The Gimmick of Health Insurance Schemes

THE GIMMICK OF HEALTH INSURANCE
CHAPTER 1
INTRODUCTION
Health insurance is insurance against the risk of incurring medical
expenses among individuals. By estimating the overall risk of health
care and health system 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. According to
the Health Insurance Association of America, health insurance is defined as
"coverage that provides for the payments of benefits as a result of sickness or
injury. Includes insurance for losses from accident, medical expense, disability, or
accidental death and dismemberment"
Insurance in India refers to the market for insurance in India which covers
both the public and private sector organisations. It is listed in the Constitution of
India in the Seventh Schedule as a Union List subject, meaning it can only be
legislated by the Central government.
The insurance sector has gone through a number of phases by allowing
private companies to solicit insurance and also allowing foreign direct investment.
India allowed private companies in insurance sector in 2000, setting a limit
on FDI to 26%, which was increased to 49% in 2014.
However, the largest life-insurance company in India, Life Insurance
Corporation of India is still owned by the government and carries a sovereign
guarantee for all insurance policies issued by it.
CHAPTER 2
HISTORY
Launched in 1986, the health insurance industry has grown significantly
mainly due to liberalization of economy and general awareness. According to
the World Bank, by 2010, more than 25%[4] of Indias population had access to
some form of health insurance. There are standalone health insurers along with
government sponsored health insurance providers. Until recently, to improve the
awareness and reduce the procrastination for buying health insurance, the General
Insurance Corporation of India and the Insurance Regulatory and Development
Authority had launched[5] an awareness campaign for all segments of the
population.
In India, insurance has a deep-rooted history. Insurance in various forms has been
mentioned in the writings of Manu (Manusmrithi), Yagnavalkya (Dharmashastra)
and Kautilya (Arthashastra). The fundamental basis of the historical reference to
insurance in these ancient Indian texts is the same i.e. pooling of resources that
could be re-distributed in times of calamities such as fire, floods, epidemics and
famine. The early references to Insurance in these texts have reference to marine
trade loans and carriers' contracts.
Insurance in its current form has its history dating back until 1818,
when Oriental Life Insurance Company[3] was started by Anita Bhavsar
in Kolkata to cater to the needs of European community. The pre-independence era
in India saw discrimination between the lives of foreigners (English) and Indians
with higher premiums being charged for the latter. In 1870, Bombay Mutual Life
Assurance Society became the first Indian insurer.
At the dawn of the twentieth century, many insurance companies were
founded. In the year 1912, the Life Insurance Companies Act and the Provident
Fund Act were passed to regulate the insurance business. The Life Insurance
2
Companies Act, 1912 made it necessary that the premium-rate tables and
periodical valuations of companies should be certified by an actuary. However, the
disparity still existed as discrimination between Indian and foreign companies. The
oldest existing insurance company in India is the National Insurance Company ,
which was founded in 1906, and is still in business.
The Government of India issued an Ordinance on 19 January 1956
nationalising the Life Insurance sector and Life Insurance Corporation came into
existence in the same year. The Life Insurance Corporation (LIC) absorbed 154
Indian, 16 non-Indian insurers as also 75 provident societies245 Indian and
foreign insurers in all. In 1972 with the General Insurance Business
(Nationalisation) Act was passed by the Indian Parliament, and consequently,
General Insurance business was nationalized with effect from 1 January 1973. 107
insurers were amalgamated and grouped into four companies, namely National
Insurance Company Ltd., the New India Assurance Company Ltd., the Oriental
Insurance Company Ltd and the United India Insurance Company Ltd. The
General Insurance Corporation of India was incorporated as a company in 1971
and it commence business on 1 January 1973.
The LIC had monopoly till the late 90s when the Insurance sector was
reopened to the private sector. Before that, the industry consisted of only two state
insurers: Life Insurers (Life Insurance Corporation of India, LIC) and General
Insurers (General Insurance Corporation of India, GIC). GIC had four subsidiary
companies. With effect from December 2000, these subsidiaries have been delinked from the parent company and were set up as independent insurance
companies: Oriental Insurance Company Limited, New India Assurance Company
Limited, National Insurance Company Limited and United India Insurance
Company Limited.
Industry structure
By 2012 Indian Insurance is a US$72 billion industry. However, only two million
people (0.2% of the total population of 1 billion) are covered under Mediclaim,
3
whereas in developed nations like USA about 75% of the total population are
covered under some insurance scheme. With more and more private companies in
the sector, this situation is expected to change. ECGC, ESIC and AIC provide
insurance services for niche markets. So, their scope is limited by legislation but
enjoy some special powers.
Insurance Repository
On 16 September 2013, IRDA launched 'Insurance Repository' services in India. It
is a unique concept and first to be introduced in India. This system enables policy
holders to buy and keep insurance policies in dematerialized or electronic form.
Policy holders can hold all their insurance policies in an electronic format in a
single account called electronic insurance account (eIA). Insurance Regulatory and
Development Authority of India has issued licenses to five entities to act as
Insurance Repository:
CDSL Insurance Repository Limited ( CDSL IR ) , SHCIL Projects Limited Karvy
Insurance repository Limited NSDL Database Management Limited CAMS
Repository Services Limited
Legal structure
The insurance sector went through a full circle of phases from being unregulated to
completely regulated and then currently being partly deregulated. It is governed by
a number of acts.
The Insurance Act of 1938[4] was the first legislation governing all forms of
insurance to provide strict state control over insurance business.Life insurance in
India was completely nationalized on 19 January 1956, through the Life Insurance
Corporation Act. All 245 insurance companies operating then in the country were
merged into one entity, the Life Insurance Corporation of India.
The General Insurance Business Act of 1972 was enacted to nationalize about 100
general insurance companies then and subsequently merging them into four
companies. All the companies were amalgamated into National Insurance, New
India Assurance, Oriental Insurance and United India Insurance, which were
4
headquartered in each of the four metropolitan cities.Until 1999, there were no

