Penetration of Health Insurance Sector in Indian Market of Health Insurance Sector in Indian Market...

www.cpmr.org.in Opinion: International Journal of Management 55

ISSN: 2277-4637 (Online) | ISSN: 2231-5470 (Print) Opinion Vol. 3, No. 1, June 2013

Penetration of Health InsuranceSector in Indian Market

M. Akila*

ABSTRACT

Health insurance is a contract between the insurancecompany and the insured person to cover the medicalcost that might arise from illness, accidental injuries,surgeries and other medical complications. Over thelast 50 years India has achieved a lot in terms ofhealth improvement. But still India is way behindmany fast developing countries such as China,Vietnam and Sri Lanka in health indicators (Satiaet al 1999). In case of government funded healthcare system, the quality and access of services hasalways remained major concern. A very rapidlygrowing private health market has developed inIndia. This private sector bridges most of the gapsbetween what government offers and what peopleneed. However, with proliferation of various healthcare technologies and general price rise, the cost ofcare has also become very expensive andunaffordable to large segment of population. TheMarketing of Health care insurance policies becomeparamount important to help people to meet outthe untoward expenses arising out of unexpectedailments. It will be a win-win situation for Public

and companies of increasing the penetration ofhealth care insurance products to its fullest potential.The benefit of health insurance has to be extendedto the so for excluded. Clearly there is an urgentneed to expand the health insurance net in India. InIndian Context, The Liberalization of the insurancesector as well as the increasing demand for healthinsurance covers, especially from the middle class,have given a fillip to the growth of health insuranceand today the sector is emerging as fastest growingsegment in the non-life insurance industry. In 2006-07, health insurance premium stood at more thanRs.3200 crore registering an increase of 35 per cent1.Over the last five years the premium has nearlydoubled. Since the health insurance sector isbooming in Indian market .huge opportunities areopened for international health insurancecompanies.

CONCLUSION

It was concluded that the health insurance sectorhas a greatest potential in India and the penetrationto be exercised faster by means of various marketing

*Research Scholar, Manonmaniam Sundaranar Univeristy, Chennai – 600 025, India



activities like Micro-insurance, Extensive coverageof ailments, Improving the Reimbursementmachinery, encouraging Individual policy holders,and employing highly competent and serviceoriented agents etc.

Key words:Health Insurance, Private Sector, International InsuranceSector, Insured People.

CHAPTER 1I. INTRODUCTION

Research Background

Definition: Health InsuranceHealth insurance in a narrow sense would be ‘anindividual or group purchasing health care coveragein advance by paying a fee called premium.’ In itsbroader sense, it would be any arrangement that helpsto defer, delay, reduce or altogether avoid payment forhealth care incurred by individuals and households.

Healthcare in IndiaHealth is always a priority in India. While India has madesignificant gains in terms of health indicators -demographic, infrastructural and epidemiological, itcontinues to struggle with newer challenges.

The country is now in the midst of a dual diseaseburden of communicable and Non-communicablediseases. This is coupled with spiraling health costs, highfinancial burden on the poor and erosion in their incomes.

Table 1India’s Socio economic indicators and achievements

II. GROWING HEALTHCARECOST IN INDIA

Though India has experienced a rapid increase of privateplayers in healthcare, facilities at public hospitals aregrossly lacking. Public hospitals have failed to providefree and low-cost quality care to people. As a result,there is an increased financial burden which is found tobe one of the important reasons of indebtedness in ruralareas. Moreover, public health financing is alsoinadequate in meeting the rising cost of healthcare. Thisis due to the focus of public finance on disease controlrather than on the well-being of the person. At the sametime, due to high-value diagnostics and drugs, the costof healthcare has gone up drastically.

Government expenditure on healthcare in India isfar below that of other developing countries.According to the World Health Organization Reportpublished in 2002, India ranked thirteenth from thebottom in terms of public spending on health.



Figure1Government expenditure on public health

In light of the fiscal crisis facing the government atboth central and state levels, in the form of shrinkingpublic health budgets, escalating health care costscoupled with demand for health-care services, and lackof easy access of people from the low-income group toquality health care, health insurance is emerging asan alternative mechanism for financing of healthcare.

