Start early to get maximum benefit

There is an increasing awareness about the need for an adequate health insurance cover. Reliance General Insurance CEO and president KA Somasekharan about the current industry trends and the best way to get the most out of health insurance. Excerpts :

What do you think are the emerging trends and key challenges for the health insurance sector?

The health insurance market in India has not developed to its potential. There is lack of basic awareness on the need of health insurance. Lack of healthcare infrastructure, illiteracy and rejection of health insurance products by masses because of high prices or lack of trust are some factors for it. Major challenge is to take this product to the masses and make it acceptable. Insurance companies have also not innovated their product offerings and continue to offer plain vanilla plans to customers. There is a need to understand the customer segments, create awareness beyond metros and offer value-added products to suit different needs across various segments.

What should be key points an individual should keep in mind while considering healthcare/ mediclaim insurance policies?

It is important to start early so that policyholders can avail maximum benefit from their policy. The coverage for each member should be adequate to meet hospitalisation expenses in case of an eventuality. The credentials of the insuring company and its service capabilities need to be considered before buying a policy. With deregulation of the sector, insurance companies will offer specialised policies that suit individual needs.

How will detariffing affect this sector?

Individual health insurance will not be affected by deregulation of tariff expected from January 1. In fact, the prices may come down marginally as the sector is profitable. Insurance companies will also be able to provide tailor-made policies as per individual needs.

However, in case of group insurance there is heavy cross subsidisation and it is a loss-making proposition for companies. Post deregulation, this cross-subsidisation may not be there and the premium prices of these policies would go up depending on product coverage and claim experience.

What are your views on the third party system for cashless mediclaim? Is it better than the earlier systems?

Cashless facility has certainly made health insurance relevant in times when treatment costs are skyrocketing. Today a person just walks into an approved hospital and walks out without botheration of arranging huge finances for paying for his treatment and then waiting to get reimbursed. This feature has encouraged a sizeable portion of middle class segment to now take up medical insurance.

What according to you is the good system wherein medical costs could be kept low, hospitals recover and still insurance companies do not make a loss?

There is a need to ensure better transparency norms between the insurance companies, hospitals and the insurer. Hospitals need to standardise treatment protocols (barring exceptions), insurance companies need to act faster and patients need to be more informed about the treatment.

What is the global practice as far as this is concerned?

Both in the US and European markets, there is uniformity in the treatment protocol for individual diseases and the hospitals follow a uniform documentation, coding. There is also to a greater extent transparency in medical cost and claim. This process ensures that the patient gets the best treatment, the hospital is not able to overcharge and the insurance companies are able to settle claims faster.

Is it a solution that insurance companies work in a tie-up with hospital chains?

Third party administrators are already working on behalf of the insurance companies to facilitate and expedite treatment for the insured. This process has helped the insured to get access to better hospitals and also reduced false claims for insurance companies. We just need to scale up this process beyond metros and mini metros.

What are the key highlights of Reliance GI’s mediclaim policies?
We are in the process of launching a health insurance policy that aims at offering innovative and value-added features. The policy provides financial protection to policyholders in critical times of hospitalisation. It is a unique policy that offers benefits like family floater cover, donor expenses cover and coverage of pre-existing diseases after two years, in addition to the features offered under regular plans.