private insurance companies in India. The government then introduced the
Insurance Regulatory and Development Authority Act in 1999, thereby deregulating the insurance sector and allowing private companies. Furthermore,
foreign investment was also allowed and capped at 26% holding in the Indian
insurance companies.
In 2006, the Actuaries Act was passed by parliament to give the profession
statutory status on par with Chartered Accountants, Notaries, Cost & Works
Accountants, Advocates, Architects and Company Secretaries.A minimum capital
of US$80 million(Rs.400 Crore) is required by legislation to set up an insurance
business.
Authorities
The primary regulator for insurance in India is the Insurance Regulatory and
Development Authority of India (IRDAI) which was established in 1999 under the
government legislation called the Insurance Regulatory and Development
Authority Act, 1999.[5][6]
The industry recognises examinations conducted by IAI (for 280 actuaries), III (for
2.2 million individual agents, 680 corporate agents, 380 brokers and 29 third-party
administrators) and IIISLA (for 8,200 surveyors and loss assessors). There are 9
licensed Web aggregators. TAC is the sole data repository for the non-life industry.
IBAI gives voice to brokers while GI Council and LI Council are platforms for
insurers. AIGIEA, AIIEA, AIIEF, AILICEF, AILIEA, FLICOA, GIEAIA, GIEU
and NFIFWI cater to the employees of the insurers. In addition, there are a dozen
Ombudsman offices to address client grievances.
CHAPTER 3
TYPES OF POLICIES
Health insurance in India typically pays for only inpatient hospitalization
and for treatment at hospitals in India. Outpatient services were not payable under
health policies in India. The first health policies in India were Mediclaim Policies.
In 2000 government of India liberalized insurance and allowed private players into
the insurance sector. The advent of private insurers in India saw the introduction of
many innovative products like family floater plans, top-up plans, critical illness
plans, hospital cash and top up policies.
The health insurance sector hovers around 10 % in density calculations. One
of the main reasons for the low penetration and coverage of health insurance is the
lack of competition in the sector. The Insurance Regulatory Authority of India
(IRDA) which is responsible for insurance policies in India can create health
circles, similar to telecom circles to promote competition.[6]
Broadly we can divide the health insurance plans in India today can be
classified into three categories:
Hospitalization
Hospitalization plans are indemnity plans that pay cost of
hospitalization and medical costs of the insured subject to the sum insured.
The sum insured can be applied on a per member basis in case of individual
health policies or on a floater basis in case of family floater policies. In case
of floater policies the sum insured can be utilized by any of the members
6
insured under the plan. These policies do not normally pay any cash benefit.
In addition to hospitalization benefits, specific policies may offer a number
of additional benefits like maternity and newborn coverage, day care
procedures for specific procedures, pre- and post-hospitalization care,
domiciliary benefits where patients cannot be moved to a hospital, daily
cash, and convalescence.
There is another type of hospitalization policy called a top-up policy.
Top up policies have a high deductible typically set a level of existing cover.
This policy is targeted at people who have some amount of insurance from
their employer. If the employer provided cover is not enough people can
supplement their cover with the top-up policy. However, this is subject to
deduction on every claim reported for every member on the final amount
payable.
Hospital daily cash benefit plans:
Daily cash benefits is a defined benefit policy that pays a defined sum
of money for every day of hospitalization. The payments for a defined
number of days in the policy year and may be subject to a deductible of few
days.
Critical illness plans:
These are benefit based policies which pay a lumpsum (fixed) benefit
amount on diagnosis of covered critical lllness and medical prodcedures.
These illness are generally specific and high severity and low fequency in
nature that cost high when compared to day to day medical / treatment need.
eg heart attack, cancer, stroke etc now some insurers have come up with
option of staggered payment of claims in combination to upfront lumpsum
payment.
CHAPTER 4
KEY ASPECTS OF HEALTH INSURANCE
Payment options
Direct Payment or Cashless Facility:
Under this facility, the person does not need to pay the
hospital as the insurer pays directly to the hospital. Under the
cashless scheme, the policyholder and all those who are
mentioned in the policy can undertake treatment from those
hospitals approved by the insurer.
Reimbursement at the end of the hospital stay:
After staying for the duration of the treatment, the patient
can take a reimbursement from the insurer for the treatment that
is covered under the policy undertaken.
Cost and duration