III. HEALTH INSURANCE IN INDIAHealth insurance in the form of healthcare financing(Mediclaim) was introduced in India in 1986-1987 byfour subsidiaries of General Insurance Company(GIC) to support the ailing healthcare industry. Theyare,

• The New India Assurance Company,• Oriental Fire and Insurance Co.,• National Insurance Co., and• The United India Insurance CoIn recent years, there has been a liberalization of

the Indian healthcare sector to allow for a much-neededprivate insurance market to emerge. Due to liberalizationand a growing middle class with increased spendingpower, there has been an increase in the number ofinsurance policies issued in the country. In 2001 withentry of various private Insurance companies now the

customers have choice of buying this insurance fromvarious Insurance companies.

The Insurance Regulatory and DevelopmentAuthority (IRDA) eliminated tariffs on general insuranceas of January 1, 2007, and this move is expected todrive additional growth of private insurance products.

IV. IDENTIFIED PROBLEMIn spite of above developments, Health insuranceremains vastly under-developed in India. Only 11% ofpopulation is presently covered with Health Insurance.

Around 24% of all people hospitalized in India in asingle year fall below the poverty line due tohospitalization (World Bank, 2002). An analysis offinancing of hospitalization shows that large proportionof people borrows money or sells assets to pay forhospitalization (World Bank, 2002). Majority of Indiansare more vulnerable to Major ailments.

The Marketing of Health care insurance policiesbecome paramount important to help people to meetout the untoward expenses arising out of unexpectedailments. It will be a win-win situation for Public andcompanies of increasing the penetration of health careinsurance products to its fullest potential. The benefit ofhealth insurance has to be extended to the excludedpopulation-poor people also. Clearly there is anurgent need to expand the health insurance net inIndia

NEED FOR THE STUDY

5 Reasons why Health Insurance is a must:

Indians at greater risk

• Reason 1: Lifestyles have changed. Indianstoday suffer from high levels of stress. Long hoursat work, little exercise, disregard for a healthybalanced diet and a consequent dependence onjunk food have weakened our immune systemsand put us at an increased risk of contractingillnesses.



• Reason 2: Rare non-communicable diseasesare now common. Obesity, high blood pressure,strokes, and heart attacks, which were earlierconsidered rare, now affect an increasing numberof urban Indians.

Shocking Truths• 18% of the urban population suffers from

hypertension, which leads to renal failure, strokeand cardio-vascular diseases

• 30% of the population suffers heart attacks beforeage 40

• 66% of deaths today are due to cardio-vasculardiseases

• Almost 3.5 million Indians suffer from diabetes• Cardio-vascular diseases (CVDs) like heart

disease and stroke are the main causes of deathand disability

The Cost Factor• Reason 3: Medical care is unbelievably

expensive: Medical breakthroughs have resultedin cures for dreaded diseases. These cures,however, are available only to a select few. Highoperating expenses—therapy for breast cancercosts as much as Rs. 2 lakhs for 3 days—haverestricted treatment to the richest. In fact, evenamong the affluent groups, 20% need to sell theirvaluable assets so they can accumulate the requiredamount to meet healthcare costs.

• Reason 4: Indirect costs add to the financialburden: Indirect sources of expense—travel,boarding and lodging, and even temporary loss ofincome—account for as much as 35% of theoverall cost of treatment. Most often, we overlookthis fact when planning for medical expenses.

• Reason 5: Incomplete financial planning:Most of us have insured our home, vehicle, child’seducation, and even our retirement years. Ironicallyhowever, we have not insured our health. Weignore the fact that illnesses strike withoutwarning—and seriously impact our finances and

eat into our savings in the absence of a good healthinsurance or medical insurance plan. Over twothirds of all Indians sell assets or dip into existingsavings to meet healthcare costs.

Figure.1.2Health care Cost ratio for a patient.

