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HEALTH INSURANCE IN INDIA
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Health Insurance
Health Preventive no regulation
Promotive no regulation
Curative Partly regulated
Curative- OPD
- IPD
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Insurance
Life
Non-life
Reinsurance: All of them are regulated Life: critical illness
Non-life: Medi-claim
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Some basic concepts of insurance
Risk ?
Risk pooling: law of large numbers,low&high, rich&poor, young&old
Risk avoidance: LPG godown
Risk mitigation: preventive
Adverse selection vs risk selection Moral hazard vs induced demand
(deductible & co-payment)
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Present scenario
1. Enormous mismatch in global healthcare financing
2. Developing countrieshave 84% of population & 90% of diseaseburden
3. By 2020, world population-7.5 billion
By 2050, world population 9 billion
Most of the growth in developing countries.
4. According to NHA of India 2001-02, sources of finance in healthsector
Household 68.8%
Central Govt. 7.2%
State Govt. 14.4%
Private Firms 3%
Public Firms 2%
External Funds 2%
Local Govt. 2.2%
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(continued)
Govt. spending on health care of GDP0.9%
Private spending 4 to 4.5% of GDP
Overall Out of Pocket Expense80%
(incentivises supplier induced demand)
In Bihar & UP, it is 90%
NSS (1995-96) showed that rich consumedpublic service 3 times > the poor
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BPL POPULATION - FAMILIES 2001 Figures In Million
BPLURBAN
BPLRURAL
TOTALBPL
BPLURBANFamilies
RURAL
Families
TOTALBPL
067.0 193.2 266.2 017.8 048.6 065.4
BPL POPULATION - FAMILIES 2004 Figures In Million
BPLURBAN BPLRURAL TOTALBPL BPLURBANFamilies
RURALFamilies
TOTALBPL
80.79 220.93 301.72 020.1 055.23 075.33
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Present status
2% - By Insurance Policies.
10% - By self funded Govt. Scheme i.e. CGHS,Railways, Defense, PSUs organization. ESI etc.
1.1% - Rural / BPL population { UHIS / CommunityInsurance}.
86.9% - Depend upon Govt. / Private Hosp.
40% - Unable to take treatment.
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(continued)
REASONS- Unable to take treatment.
Mostly illiterate and poor.
First priority is food. Rest later.
Prefer traditional / local / home made remedies. Public facilities:
a. far from reach distance and
b. if managed to reach poor quality treatmentc. to purchase medicines etc from out side
Cant afford high treatment cost: in Pvt. Hosp.
Borrowing money, sale of propertymake them
poorer.
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Financing Options
Self pay (include user fees)
General tax revenue financing
Insurance:
Social insurance: Compulsory; Public orprivate management
Private: Voluntary
Community Financing Individual Savings Account/Catastrophic
insurance
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Comparison of risk pooling and
equity of financing methods
Financing method Risk pooling Equity
General revenue Widest risk pooling Most equitable
Social insurance Within the covered
population
Redistributive within
the coveredpopulation
Private insurance
Group Within a group Redistributive withina group
Individual Within an age/sex group Not equitable
Community Financing Within a community Redistribution withina community
User fees No risk pooling Not equitable
t O
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1st NATIONAL HEALTH SCHEMEFOR BPL- UHIS
BENEFITS
Sum Insured Rs.30,000
Limit for Anesthesia, Blood, Oxygen, etc. Rs. 4,500/- Limit for any one illness Rs. 15,000/- Personal Accident Cover Rs.25,000/- Pre Existing Diseases NOT COVERED Waiting period 30 days First Year Exclusions NOT COVERED
Maternity Benefits NOT COVERED Bystander Allowance NOT COVERED PREMIUM (for a family of five) (Sub-300) Rs.548 BPL Family Pays Rs.248
IT FAILED
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Performance under UHIS
Name of theCo No. ofPolicies No. ofFamilies No. of.Persons Premium Claims Paid
(Rupees in lakhs)2004-05 52,772 65,718 1,82,641 280.655 40.022005-06 67,259 76,605 2,47,801 350.53 154.012006-07 1,14,432 1,42,704 4,65,638 739.98 335.442007-08(Up to
Dec07)69745 81494 308238 396.40 10.057
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REASONS FOR FAILURE OF UHIS
Lack of willingness of Insurers / other Stake holders.