8
Policy price range:

Insurance companies offer health insurance from a sum
insured of Rs. 5000/-[7] for micro-insurance policies to a higher
sum insured of Rs. 50 lacs and above. The common insurance
policies for health insurance are usually available from Rs. 1 lac
to Rs. 5 lacs.
Duration:
Health insurance policies offered by non-life insurance
companies usually last for a period of one year. Life insurance
companies offer policies for a period of several years.
CHAPTER 5
TERMS IN HEALTH INSURANCE
THE INDIVIDUAL INSURED PERSON'S OBLIGATIONS MAY TAKE
SEVERAL FORMS:
Premium: The amount the policy-holder or their sponsor (e.g. an employer) pays
to the health plan to purchase health coverage.
Deductible: The amount that the insured must pay out-of-pocket before the health
insurer pays its share. For example, policy-holders might 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.
Furthermore, most policies do not apply co-pays for doctor's visits or prescriptions
against your deductible.
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.
Coinsurance: Instead of, or in addition to, paying a fixed amount up front (a copayment), 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.
Exclusions: Not all services are covered. The insured are generally expected to
pay the full cost of non-covered services out of their own pockets.
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 maxima. In
these cases, the health plan will stop payment when they reach the benefit
maximum, and the policy-holder must pay all remaining costs.
Out-of-pocket maxima: 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
maxima can be limited to a specific benefit category (such as prescription drugs)
or can apply to all coverage provided during a specific benefit year.
Capitation: An amount paid by an insurer to a health care provider, for which the
provider agrees to treat all members of the insurer.
In-Network Provider: (U.S. term) A health care provider on a list of providers
preselected by the insurer. The insurer will offer discounted coinsurance or copayments, 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 from the "usual and customary" charges the
insurer pays to out-of-network providers.
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.[3]
10
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.[3]
CHAPTER 6
CASE STUDIES
CASE STUDY 1
Policy Holder Fertility Treatment
A private medical insurance member contacted her insurer requesting
authorisation to see a consultant gynaecologist stating she was trying to conceive.
She was informed during by the health insurer that private health cover is
not provided for fertility consultations/investigations due to it being general
scheme exclusion. The member was unhappy with this response.
The health insurance member contacted the insurer a week later, stating that she
was confused when she phoned initially. She advised that she is having a
laparoscopy for dyspareunia. The insurer requested a medical report from the
members consultant.
The medical report was received from the consultant gynaecologist, with a
diagnosis of endometriosis. The consultant further reported that the laparoscopy
11
was required to treat endometriosis. There was no mention of treatment for

dyspareunia.
An investigation commenced and the member was contacted. The member
explained that her reasons for wanting private health cover was primarily for
fertility reasons, but had also 1wanted to treat dyspaneuria and possible
endometriosis. Member admitted she was confused why the GP had suggested she
had endometriosis because it had not been diagnosed before.
Further medical records were requested from the consultant gynaecologist and
other fertility specialists that the member had consulted.
The consultants referral letter contained multiple references to fertility,
referral to fertility clinics and trying to conceive over the last 18 months.
A second referral letter from a fertility specialist which stated that the reason for
the treatment was for fertility and that if private insurance rejected it then the
patient would have to fund the treatment themselves.
Investigative review found no corroborating evidence that member suffered from
dyspareunia, or endometriosis, or required a laparoscopy to treat either condition.
Prima facie evidence showed that the primary reason for seeking cover was for
fertility purposes, as confirmed by the member, and that the additional diagnosis
and treatment sought was a disguise for fertility treatment.
The claim was rejected and the members policy reviewed.
12
CASE STUDY 2
Policy Holder Non disclosure
A privately insured member claimed for treatment to his shoulder two days
after obtaining a policy. The member was on a full medical underwriting (FMU)
policy.
An Initial request for the members medical history did not identify a pre
existing injury and the insurer commenced to fund the treatment. The members GP
confirmed in a report that the condition was new.
Three months after the initial claim an anonymous caller contacted the insurer and
reported that they were aware the medical insurance members injury was pre
existing.
The matter was referred to fraud investigators who interviewed the
physiotherapist. The physiotherapist informed investigators that the injury was pre
existing.
Investigators interviewed the health insurance member who admitted the
fraud.
The member repaid the 1800 of funding that the insurer had paid,
their policy was cancelled and they were reported to the HICFG.
13
CASE STUDY 3
Policy Holder Fraudulent claim/creating a false document
Policyholder X submitted numerous cash-plan claims, over a short period of
time, for various treatments.
Regular reporting lead to a review of these claims and it was found that 15
of these treatments did not take place this was confirmed by contacting the
treatment providers.
Further investigation revealed that Policyholder X had taken out 2 further
policies with the same company using aliases.
Under the S29 (3), (anti-fraud), provisions of the Data Protection Act 1998,
details of Policyholder X were shared with other HICFG members who found that
the same thing had happened to them.
All policies were cancelled and the police contacted. Policyholder X was
convicted in a criminal court, which resulted in them receiving community
service and being ordered to compensate for the monies fraudulently gained.
14
CASE STUDY 4
Surgeon Billing for procedures not undertaken
Most of the Private Medical Insurance companies publish their own Fee
Schedules, which use Industry standard coding to list almost all commonly
performed medical procedures.
In many areas of practice there are number of possible codes which can be
selected based on the complexity of a procedure actually performed. By falsely
using a code for a more complex version of an operation it is possible to obtain
higher reimbursement than was intended. This is hard to detect as the difference
may be quite technical and the operation would be consistent with the customers
condition and medical history. One such are is gastroscopy (endoscopic
examination of the stomach) where it is possible to perform a diagnostic procedure
(just a look) or a therapeutic procedure which is where a treatment is given as well.
Most of the insurers try to identify up coding.
Several HICFG members observed that Provider X appeared to be invoicing
vastly more therapeutic procedures than his peers, and more than would
statistically be expected. His patients medical notes did not document the
therapeutic procedures which were claimed.
15
Despite several warnings the incorrect billing continued and eventually