V. OBJECTIVE AND SCOPEThe objective of the study is to analyze the opportunitiesfor the health insurance sector and to identify thechallenges for the growth of Health Insurance industryunder the following sections:

1. Hospital related issues2. Insurance policy related issues3. Policy holder’s issues4. TPAs & Insurance company related issues5. Govt related issues etc...

The information’s will be acquired by means ofPersonal interviews and Questionnaire.

Target respondents are Policy providers, Healthcare providers and Customers.

This study is attempted to suggest some strategicMarketing options for enhancing the penetration ofhealth insurance products.

Tools for Analysis1. Percentage Analysis2. Pie charts



3. Bar Diagrams4. Tabulation Analysis.

CHAPTER 4VI. DATA ANALYSIS AND

INTERPRETATION

Table 1Target Respondents

Customers Doctors Insurance Policycoordinators providers

No of target 100 50 4 4respondents

Male: Female Ratio 85:15 38:12 3:1 4:0

Figure.4.1Target respondents break-up

Figure.4.2Male: female Ratio of target respondents.

Table 4.2Data analysis of target respondents

Particular NumberTotal of surveyed customers 100Age, Years <25 years 12

25-35 2435-45 32>45 32

Awareness of health insurance Yes 43No 57

Table.4.3Other particulars of Target Respondents.

Particulars Parameter PercentQualification HSC 8

Graduate 46Post graduate 29Other 17

occupation Farmer 10Business 22Employed Retired employees 608

Figure.4.4Insured Customers Statistics

Particular No of insurers Percentage

Males 13 81.25

females 3 18.75

Insured for self. 5 31.25

Insured for dependants too 11 68.75

Corporate customers 12 75

Individually taken 4 25

Table.4.5Channel of awareness& convertibility

Channel of awareness No of Insured Percentage ofcustomers convertibility

Advertisement 15 1 6.66

Friends&Relatives 5 2 40

Employer initiated 7 7 100

Insurance company agents 10 5 50

Health care professionals 6 1 16.66

Total 43 16 37.20



Table.4.6Penetration of Companies.

Company No of customers Percentage

Star health 4 25

ICICI 2 12.5

Bajaj-alliance 2 12.5

Oriental Insurance 1 6.25

United India 2 12.5

Royal sundaram 1 6.25

Apollo DKV 2 12.5

IFFCO-TOKYO 1 6.25

LIC 1 6.25

Table.4.7Reasons for poor penetration (opportunities to

explore)

Reason yes percentage Inference

Lack of awareness 25 46.29 Lack of awareness is amajor issue.

Less tax benefits 6 11.11

Lack of individualizedmarketing of

Insurance companies 10 18.5 Tailor made- customer needbased products are required

Bad experience 5 9.25 The reimbursement or claimapproval mechanism shouldbe simple.

Major diseases 8 14.81 Diabetics and other notcovered diseases to be covered.

Figure 4.3Reasons for taking Health Insurance

Figure 4.4Optimum amount to be sum assured for below and

above 40 years of age

Compilation of Inferences received DuringInterviews with policy providers and InsuranceCoordinators.

Figure 4.5Standard health insurance model:

From the above diagram,We can see that there are THREE stake holders in

the Health Insurance Model.1. Policy Providers(government/Private)2. Customers3. Health Care Providers.

Other than these the Two more parties importantlyinvolved in the process are TPA(Third partyAdministrators and the Regulator.



