Our money: overcoming the challenges of the health insurance sector


The development of new standards also means that current methods of underwriting and risk assessment must change. Products need to be restructured to ensure more comprehensive coverage and minimum deductions.

By Krishnan Ramachandran

With the world grappling with the coronavirus pandemic, the focus is renewed on health and health insurance. However, even today very few Indians have health insurance. India has one of the highest rates of personal health care spending in the world. Even among the growing number of the middle class, for whom health insurance would be a worthwhile investment, very few understand the value of an insurance plan. But that could change – a recently conducted Max Bupa Covid-19 survey found that before the pandemic only 10% of those surveyed were eager to purchase health insurance but after the pandemic that number is 71% – people considering now health insurance as a necessity. However, intention aside, there are other aspects that the industry must address in order to revitalize its growth. Here are a few.

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Extension of coverage
Digital health is here to stay as we are likely to see an increase in telemedicine and online video consulting services as well as remote chronic care management. These services should be part of health insurance offerings in the future. In addition, doing business virtually will be the new normal, whether through digital channels or some of the more traditional channels becoming digitally enabled. Going forward, we should see a disproportionate growth in assisted and unassisted purchases on corporate websites and through aggregators.
Digital technologies, including automation, AI, and data analytics, are emerging as powerful tools to help create better deals and improve processes. Technology is affecting other aspects of the industry as well, including diagnostics, hospital care, care delivery mechanisms, analysis, risk assessment, etc. the goal of universal health coverage for all.

Create industry standards
New standards from the Insurance Regulatory and Development Authority of India (Irdai) state that health coverage will now be accompanied by wellness and preventive measures and that policyholders can get rewards for joining a health insurance plan. healthy well-being, which stimulates the sector. This is expected to drive the growth of health insurance products while benefiting customers. Insurers can now reward customers in a number of ways – discounted outpatient consultations or treatment, medications, checkups and diagnostics, vouchers redeemable for health supplements with membership in fitness centers , sports clubs, etc.

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New illnesses contracted after purchase of the contract (other than those prescribed by Irdai) cannot be excluded. The treatment of mental illnesses, stress or psychological and neurodegenerative disorders has been placed under the responsibility of health insurance.

The next step
The development of new standards also means that current methods of underwriting and risk assessment must change. Products need to be restructured to ensure more comprehensive coverage and minimum deductions. According to the industry’s own assessment, consumers end up paying 25-30% of the total cost of the treatment out of their own pocket, despite being insured. Providers therefore need to do a better job of balancing price interest against margin, to enable the industry to overcome existing challenges and expand its reach.

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The writer is MD and CEO, Max Bupa Health Insurance

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