several HICFG members complained to the General Medical Council, (GMC).
After a full investigation and Panel hearing, the provider was suspended from
the register for a period of 12 months. Many insurers also received refunds
from the provider concerned.
CHAPTER 7
NEWS ARTICLES
Health insurance scheme a gimmick, says Gunashekar
By Express News Service - BANGALORE

Published: 13th June 2012 09:26 AM
Last Updated: 13th June 2012 09:26 AM
Opposition leader in BBMP M K Gunashekar on Tuesday alleged that ruling

BJP is utilising a health insurance scheme, announced two and a half years ago just
for the sake of publicity.
Speaking to reporters, Gunashekar said the scheme, initially announced
during the administrative officers period, was meant for BPL card holders and
16
urban poor. The proposal of the scheme was sent to the State Government in
February 2010. There were 6.96 lakh estimated beneficiaries and Rs 20 crore were
earmarked for the scheme. Subsequently, when BJP came to power, in its first
budget, it announced the same scheme in the name of Pandit Deen Dayal Suvarna
Arogya Suraksha Yojane. It also announced Rs 20 crore for the scheme. It
reappeared in the 2011-12 budget under a new name - Vajpayee Arogyasree Yojna with an allocation of Rs 20 crore. No one benefited from this scheme,
Gunashekhar charged.
Three months ago, BJP announced that it is setting up 27 centres across
Bangalore to issue the insurance cards. They also paid Rs 1 crore to a private
company to issue the cards. They issued insurance cards to 35,000 beneficiaries
belonging to lower socio-economic groups. But no one was able to avail benefits.
Commissioner M K Shankarlinge Gowda issued a circular on April 12 asking the
officials to stop it as the State Government had also launched a health scheme
under the same name. Though he (Commissioner) said that he would take up the
issue with the Government, there has been no progress, he stated.
Gunashekar said he would write to the Commissioner and urge him to find a
solution. It is unfortunate that this scheme has not been implemented even after its
announcement. Without availing this benefit, many people might have died, he
said. Through this scheme, BBMP issues a card per family of five members that
would enable them to avail services in 40 government and private hospitals.
Less than 20% of population under health insurance cover: Report

Despite liberalization of the insurance sector, only around 21.6 crore people
- less than one-fifth of India's population - are covered under health insurance.
17
Even among those who have some form of coverage, 67% are covered by public
insurance companies, according to National Health Profile 2015, compiled by the
Central
Bureau
of
Health
Intelligence.
The report, which has a separate chapter on health financing, shows
despite a declining share of the Centre towards public health expenditure, it has
done significantly well to provide insurance cover as compared to the private
sector.
Public insurance companies have a higher share of coverage and
premium for all types of policies, except the family floater policies, where private
players grabbed 70% share. Family floater policies allow a family to claim the
complete insurance benefit for one member of the family while the policy covers
all its members.
Health insurance coverage to cross 630 mn people by 2015: WB

Health insurance coverage in India is expected to cross 630 million people
or 50% of the population by 2015, aWorld Bank report has said.
"New generation of health financing schemes can help India progress
towards universal health coverage. More than 630 million persons or half the
country's population are likely to be covered by health insurance by 2015," said the
study on Government-Sponsored Health Insurance Schemes (GSHIS).
According to the study, over the past five years, GSHIS have contributed to
a significant increase in the population covered by health insurance in the country.
18
Most of the growth is likely to occur along the three lines -- Rashtriya
Swasthya Bima Yojana (RSBY), commercial insurance and state-sponsored
schemes.
GSHIS coverage, the World Bank study said, is likely to be more than
double to 530 million by 2015, from 243 million in 2009-10.
Over 300 million people, or more than 25% of India's population, gained
access to some form of health insurance by 2010, up from 55 million in 2003-04,
the study said, adding that over half of the insured are from BPL families.
"The new generation of government sponsored health insurance