Present Scenario of Health insurance Marketin India:The development of health insurance in India is areflection of broader policy changes that are being feltin the Indian economy. As a part of its financial sectorreform agenda, the Indian Government liberalized theIndian insurance industry by the enactment of theInsurance Regulatory and Development Authority(IRDA) Act by the Indian Parliament in 1999. This ledto the opening up of the sector for participation of privateinsurance companies. Prior to liberalization, the insurancesector consisted of the government-owned LifeInsurance Corporation of India that had a monopoly onlife insurance business and the General InsuranceCorporation (GIC)of India and its four non-lifesubsidiaries namely, National Insurance Co., New IndiaAssurance Co., Oriental Insurance Co. and United IndiaInsurance Co. The results of liberalization have beensignificant. Since 1999, IRDA has licensed 24 newprivate insurance companies, of which 21 have foreignequity participation. Major global players like Aegon,Fortis, Future Generali, Principal and Dai-Ichi havetied-up with Indian partners to set up life insuranceoperations. Health insurance remains vastly under-developed in India. The regulations only permit generalinsurance companies to offer stand-alone healthinsurance products, while life insurers are allowed tooffer riders such as critical illness cover attached to basiclife policies – although subject to certain restrictions.Health cover premiums, however, account for less than1 per cent for life insurers and 10 per cent for generalinsurers of total premiums. Following figure shows themarket share of private and public sector non-lifeinsurance companies in terms of new business premiumsfrom the health segment.

Present Players In Health InsuranceIndustry:We can divide them as THREE categories.

1. Stand alone health insurance companies2. Health Insurance from General insurance

companies

3. Health Insurance from Life Insurance Companies.

TPAs:In 2001 the IRDA introduced provisions for Third PartyAdministrators (TPAs) to support the administration andmanagement of health insurance products offered byinsurance companies. TPAs are facilitators in thecoordination process between the health insuranceprovider and the hospital. Currently there are 27 TPAsregistered under the IRDA.

VII. CONCLUSIONSSUMMARY OF FINDINGS

Findings from Customers:• Age is the Major criteria for Hospitalization:• Out of 100 customers met, the patients above 35

years are 64%.This also indicates that 34% ofyoung patients (below 35 years) are hospitalizedand are more vulnerable for diseases.

• Among the Responded Customers, Males aremore in number than females.

• Educationally qualified customers-60%• Forty Three percentage of patients (43%) are

aware of Health Insurance products .This dataindicates that the remaining dominant group ofpeople (57%) are unaware of Health Insurance.

• Majority of patients are willing to avail Cashlessfacility rather than claim procedure. The Reasonfor cashless priority is the ease of procedure.

• In the contrary, the claiming patients say that theycan avoid high billing in hospital front thereby theycan preserve some money for future expenses.

• Among 100 patients questioned, only 16% ofpatients are insured for Health.

• Among Insured patients, Majority of them preferfamily insurance rather than Individual Coverage.11out of 16 patients wants to protect theirdependants with Health Insurance coverage.



• Among Insured customers, the corporatepersonals are more.(i.e) 75% of them are coveredby their companies.

• Only 25% of patients have taken Insurance ontheir own. This indicates that still the major junkof business for Health Insurance industry comingfrom corporate business rather than Individualpolicy holders (unlike Life insurance)

• Channels of Awareness and Convertibility:Advertisements place a major role in terms ofenhancing the awareness level. However theRealization or Convertibility is achieved by meansof various sources.

• This survey indicated that the convertibility ispossible through Employer Initiation (100%),Insurance company agents (50%), through friendsand Relatives (40%) and as per the suggestionsof Health care professionals (16.66%).Thisindicates that the penetration can be made fasterby means of competent Insurance agents and alsoby mobilizing Health care Professionals.

• FORTY THREE percentage (43%) of patientshave answered that they have taken insurance forSafety and Tax benefit (Both).38% of patientstaken for safety. only 19%of patients taken forTax. This indicates that the unemployed and lessearning population also can be focused to enhancethe penetration.

Findings from Health Care Professionals:• Majority of Male customers met.

• 70%of them are Super specialists.30% are generalpractitioners.

• Every one insists that Health Insurance is must toall individuals of this country.

• Less than 10% of their patients are adequatelyinsured. This indicates that there is an urgent needfor increasing the penetration of health insurance

among public and awareness for the sum assuredalso to be increased.

• 60% of doctors say that the High risk patients(above 40 years of age) have to be insured formore than 3 Lacs.

• For less risk patients 1-3 lacs sum assured isenough.

• 20% of doctors expressed that for above 40 yearsof age the sum assured should be more than 5lacs.

