The Insurance Regulatory and Development Authority (Irda) has strongly come out in support of a government-backed health insurance policy, which is in the works with an aim to provide health cover to a large population.
“Why not we have a state-backed health insurance coverage for people when practically all the governments in the world have similar coverage for their citizens,” Irda chairman J Hari Narayan said. He was referring to a meeting of a group of experts in the Planning Commission today on the new health insurance scheme.
Stating that it could be on the lines of the existing Rashtriya Swasthya Bima Yojana, he said they had to see the contours of the scheme once it was ready. But there were risks involved with a government-backed health scheme and one such could be that the pricing may go up, he added.
Hari Narayan was addressing the launch of Health Forum, a self-regulatory body constituted by Irda to address the issues of the health insurance sector, here on Thursday.
According to the chairman, government-sponsored health insurance schemes in the country provide cover at various levels to 189 million people while in the non-government sector 22 million people are covered under group schemes and 7 million people under individual policies. Per capita pricing of these policies stands at Rs 110 in government schemes, Rs 219 in group health insurance schemes and Rs 5,500 in individual policies.
Though the per capita price is lower in government schemes they are more efficient in terms of loss ratio, especially those underwritten by public sector health insurance companies. The health insurance sector in the country is growing at 45 per cent and would soon touch Rs 35,000 crore in business this year, he said.
Comprehensive health insurance regulation
Irda will notify a comprehensive health insurance regulation after taking into account the issues of non-standardisation of procedures, coverage of patients with HIV/AIDS and mental illnesses and the prospect of the bringing Ayush (alternative medical systems) into health insurance. “We will bring the regulation after the Health Forum takes a look at it and comes up with its recommendations,” he said.
The consultative body includes General Insurance Council (non life), Life Insurance Council, multistake holder groups of Federation of Indian Chambers of Commerce and Industry (Ficci) and the CII, and the Health Forum formed with the representatives of health insurance companies, third party administrators, hospitals and other stakeholders.
May act against unviable products
Coming down heavily on unviable practices adopted by companies, especially in areas of group schemes, Hari Narayan said nothing prevented Irda from taking action against such practices. "So far we maintained our restraint, which will not last forever," he said, stating the regulator might prohibit companies from marketing such products.
Referring to rising complaints from policyholders in the health insurance sector, he said unhealthy pricing practices had been putting a lot of stress on management of the companies leading sometimes to refusal of the claims. However, he ruled out prescribing the pricing either of policies or of healthcare services and said it was up to the companies and the self-regulatory body to handle the issue.
The loss ratio in group health insurance schemes ranges from 94 per cent to 112 per cent while Irda maintains the ideal loss ratio should be around 75 per cent.
