all the original bills, documents and reports.

Step 4. Lodge our claim with HCMT/TPA for processing and

reimbursement.

How to lodge a claim with HCMT/TPA for processing and

reimbursement

Within 7 days after discharge, please lodge the claim for processing.

While submittiing a claim, please make sure that all the documents listed

under the document check list are attached.


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Document Check list for Hospitalisation, Domiciliary Hospitalisation

& Critical illness claims

2.2 Hospitalisation / DayCare Treatment:

a. First prescription of doctor with commencement date of the symptom

of disease

b. Treatment papers along with doctors prescriptions

c. Investigation reports (X-ray/Scan/ECG, Laboratory etc)

d. Original medical bills and receipt of hospital, doctors, medical shops,

diagnostic centre etc supported by Doctor's advice

e. Hospital discharge card, in original

f. Copy of FIR (if any in case of accident)

2.3 Critical Illness Claims:

a. Claim form duly completed

b. Original Specialist Doctor's certificate confirming the diagnosis and

when the symptoms first occurred

c. Relevant Investigation reports (Radiology, Pathology etc) confirmingthe diagnosis

d. Hospital admission & discharge card / certificate


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2.4 Domiciliary Hospitalisation:

a. First prescription of doctor with commencement date of thesymptom of disease

b. Treatment papers along with doctors prescriptionsc. Investigation reports (X-ray/Scan/ECG, Laboratory etc)d. Original medical bills and receipt of doctors, medical shops,

diagnostic centre etc supported by Doctor's advice

e. Copy of FIR (if any in case of accident)f. Certificate from attending Doctor/Physician stating the condition of

the patient is not permissible for him/her to be removed to

Hospital/Nursing Home or documentary proof of lack of

accommodation in Hospital/Nursing Home.


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CHAPTER NO.7

CONCLUSION

Health and medical insurance in India is of recent origin. It took a

concerted effort on part of the Government to make it popular by

introducing a simple to-operate Mediclaim policy. The features of this

policy borrow heavily from internationally successful models of health

insurance, while incorporating features that are peculiar to India. This is

available not only for individuals to buy but also as a Group cover for

employers to offer to employees. Besides Mediclaim there are a few other

popular covers in India.

With the advent of the private sector both cashless and cash-

reimbursement are used as system of claim settlement. Service Providers

in this case hospitals, Nursing homes and medical practitioners are

increasingly seeking tie-ups with insurers to offer their services under

health and medical insurance plans.


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BIBLIOGRAPHY

WEBSIDE:

1. www.investorwords.com/2289/health_insurance.

2. www.wikipedia.org/wiki/Health_insurance -

3. www.healthinsuranceadvice.org/types.html -

BOOKS:

1.Insurance products including pension products.2.Health insurance

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