Findings from Interviews held with Policyproviders and Insurance Coordinators:Based on the discussion the outcome is enumerated herewith the following titles:

• Growth opportunities

• Challenges

• Suggestions to overcome the challenges there byenhancing the Penetration of Health Insurance inIndia.

The Output of Questionnaire from Customers andDoctors also incorporated in suggestions.

Growth Opportunities for Health Insurancein India:

1. High Potential market:India is a developing nation with the grooming populationof more than 1.1 billion people. However, 11% of theIndian population only has health insurance coverage.

The majority of the Indian population is unable toaccess high quality healthcare provided by privateplayers as a result of high costs. Many are now lookingtowards insurance companies for providing alternativefinancing options so that they too may seek better qualityhealthcare. This industry is expected to face tremendousgrowth over the next few years as a result of severalprivate players that have entered into the market.



Table.5.1Market size. Health Insurance

Goldman Sachs2 predicts that the Indian economywill expand by at least 5% annually for the next 45 years(see chart), and that it will be the only emerging economyto maintain such a robust pace of growth.

Figure.5.2India’s growing economy

The growing segment of “middle class people” inIndia also an opportunity to enhance the insurancebusiness. India’s thriving economy is driving urbanizationand creating an expanding middle class, with moredisposable income to spend on healthcare. While per

capita income was $620 in 2005, over 150 millionIndians have annual incomes of more than $1,000, andmany who work in the business services sector earn asmuch as $20,000 a year.

Figure.5.2Growing Middle class in India.

If the economy continues to grow faster than theeconomies of the developed world, and the literacy ratekeeps rising, much of western and southern India willbe middle class by 2020.

2. Increasing HealthCare Cost.

Medical care is unbelievably expensive: Medicalbreakthroughs have resulted in cures for dreadeddiseases. These cures, however, are available only to aselect few. High operating expenses—therapy for breastcancer costs as much as Rs. 2 lakhs for 3 days—haverestricted treatment to the richest. In fact, even amongthe affluent groups, 20% need to sell their valuable assetsso they can accumulate the required amount to meethealthcare costs

Figure.5.2 Health care cost ratio for a patient.



3. Growing awareness about HealthInsurance

Unlike before more companies are operating in marketplace and they are bringing in more products to suit alltypes of customers.

The employers are compulsorily enrolling theiremployees under the health insurance coverage trend isincreasing so as the employees families also covered.

The increasing literacy level helps to improve theawareness level.

Aggressive marketing activities of insurancecompanies certainly increased the awareness.

4. Community Based Health Insurance:Emergence of Self helps Groups, NGOs

Health insurance in India is one area that requires moreattention on the part of the government and privateinstitutions/organizations. Most insurance schemes onthe ground are aimed at the middle and upper classesof Indian society; urban and rural populations arefrequently neglected from receiving such services.

People are in part of many associations like selfhelp groups (Women), students forum, Professionalsgroups etc.NGOs-Non governmental associations areon the rise and are interested and taking initiatives toget covered with Health Insurance for their members.This is a positive trend.

5. Government initiatives for HealthInsurance:

In the recent past, various state governments have begunhealth insurance initiatives. For instance, the AndhraPradesh government is implementing the AarogyaRaksha Scheme since 2000, with a view to increasethe utilization of permanent methods of family planningby covering the health risks of the acceptors. All peopleliving below the poverty line and those who acceptpermanent methods of family planning are eligible to becovered under this scheme. The Government of AndhraPradesh pays a premium of Rs 75 per acceptor. Thebenefits to be availed of include hospitalization costs up

to Rs. 4000 per year for the acceptor and for his / hertwo children for a total period of five years from date ofthe family planning operation. The coverage is forcommon illnesses and accident insurance benefits arealso offered. The hospital bill is directly reimbursed bythe Insurance Company, namely the New IndiaAssurance Company.

Tamilnadu government has initiated a HealthInsurance coverage plan for its employees in associationwith Star health and Allied insurance Company ,therebyit protects 13 lakes families ( 50 lakhs individuals) arecovered. This policy will cover the employees, their legalspouse& children, or their parents of all stategovernment departments, state public sectorundertakings, local bodies, State government universitiesand all statutory boards under the control of Tamil naduGovernment.