schemes is improving the use of public resources for health, especially
for the poor," World Bank Country Director (India) Onno Ruhl said.
the
The study, however, said the coverage remains far from comprehensive as
schemes
are
focused
on
in-patient,
often
surgical
care.
Besides working on deepening their benefit package, GSHIS also need to

address
several
operational
constraints,
the
study
said.
The study recommended increasing health insurance coverage for both outpatient and in-patient care to include all poor and near poor patients.
It suggests a balanced approach, building upon the public infrastructure
already available and augmenting it with accessible private capacity and utilising
the lessons learnt from the GSHIS.
It further said that the spending through health insurance mechanisms will continue
to increase at an estimated overall compounded annual growth rate of 19% to Rs
38,000 crore by 2015.
GSHIS will account for about 40% of the total expenditures, and the remaining
will be by commercial insurers," the study said.
Insurers and industry-watchers have given a thumbs up to Finance Minister

Arun Jaitley's proposal to extend health insurance cover of Rs 1 lakh to
economically weaker families.
19
He has also proposed a top-up cover of Rs 30,000 for senior citizens over the age
of 60 in this category.
"It was being talked about for some time and has finally come through now. It's a
positive development that will also help deepen insurance penetration," said
Bhargav Dasgupta, MD and CEO, ICICI Lombard General Insurance.
Reports of such an all-encompassing scheme have been doing the rounds since the
success of the government-promoted Pradhan Mantri Jeevan Jyoti Yojana
(PMJJBY) and Pradhan Mantri Suraksha Bima Yojana (PMSBY).
"Catastrophic health events are the single most important cause of unforeseen outof-pocket expenditure which pushes lakhs of households below the poverty line
every year," Jaitley noted during his Budget speech.
Senior citizens who are most vulnerable to ailments and resultant hospitalisation
will stand to benefit from the scheme, provided the scheme follows a lenient
underwriting policy. Most insurance companies either deny health policies to
senior citizens or charge prohibitively high premiums.
"The proposal for additional cover for senior citizens will help reduce the burden
of healthcare expenditure for the aged," said Sandeep Patel, MD and CEO, Cigna
TTK Health Insurance.
However, the exact contours of the scheme, including income eligibility, medical
underwriting, coverage for pre-existing illnesses and cashless network, are yet to
be spelt out. It also remains to be seen whether the government will fund the
premium or ask policyholders to share a part of the burden. Industry-watchers
believe it will be modelled on the lines of the twin insurance schemes rolled out
last year.
"Instead of funding hospitals, the government is looking at financing healthcare
needs, giving greater freedom of choice to individuals," said Mahavir Chopra,
head, health, accident and life insurance, Coverfox.com. "PMJJBY and PMSBY
have increased awareness about insurance and deepened penetration. As a result,
people are now realising the importance of health insurance too," said Chopra.
20
CHAPTER 8
THINGS TO KEEP IN MIND WHILE
PURCHASING A HEALTH INSURANCE POLICY:
A report by the International Federation of Health Plans showed that Indians
on an average spend US$236 (Rs 12,036) per day on hospital stay.With hospital
expenses rising every year, it has become a tough job for the common man to
balance his savings while meeting the inevitable medical expenses. A basic
procedure in a private hospital can cost you up to Rs 40,000. A heart surgery may
costs you between Rs 2 to 5 lacs at a branded hospital, enough to burn a hole in
your pocket. Having a comprehensive health insurance policy in hand could rescue
you from facing financial ruin while trying to foot such hospital bills.
The Indian health insurance sector is booming. The number of new healthy
insurance policies issued surged from 2,50,00,000 in 2002-2003 to close to
5,00,000 in 2010-2011, according to the IRDA. The hike in the insurance cap to
49% of FDI paved the way for multiple players in the insurance sector to offer a
21
plethora of health insurance plans designed to meet the different needs of the
people of our country. In such a scenario, with so many brands mushrooming with
their I am the best tags, it takes some thinking to find the best plan.
Things to Keep in Mind before Buying a Health Insurance Policy
Here are the most important factors to be kept in mind while choosing your health
insurance policy:
Policy Coverage:
Know your policy coverage. Read the information brochure carefully to
understand all its terms and conditions. There are several plans in the market that
offer variable coverage on their health plans. Choose the sum assured carefully.
This is the maximum amount that the insured person can claim in one policy year.
For this, one must consider rising medical costs, while also keeping the amount
such that one can afford to pay the premium.
When selecting your coverage, think about what needs could arise in the
Future. If you have ageing parents or may be planning on having kids soon, you
may consider these aspects. Look for a policy that covers wide age groups, such as
from children aged 91 days to dependent parents up to 65 years. You can either
choose an individual plan or a family floater health plan, as per your need. Most
preferred plans offer day care procedures, pre-hospitalization and posthospitalization expenses, accident coverage, and pre-existing disease cover after a
certain period of buying the policy.
Network Hospitals:
Insurance companies have empanelled hospitals, with which they have a tie
up. The hospitals in the network have instructions on how to settle claims from a
particular insurer. You should check which hospitals are within the network of the
insurance company, including their specialty and reputation.
Cashless hospitalization at network hospitals must be a key feature that your
health insurance policy offers. It ensures that you and your insured family
members get cashless treatment, while you get peace of mind from the exorbitant
medical bills.
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Exclusions & Waiting Period:

