Opting for restricted hospital network can lower premium by 5-20%

MUMBAI: Private health insurance companies have for the first time are offering a choice of restricted network of hospitals under group mediclaim policies that will reduce the cost of premium by 5-20%, a move that will come as a relief to firms that have been complaining of rising premiums.

"Three companies in information technology, manufacturing, real estate and construction have opted for the restricted network hospitals scheme that has helped them reduce their health costs," said Sanjay Datta, head of underwriting ICICI Lombard. "We are looking to offer 5-20% discount to companies opting for restricted network of hospitals."

Over the years, group mediclaim costs have been rising for employers in this fast growing segment. Insurers are expecting the sector grow at 12%-15% on a year-onyear basis, and in the overall Rs 22,000-crore health insurance industry, group health comprise about Rs 10,000 crore-Rs 12,000 crore.

The industry has been seeing claims outstripping premium over the past several years.

"The future of group medical has to be network-driven," said Shreeraj Deshpande, head of health, Future Generali General Insurance. "Today, hospitals are not graded by way of cost, service or quality. If there’s an independent body grading hospitals, it will make it easier for insurers to offer restricted network of hospitals."

Companies have been complaining about the rising cost of health insurance. Earlier, group mediclaim was offered at huge discounts of up to 80% with fire policy.

But after tariff was freed in 2007, companies started charging, but still prices did not correct according to the claims in the sector.