The Insured are having coverage for Rs.2 lakh fora period of FOUR years.

These are small initiations and encouraging this kindof group insurance in other states also will lead to betterpenetration.

6. Recent Developments.The following developments help the insurance sector’sgrowth in India at faster rate.

1. Emergence of Stand alone health InsuranceCompanies.

2. Health Insurance products to suit all sections ofthe society

3. Specialized Health Insurance Products.4. Buying Insurance Products Online5. Increase in Employer oriented Schemes including

cover for retired employees.6. Payment of Premium through Credit Card.7. Personalized Claim settlement.8. Increase in number of distribution channels.9. Value additions in services using technology.

10. Shift from health insurance to health Care.



VIII. CHALLENGES AHEADThe following issues are prevailing in the market placewhich prevents the further penetration of Insurancesector. Those Issues are enumerated here in aspect ofall stake holders.

Hospital related:• Overcharging by some health providers from

insured persons.• Differential rates for cash and insurance patients

in hospitals.• Average length of stay (ALOS) is high in nursing

home/hospitals where occupancy is low.• Manipulation of the patient history.• Some hospitals at present are extracting maximum

permissible claim through nexus with client.• Different tariff rates for similar services in various

hospitals.• Unrelated investigations are on the rise, increasing

healthcare cost. Moreover, because of rise ofcases in consumer courts, hospitals do not wantto take a risk and rely more on several investigationreports.

Insurance Policies RelatedInsurance products are not designed properly at manyoccasions, creating confusion. Here are a few pointsyet to be taken care of:

• Premium is too low for the sum assured. Averagepremia is between one-two per cent of the sumassured, as compared to two-three per cent indeveloped countries.

• Low competition and inadequate range ofproducts.

• There is no ceiling on room categories as per thesum insured, so all patients wish to get admitted inspecial rooms/suites. Currently, a person with Rs50,000 sum insured and a member with Rs7,00,000, both want to get into the deluxe roomsor suites.

• Policy exclusions are not clearly defined. Forinstance, if a person while taking insurance issuffering from hypertension and hyperlipidemia, itneeds to be clear in the policy exclusion thatcardiovascular diseases will not be covered; ratherthan mentioning treatment of hypertension andhyperlipidemia will not be covered.

• Need for a medical check before thecommencement of the policy, if feasible

Policy Holders• Members converting outpatient procedures as

inpatient. Approximately, six-seven per cent ofpeople covered lodge a claim compared to 3.2per cent of population with inpatient episodes.

• Fraudulent claims are on the rise.• Younger age groups are not encouraged to buy

insurance.• Persons with high probability to fall sick buy

insurance.• Healthcare spending of population with insurance

is thrice that of the population without insurance.

Insurance Company related:• Non-life insurers prefer group policies. Individual

policyholders are not a priority• Insurers are reluctant to be in the business. No

stand-alone health insurance player in the market,other then Star Health and Allied Services andApollo DKV who have entered the sectorrecently.

• Life players offer critical illness riders.TPAs

• Managing cost is the biggest problem as rates arenot controlled by TPAs.

• Minimum standard of care is not clearly defined.• Choosing appropriate service provider is

becoming a challenge.• Claim settlement, especially of mediclaim, takes

longer time.



• Small nursing homes and some of the hospitalsare being avoided by TPAs to avoid unnecessarydocumentation.

• No common terminology for disease and groupingof disease.

• No appropriate data about incidence of diseaseand to measure level of risk.

• No date for post surgery complication rates.• No information about hospital infection rates.

IX. OVERCOMING CHALLENGESTHEREBY ENHANCING THE

PENETRATION IN INDIA:As Insurance is the protection for high healthcare cost,it is time for all stakeholders to join hands to overcomethe challenges for survival of the industry. Regulationsand managed insurance market can also play animportant role in moving health financing towards greaterequity. The Recommended strategies are listed belowin view of Various Stake holders.

Hospitals• Accreditations and standardization of the tariff as

far as possible for similar pattern of healthcareproviders.