Absence of Nodal implementing agency
Improper identification system of beneficiaries.
Inadequate coverage / benefits.
Huge premium burden Rs 165/- min per personhence Unaffordable in spite of govt. subsidy (Rs 200(1),
300(5) & 400(7).
Lack of awareness / publicity.
Cost of collection of premium more than the premium
No confidence of public about treatment in case of need
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Yashashvini
1. Benefits available to all members of all types of ruralcoops such as:
Fisherman, Milk
WeaversIndustrial
Artisans
SHG/Stree-shakti groups
2. Age: newborn to 75 Years
3. Period starts from 1st June
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Participation Number Premium per farmer
Year (in Million) per Annum
Year-1 (2003-04) 1.6 Rs. 60/=Year-2 2.0 Rs. 60/=
Year-3 1.05 Rs. 120/=
(Rs.60 per child below 18 Years)
Year-4 1.9 Rs. 120+60/=
Year-5 (2007-08) 2.3 Rs. 120/=(for adult & child)
With 15% discount on 5 or more members of family
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1. Coverage upto Rs 2. lakh per year and Rs. 1 lakh per hospitalization.
2. 1600 surgical procedures @ 40% to 50% of price
Normal delivery IV Year
Neonatal Care IV YearFree OPD
Discounted Lab tests
Defined Medical Emergencies IV Year
3. Surgery package includes everything during hospital stay
4. Coverage for stabilization of defined Medical emergencies. Hospitalfor 2 days for
Snake-bite
Bull Gore injury
Electric Shock
Drowning
Dog bite
Injuries with agri equipments
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Procedure
1. Member approaches Network Hospital with IDCard
2. Network hospital intimates TPA for validation &
extent of cashless facility3. Hospital sends claim docs to TPA for
reimbursement
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1. Pre- Existing disease no bar to avail thebenefit.
2. 100% Cashless Treatment
3. Laminated Photo ID
4. Choice of Hospital available
5. Administrative Cost Minimal
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2003-04 2004-05 2005-06 2006-07 2007-08(sept07)
Free OPD 35814 50174 52892 206977 22428
Surgeries 9047 15236 19677 39570 12765
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YEAR03-04 04-05 05-06 06-07
Members(in lakh) 16.1 20.2 14.7 18.7Contribution of
Members(In crore) 9.7 11.97 16.3 21.5Contribution Govt.(in crore) 4.5 3.58 11.0 20.0Total(in crore) 14.2 15.55 27.3 41.5Surgery Cost 10.65 10.47 26.16 38.72
(in crore)Cost/Member 66 92 174 204Collection/Member 60 60 120 120Total Admin.Cost 40.02 12.78 43.61
(in lakhAdmn.Cost/insured 2.5 1.6 2.3(in Rs)
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TPA (FHPL) FUNCTIONS
1. Enrolment & Photo ID Card
2. Cashless Treatment
3. MIS
4. District Coordinator
5. Member help-line/Call Centre
6. Medical/Case Management
7. Claims Management
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Network Hospitals Spread Across 113 Locations :ExclusiveFront Desk Counter
2003-04 114
2004-05 137
2005-06 197
2006-07 299
2007-08 310
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Sustainable - NO
1. Risk selection (voluntary) & not risk diversification
2. Renewal Rate: Y3 43%;Y4 62%
3. No Reinsurance
4. Individual Contract Vs. Community Contract
5. Low Insurance Premium
6. Misuse by Hospitals
7. Mandatory rather than voluntary
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CLAIMS
Year 1 Year 2 Year 3 Year 4 Claim Incidence 5.6 8.6 14.1 24.6
per 1000 Insured
Claim Cost per 66 104 187 253 Insured(in Rs)
Prem./Ins. (in Rs) 60 60 120 120
No. of Claims 9008 14963 19439 37330
Total Claims 10.65 18.08 25.78 38.40
(Rs in cr.)
