No Cashless Gain For Mediclaim Policy Holders

Lakhs of existing Mediclaim policyholders will not be able to benefit from the cashless hospitalisation programme to be shortly introduced by the state-owned insurance companies.

On account of logistics and want of a centralised database system, only new customers of Mediclaim cover will benefit once the product is launched. Introduction of a cashless hospitalisation system result in the insurance companies directly settling the claims with the hospital through their appointed third-party administrators.

"The problem in offering the product to existing policyholders lies in the logistics. It becomes difficult for us to go back to the lakhs of policyholders and tie up with our TPAs in terms of the cashless treatment they can avail of from specific hospitals," said a senior official from the New India Assurance Company.

Under the cashless treatment facility, TPAs will directly settle the hospital bills so that the policyholder need not initially make any payments and then seek reimbursement from the insurance company.

Appointed TPAs have tied up with various hospitals where customers can avail of the cashless product. Under the proposed new method of directly settling hospital bills, new Mediclaim policyholders will be notified as to which hospitals and health establishments they can avail of the cashless health treatment, officials said.

Bajaj Allianz General Insurance Company has already introduced cashless hospitalisation in the country, which is competitively priced with that of state-owned Mediclaim cover. This has been possible through its tie up with TPAs.

The four state-owned insurance companies -- The New India Assurance Company, National Insurance Company, Oriental Insurance Company and United Insurance Company -- are in the process of appointing the empanelled TPAs as identified by the General Insurers' Public Sector Association (Gipsa).

Ten TPAs were shortlisted by the association with two key objectives: to set up a cashless hospitalisation system, and to bring down claim ratios and costs by plugging loopholes through the interaction between TPAs and hospitals/nursing homes.

Today, health insurance under the Mediclaim plan is a loss-making proposition. Loss-claim ratios stand in the region of 130 per cent upwards. In the cases of corporate groups, the losses rule as high as 300 per cent.

Gipsa had in the terms and conditions for appointment of TPAs across the four zones -- west, east, north and south --pointed out that selected TPAs would need to tie up with at least five hospitals at the state capital level in respect to the zones of operation, as well as two hospitals at other centres to service policyholders.