• Regular orientation to the doctors regarding healthinsurance.

• Concept of negotiable doctor’s fees should bediscouraged as far as possible.

TPAs• TPAs should increase their network to hospitals

in all areas, which will lead to increasedcompetition and more bargaining power for TPAs.

• TPAs should be directed for faster settlement ofclaims.

• Selecting some specific hospitals for groupinsurance policies where the hospitals will beassured of some volume of business and in aposition to offer better discounts.

• Indoor case paper and medical history can bemade a regular document for the submission ofthe claim.

• All the problems should be supported by positiveinvestigation report wherever applicable.

• Empanelling hospitals with fixed hospital scheduleand not encouraging hospitals with negotiabledoctor’s fees.

• Frequent visit to the hospital to meet the patient inthe hospital.

Policy Conditions• Policy exclusion should be very clear.• Capping in the room category as per the policy

coverage with an upper limit is important. Forinstance, patients get admitted in an Rs 15,000presidential suite in leading hospitals increase thehealthcare expenditure burden on insurancecompanies.

• Three years’ cataract exclusion with an upper limitas per the sum insured. It has been observed thatcataract claims is high in second year of the policyimmediately after the first year exclusion. It isrecommended that public insurance companyshould exclude cataract for at least three years.

Insurance Companies• Creating more awareness regarding health

insurance.• Strong underwriting and claims management.• Review of Mediclaim to cover ‘existing illness’, if

possible with a higher premium.• Introduction of new products for different

segments.• Offer products for specific treatments to profitable

segments.• Remove life/non-life categorization for writing

reimbursement-based health policies.



• Agents and private players should target newmarkets in rural and semi-urban areas, rather thantapping the same market. This will increase thepenetration of health insurance.

• Control costs by managing or controlling hospitals,i.e. shifting to the concept of Health ManagementOrganisation (HMO).

Government• Recognizing health insurance as a separate line of

business.• Reduce capital requirement for health insurers

from Rs 100 core to Rs 30-50 core.• Introduce capital monitoring and product level

norms for private health insurance.• Accreditation and benchmarking of health

providers. There should be some quality standardsand protocols to follow.

• Invest in training doctors, providers, healtheconomists, cost accountants, epidemiologists,hospital managers, record keepers incomputerization etc.

• Reform public health system by decentralizationautonomy and invest more to ensure standards.

• Government-controlled health trusts can facilitatepublic–private partnership in a competitiveenvironment.

X. CONCLUSIONWhile India has the highest potential for HealthInsurance, the penetration is lowest compare to westerncountries. The opportunities to acquire and the challengesahead are identified in this explorative Study. The waysand means to overcome those challenges also discussed.Mass marketing strategies like promotion of Group

Insurance, Micro insurance for BPL families will begreatly helpful for enhancing the growth of this industry.Insurance agents also have to be equipped enough toenroll more policies and to serve better for the customersas and when need arises.The Other stake holders likehealth care providers and TPAs also should worktogether to enhance the penetration of Health Insurancesector in India.

XI. REFERENCES1. Private health Insurance in India: Promise &

Reality-USAID-Feb-2008.

2. Healthcare in India: Emerging market report 2007:Pricewaterhouse coopers

3. IRDA Annual Report, 2006-07 (January-June-2008)

4. A Roadmap to Health Insurance for All: Principlesfor Reform

5. October 18, 2007 | Volume 73 Authors: Sara R.Collins, Ph.D., Cathy Schoen, M.S., KarenDavis, Ph.D., Anne K. Gauthier, M.S., andStephen C. Schoenbaum, M.D., M.P.H.

6. http://www.iciciprulife.com/public/Health-plans/Whyhealthinsurance.html

7. Assessing private health insurance in India-AJAYMAHAL-Economical and Political weeklyFebruray9, 2002.

8. Health Insurance in India: CurrentScenerio,Social health Insurance (p-79 to 101)

9. State Strategies to Expand Health InsuranceCoverage: Trends and Lessons for

10. Policymakers-February 7, 2007 | Volume 51

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