Average Claims 11822 12083 13262 10286
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Claim Incidence per Thousand age groupwise/ Claim cost per insured
Year 2 Year 3 Year4
0-2 Yrs 26.6/963 50.7/1687 63.9/1532
3 - 7 12.1/306 23.8/627 21.2/449
38-43 5.6/64 8.4/97 13.9/139
73-78 19.7/216 18.1/205 58.4/456
Women Participation 40%
Top 5 Hospitals Claim share 51.5%
Average of Top 5 Hospitals increased from Rs.18230/(Y2) to Rs. 39600 (Y4)
Average of remaining hospitals remained almost the same at Rs 640/=
EFFORTS BY STATES NRHM
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EFFORTS BY STATES- NRHM
A.P.- CRITICAL ILLNESS- 3 Districts
Formation of a State Trust Enrolment by family photo electronic ration card
(Biometric Card). 20 lakh (1 phase), 48 lakh (II phase)
Pilot project in 3 District. (5 more districts from 7/12/07) Coverage for 5 critical surgeries(heart,kidny,cancer,neuro
and burns-now trauma also added). Negotiations of tariffs etc for 163 defined surgeries. (213) Cash less facilities.
Sum Insured Rs.1.50 lakh. Government and private hospitals as part of scheme. Serviced by Star health - Private Insurer. 100% premium by Govt. for BPL families.
Proposing to extend to 7 districts from 1/04/08
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DistrictNo.
Surgeries
Amount
In millions
No. ofcamps
Patientsscreened
Referredfor
admission
PHAS
E1
From 01/04/07
Mahboobnagar 2501 124.2 276 42223 3903
Anantapur 3201 175.9 335 64424 5296
Srikakulam 2943 118.9 216 43855 4092
Total 8645 419.1 827 150502 13921
From 07/12/07
PHASE
2
East Godavari 440 21.7 56 15234 3226
West Godavari 558 29.5 53 31438 3956
Chittor 167 07.5 67 42341 3136
Ranga Reddy 305 16.1 38 9847 1513
Nalgonda 374 17.2 63 14752 2674
Total 1844 92.2 277 113612 14505
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RAJASTHAN - NRHM
Enrolment of families by Health Card based on
BPL Data.Pilot project in 5 District. Sum Insured - Primary
Cover Rs 30,000 and 7 critical surgeries for Rs1,35,000.
Premium Rs 480 + ST
Beneficiaries 8 lakh BPL Families
Negotiations of tariffs etc for all procedures
Cash less facilities.Use of Government and private hospitals both
Serviced by State Health Insurance Fund Agency.
100% premium by Govt. for BPL families.
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EFFORTS OF OTHER CENTRALMINISTRIES
Textile Ministry: Scheme for
weavers(16lakh).Rural Development Ministry : Health for
BPL.
Labour Ministry: Rashtriya Swasthya BimaFisheries Department : Scheme for
fishermen.
Finance Ministry: UHIS
Chemical & fertilizer Ministry: Drugs.Ministries are interested in launching their own
Insurance schemes.
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RASHTRIYA SWASTHYA BIMAYOJANA
Benefits Total sum insured of Rs 30,000 per BPL
family on a family floater basis
Pre-existing diseases to be covered
Coverage of health services related tohospitalization and services of surgical
nature which can be provided on a day-care basis
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RASHTRIYA SWASTHYA BIMA
YOJANA
Benefits
Cashless coverage of all eligible healthservices.
Provision of Smart Card.
Provision of pre and post hospitalizationexpenses.
Transport allowance @ Rs.100 per visit
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FUNDING Contribution by GOI : 75% of the estimated annual
premium of Rs 750, subject to a maximum of Rs. 565per family.
Contribution by the State Governments: 25% of the
annual premium and any additional premium beyond Rs750.
Beneficiary to pay Rs. 30 per annum as RegistrationFee/ Renewal Fee
Administrative cost to be borne by the StateGovernment.
Cost of Smart Card to be borne by the CentralGovernment. An additional amount of Rs.60 perbeneficiary would be available for this purpose.
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REQUIREMENTS
Insurance with adequate Sum Insured.
Affordable premium.Simple terms and conditions of the policy.
Coverage of pre existing diseases.
Adequate capping on various proceduresto stop misuse of the scheme.
Identification and Networking of good &
small private hospitals/ specialised daycare centers
Easy mechanism of collecting premium
OPD and Drug cost