Insurance companies need not confine themselves to only covering healthy people, they must come forward and cover people living with diseases, says Dr S Prakash, Managing Director, Star Health and Allied Insurance Company.
In an interview with MintGenie, Dr Prakash said the pandemic created an accelerated awareness of health insurance, but unfortunately, it was not long lasting. There should be an aggressive campaign on health awareness and the need for insurance, he said.
Edited Excerpts:
Q. The theme for World Health Day is “Health for All”. However, is this possible without a health insurance plan in today's times?
‘Health for all’ has been debated for decades. Now it has to be ‘health insurance for all’. The advancements in healthcare have made us feel that healthcare treatments cannot be made affordable without financial support. Hence, the slogan ‘health for all’ should, for all practical purposes, literally metamorphose into ‘Insurance for All’.
Q. The COVID-19 pandemic caused an uptick in the scale of health insurance policies. Health insurance premiums soon rose. Did this affect people's interest in buying health insurance or opting for extended coverage?
The pandemic has created an accelerated awareness of health insurance, but unfortunately, it was not long lasting. An accelerated increase in sales of health insurance was observed during and immediately after the peak of the Delta wave and Omicron, but the million-dollar question is if this growth is continuing. There should be an aggressive campaign on health awareness and the need for insurance.
There is a myth that health insurance is for the rich and affluent, but it has to be for the people who are in real need. To that extent, there should be more and more awareness of health insurance and we should not only think about health insurance during a pandemic or post pandemic, but we have to constantly look at having health insurance coverage. Food, clothes and shelter need to be redefined as food, clothes, shelter and health insurance. It has to form one of the basic fundamental requirements for every household.
Q. The IRDAI has removed the commission limits for agents. Do you think this move would adversely affect people inclined to buy health insurance in the future?
This is not something that can impact the consumer or the policyholder. This is a strategy that’s drawn by the regulator to increase the penetration of health insurance in India and to also create some standardization and discipline in the distribution and procurement area. This is a welcome initiative for the industry and for the country. I don't think the policyholder should be worried about it.
This is an initiative where the regulator is trying to streamline and organize, so that, in the long run, the policyholder gets the best of the benefits for the premium he or she pays. The interest of the regulator is always on the policyholder and of late, the regulator is very keen on accelerating insurance penetration in India.
These are all only regulatory reforms and not changes, which are expected to bring good results and more and more people getting insurance coverage is good for the common man in this country so that insurance companies can come forward and cover people with risk.
Q. What is the most common mistake people make while buying health insurance plans?
The most common mistake is people do not understand what they really want. If a middle-class family with a father, mother and one or two children wants to go for a family floater policy, they have to consider a sum insured of ₹5 lakhs, meaning that if there is a problem, the insurance can cover up to ₹5 lakh.
They must choose a policy where they consider the waiting period, the standard exclusion classes for diseases, the pre-existing disease cover, and any restriction for the hospital room - if they are from a metro they have to seriously look into this because in metros, major corporate hospitals hive higher room rent. If they buy a policy with a capping on room rent, they will have to pay the difference which will reflect in their hospital bill.
It is not what they hear from the intermediary agent or advisor, it is not what they read from the proposal form, it’s what they inquire about in the market, what they discuss with their friends who have policies with some insurance companies and they then reach a consensus on which company and what type of policy. To my knowledge, family floater policies are very ideal and good. A policy up to a minimum of ₹5 lakh sum insured should be most appropriate for a young middle-class family.
For those who are already suffering from a disease, they have to look at policies which are disease-specific. If they have chronic diabetes, hypertension or heart disease, or some joint problem and their doctor says that in the next five to 10 years, they are more prone to hospitalization or some expenses or surgery, they should definitely look at buying a policy and protecting themselves.
Q. There has been a rise in online aggregators selling health insurance. Do you think their presence has helped penetrate Tier two and Tier three cities left untouched to date?
Insurance distribution has different wings. Web aggregators are trying to be more prominent in the major metros, but in Tier-2 and Tier-3 cities, from my experience, I could see that the complexities of the insurance products are not easily understandable by the common man.
Naturally, they need an intermediary to explain the future and the intricacies of the product. So in the Tier-2 & Tier-3 cities, where the awareness of insurance is remote, there is a need for an adviser or an agent, to talk to them, to explain to them the benefits of insurance. The most common question is, “What if the individual is not getting hospitalized?” We have to clear that myth and tell them that this is an investment and not an expense which can help someone when they are in need.
Q. What is your take on the evolution and inclusion of innovative products in today's health insurance sector?
Evolution is constantly happening. What used to be only reimbursement has become cashless, and what used to be compulsory hospitalization – insurers used to say compulsory hospitalization is required for payment – previously has changed to even daycare procedures being covered. Most of the elective surgeries in India today or globally, in the healthcare space, are “Day Care Procedures”.
Insurance need not mandate total inpatient hospitalization and a 24-hour stay in the hospital for any payment of claims. Things are moving from efficiency to effectiveness, from reimbursement to cashless, from overnights to day-care, from inpatient cover to outpatient cover, from covering for illness to promoting wellness, from paying the claim through cheque to NFT transferred, from covering a person who is healthy to covering a risk or a person with the certainty of disease, from the manual process in booking a policy to digital and from agency to multi-channel distribution. A lot of evolution is happening in such a way that what used to be a push market is now evolved into a limited pull market.
With this evolution happening, there are also changes in the products. Insurance companies are coming forward to cover people with diseases and particularly diseases like diabetes, hypertension, heart disease, cancer, children with autism spectrum disorders, people diagnosed with HIV and people living with some form of disability, which are at the lower end of the spectrum; all these things are being covered in different policies.