This is the most important factor to be considered. Read the exclusion
clauses in the policy document. What are the diseases which are not paid during
specific time period?
Does the policy covers pre-existing diseases. If so from when?? Is Most
policies offer a waiting period of 48 months for pre-existing diseases. It is
worthwhile to note that you should disclose your pre existing disease while buying
the policy to take the advantage of such cover
Flexibility in the Policy:

Cover in the policy should suit your/familys requirement. While you would
be requiring cover for expenses related to maternity, your parents would be keen in
getting a cover for pre existing disease as quicker as possible. Among various
offering in the market, one need to first chalk out what cover he wants & then
choose the correct plan. Care should be exercised to ensure that later he has right
to switch over to any other suitable product offered by the Insurer.
No-Claim Discount or Cumulative Bonus:

No Claim discount encourages the non claimant by giving a defined
reduction in renewal premium while Cumulative Bonus increases the coverage
amount in a defined way.
Check the most suitable option to suit your financial capability
Finally, make sure to read all terms and conditions carefully before finalizing a
health insurance policy. If not, you might have to face some unpleasant surprises
when you seek a claim
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CHAPTER 9
TOP GROUP HEALTH INSURANCE POLICIES
Apollo Munich Health Group Health Insurance Plans: these plans
provide substantial cover for so that accidents and illnesses, which require the
insured to be hospitalized, can be treated properly
The policyholders can also choose critical illness cover as part of their plan, which
also covers the following:
Diagnostic procedures
Surgery expenses
Lodging and boarding expenses
24
Prosthetic expenses
ICU costs
ICICI Lombard Group Health Insurance: the plan provides the following
coverage:
Medical expenses at the time of hospitalization that lasts in excess of 24
hours
Pre hospitalization costs for 30 days
High tech technological processes and surgeries where less than 24 hours'
hospitalization is necessary
Post hospitalization costs for 60 days
Following are the major benefits of this plan:

Customizable plan
Cashless service
Family floater options
Extended coverage for 9 important critical illnesses - this is provided in
addition to hospitalization benefits
HDFC Ergo Group Medical Insurance: the plan covers the following:
Room and boarding costs
Pre hospitalization costs
25
Nursing costs
Post hospitalization costs
Fees of surgeons, consultants, anesthetists, specialists, and medical
practitioners
Domiciliary hospitalization costs
Costs of anesthesia, blood, medicines and drugs, oxygen, diagnostic
materials and x-ray, operation theatre, dialysis, surgical appliances, and
chemotherapy
Day care treatments
Max Bupa Employee First Health Insurance: following are the major
advantages
of
these
plans:
Direct communication with company - no need for third parties

Medical costs for day care treatment
Choice to change group policy to individual plan upon retirement or change
of company
Single room accommodation without restriction on number of days and rents
Cashless facility at top hospitals
Health profile of all the members
Tax benefits
26
Top coverage so that the best medical treatment and advice can be provided
Diverse coverage in terms of age group of insured
CHAPTER 10
STEPS FOR CLAIM SETTLEMENT AT SBI LIFE
At SBI Life, we are committed to protect the interest of our Policyholders /
stakeholders and ensure that the Claim Amount is provided to the Nominee /
Beneficiary well within the prescribed timelines laid down by IRDA.
Claim Settlement Process is a simple 3 step process:
Step 1: Claim Intimation:
Intimate about the claim at any SBI Life Branch with all the documents as
mentioned in the policy document.
(For list of documents to be submitted with the Claim intimation, please
click here)
27
Step 2: Requirement submission (if any):

If there are any requirements raised by SBI Life for checking the admissibility or
otherwise of the claim, the same needs to be addressed by the Claimant.
Step 3: Final decision on the Claim: Throughout the Claim Settlement Process,
we are always there to assist in better understanding of the requirements and faster
completion of documentation process. For any further assistance on our claims
settlement process, please feel free to write to us at - claims@sbilife.co.in
For a seamless claim settlement process, the policy document also has a detailed
description of the documents required to be submitted along with the Claim
intimation.
The final decision on a claim shall be based on the disclosures made by the Life
Assured in the proposal form, since an insurance contract is a contract of Utmost
Good Faith. All the decisions are guided by the Insurance laws.
Health Insurance Claims Settlement Process:

In most cases, the Insurance companies appoint a Third Party Administrator (TPA)
for claims processing. That means once the health insurance policy is sold, the
insurer passes on the complete details to the TPA. In case of a claim, the insured
has to get in touch with the TPA for all verification and formalities.
Two Ways By Which Health Insurance Claims Are Settled:
Cashless:
For planned hospitalization at authorized network hospitals, the TPA has to be
notified in advance for availing cashless treatment or within the stipulated time
limits for emergencies. The insurance desk at hospitals will generally help with all
the paper work. The TPA has to approve the claim amount and the hospital settles
28
the amount with the TPA / Insurer. There will be exclusions which will have to be
settled directly at the hospital by the insured.
Reimbursement:
Reimbursement facility can be availed at both the network and non-network
hospitals. The hospital bills are directly settled at the hospital after the insured
avails the treatment. The insured can then claim reimbursement for hospitalization
by submitting relevant bills / documents for the claimed amount to the TPA.
The TPA mode of claims settling has its own problems. The TPA is incentivized to
limit insurance claims and they are not the ones who sell the policy. There are
many cases where the insured had a tough time to claim for his hospital expenses.
So before taking a health insurance policy, check who the TPA is and how good
they are when it comes to claims processing. Internet search and a friendly chat
with the hospital staff can give you good insight on the insurer / TPA. There are
also some health insurance providers who do not employ TPAs and manage claims
settlement directly which is called In-House TPA
CHAPTER 11
INSURANCE COS IN INDIA
Aviva Life Insurance
Bajaj Allianz Life Insurance
Birla Sun Life Insurance
HDFC Standard Life Insurance
ING Vysya Life Insurance
Life Insurance Corporation of India
Max Life Insurance Company

29
MetLife India Insurance
Reliance Life Insurance
Sahara India Life Insurance
SBI Life Insurance
Tata AIG Insurance Company Ltd
Om Kotak Mahindra Insurance Company
Agriculture Insurance Company of India Ltd
Amsure Insurance
ANZ Insurance
Chola mandalam General Insurance
Employee's State Insurance Corporation
ICICI Lombard General Insurance

IFFCO-Tokio General Insurance
National Insurance Company Ltd
Oriental Insurance Company Ltd
Peerless Smart Financial Solutions
Royal Sundaram Alliance Insurance India
Tata AIG Insurance Company Ltd
Export Credit Guarantee Corporation of India Ltd

30
CHAPTER 12
DIFFERENT COMPANIES IN HEALTH INSURANCE
CHOLA INSURANCE
Features of health claims
Proprietary Support team "Chola MS Help" to handle all Health Claims

requirements
Extensive network of over 2000 hospitals for cashless settlement
141 minor surgeries that require less than 24 hours hospitalization covered
under the UNIQUE day care procedure
31
Customer can track the status of the claim through our 24x7 Customer
Support team
Fair and quick settlement of claims with minimal documentation
Member login for Health Insurance
Corporate login for Health Insurance
List of network hospitals
HDFC ERGO HEALTH INSURANCE

Step 1
Get admission in network hospital.
Step 2
Intimate the call center about the hospitalization as soon as possible.
Step 3
32
Provide the health card of the patient along with the photo Id proof to the hospital.
Obtain the pre-authorization form from hospital and get the same filled in and
signed by the attending doctor.
Step 4
The hospital will fax/mail the pre-authorization form to the HCS/TPA along with
necessary medical details like investigation report etc at the number mentioned in
your Health Card/Policy Schedule.
Step 5
1. You will need to pay for all expenses that are not payable under the policy
2. Verify the bills and sign on all the bills
3. A photocopy of all the investigation reports & discharge summary for your
records is needed as the original will be retained by the hospital.
In case cashless facility is denied by HCS/TPA
33
A) You need to settle the hospital bills in full and collect all the original bill
documents & reports at the time of discharge
d) Register your claim with HCS/TPA for processing and reimbursement
2. Procedures for Claim Reimbursement -
Step 1
Get admission in hospital.
Step 2
Intimate the HCS/TPA about the hospitalization as soon as possible.
Step 3
Settle hospital bills in full and collect all the original bill documents & reports at
the time of discharge
Step 4
Register your claim with HCS/TPA for processing and reimbursement by
submitting duly filled claim form along with required documents as mentioned in
the claim form.
34
Documents require for claim process
Duly filled & signed claim form

All hospital bills in original including final hospital bill (with bill number
signed & stamped by the hospital) with itemized bill & original receipts
Discharge card or discharge summary (original) or death certificate in case
of death (in hospital)
All original investigation reports & medicine bills with doctors prescription.
Follow-up advice or letter for line of treatment after discharge from hospital
from doctor.
In case the hospital is not registered, please get letters on the hospital
letterhead mentioning the number of beds and availability of doctors and nurses
round the clock.
In case of non-network hospital, you may have to get the hospital and
doctors registration number in hospital letterhead and get the same signed and
stamped by the hospital, if required.
Important
information
As soon as there is a need for hospitalization, please intimate the HCS/TPA on
24x7 customer helpline number 1800 2 700 700 / 1800 200 1 999 as mentioned in
your
Health
Card/Policy
Schedule.
List
of
network
hospital
is
available
on
our
website.
You are required to furnish the following information while intimating a claim:
Contact Numbers
Policy Number (as on the Health Card//Policy Schedule)
Name of insured person who is hospitalized
Nature of disease / illness / injury
Date & time in case of accident/ Injury, commencement date of symptom of
disease in case of illness
Note - Please note failure to intimate HCS/TPA as soon as the hospitalization takes
place can invalidate your claim
35
Claims process
In case of hospitalization, intimation should be provided to the Company /
TPA immediately and not later than 7 days. In all other cases, the Company / TPA
must be informed of any event or occurrence that may give rise to a claim under
this Policy at least 7 days. Prior to any consequent treatment, consultation or
procedure being taken and the Company / TPA should pre-authorise such
treatment, consultation or procedure.
Any documentation and information requested to establish the circumstances
of the claim, its quantum or the Companys liability for the claim, should be
submitted within 10 days of our request or discharge from Hospital or completion
of treatment, whichever is earlier.
36
CHAPTER 13
DUTIES, POWERS & FUNCTIONS OF IRDA
Section 14 of IRDAI Act, 1999 lays down the duties, powers and functions of
IRDAI..
Subject to the provisions of this Act and any other law for the time being in
force, the Authority shall have the duty to regulate, promote and ensure orderly
growth of the insurance business and re-insurance business.
1.
Without prejudice to the generality of the provisions contained in sub-section

(1), the powers and functions of the Authority shall include, issue to the applicant a certificate of registration, renew, modify, withdraw,
suspend or cancel such registration;
protection of the interests of the policy holders in matters concerning
assigning of policy, nomination by policy holders, insurable interest,
settlement of insurance claim, surrender value of policy and other terms and
conditions of contracts of insurance;
specifying requisite qualifications, code of conduct and practical training for
intermediary or insurance intermediaries and agents
specifying the code of conduct for surveyors and loss assessors;
promoting efficiency in the conduct of insurance business;
promoting and regulating professional organisations connected with the
insurance and re-insurance business;
levying fees and other charges for carrying out the purposes of this Act;
37
calling for information from, undertaking inspection of, conducting

enquiries and investigations including audit of the insurers, intermediaries,
insurance intermediaries and other organisations connected with the
insurance business;
control and regulation of the rates, advantages, terms and conditions that
may be offered by insurers in respect of general insurance business not so
controlled and regulated by the Tariff Advisory Committee under section
64U of the Insurance Act, 1938 (4 of 1938);
specifying the form and manner in which books of account shall be
maintained and statement of accounts shall be rendered by insurers and other
insurance intermediaries;
regulating investment of funds by insurance companies;
regulating maintenance of margin of solvency;
adjudication of disputes between insurers and intermediaries or insurance
intermediaries;
supervising the functioning of the Tariff Advisory Committee;
specifying the percentage of premium income of the insurer to finance
schemes for promoting and regulating professional organisations referred
to in clause (f);
specifying the percentage of life insurance business and general insurance
business to be undertaken by the insurer in the rural or social sector; and
exercising such other powers as may be prescribed
38
CHAPTER 14
CURRENT AWARENESS OF IRDA
PERSONAL SAFETY
Holi is coming. Play it safely. Continuing the tradition of smearing color on
the faces of friends and throwing colored water in a playful manner on guests is a
hallmark of the Indian Festival Holi.
Historically, Holi, the festival of bright and cheerful colours, used to be
played with natural dyes made from henna leaves, margosa leaves, marigold
flowers, turmeric, kumkum and Gulal made from red sandalwood powder etc.
With changing times, chemical dyes and synthetic colours entered into the market.
These may contain dangerous toxins that have harmful effect on the human body.
Therefore, one has to be careful while using the colours for
playing holi; most of the modern colours are in fact chemical dyes and can cause
skin allergies. Some of the skin problems that could occur are itching, rashes,
dryness and irritation. Eyes are extremely vulnerable and need to be
protected since sometimes; these harmful colours come in contact with eyes
resulting in eyeinfection etc.
Why dont we all start using herbal colours made up of natural substances?
We should spread the message of not using chemical colours having harmful
substances such as lead and mercury etc. This is the first step of risk avoidance to
have a vibrant and safe holi.
One more aspect of danger is that the floor becomes slippery due to playing
with water colours. So while playing holi, avoid running or jumping on wet floors
as one may get injured due to slippery floors spoiling the mood of the day.
39
The second step is minimizing risk by applying oil on the skin and hair
before playing holi. This way, the dyes will not catch hold on to the body easily.
Using oil may help to minimize the side effects, even if some of the colours used
by friends happen to be chemical colours. And finally, one should never force any
one to play holi against their will.
Remember, it is all about taking a little care and exercising due caution even
while enjoying the Holi with your near and dear on
CHAPTER 15
CONCLUSION
In India, health insurance policies are on a huge rise. The Main health/life insurer
LIC is providing various benefits after purchasing of policies. Even the private
insurance companies like chola, hdfc life.sbi life, etc are the toughest competititors.
Hence, we can expect a more rise in health insurance in the future.
40
CHAPTER 16
REFERENCES
WEBLIOGRAPHY :
www.wikipedia.com
www.irdai.gov.in
www.hdfcergo.com
www.cholainsurance.com
www.slideshare.net
BIBILIOGRAPHY:
Principles & Practices of Banking & Insurance-Vipul Publications
Laws Governing Banking & Insurance-Vipul Publications
Innovations in Banking & Insurance-Vipul Publications
41
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