Our money: Overcoming the challenges in health insurance

The development of new standards also means that current underwriting and risk assessment methods must change. Products need to be restructured to provide greater coverage and minimal deductions.

From Krishnan Ramachandran

In light of the global dispute with the coronavirus pandemic, the focus is once again on health and health insurance. To date, however, very few Indians have health insurance. India has one of the highest health spending ratios 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. That could change, however – a recent Max Bupa Covid-19 survey found that pre-pandemic only 10% of those surveyed wanted to get health insurance, but 71% after the pandemic – people who are now considering health insurance as one Need. Aside from intent, however, there are other aspects that the industry needs to consider in order to revive its growth. Here are a few of them.

Expansion of coverage
Digital health will stay here as we are likely to see a surge in telemedicine and online video counseling services, as well as remote management of chronic care. These services are expected to be part of health insurance offerings in the future. In addition, business done virtually will be the new normal, be it through digital channels or some of the more traditional channels that are digitally activated. Going forward, we should see disproportionate growth in both assisted and unsupported purchases on proprietary websites and through aggregators.
Digital technologies such as automation, AI and data analysis are becoming effective tools for creating better offers and improving processes. Technology is also impacting other aspects of the industry including diagnostics, hospital care, service delivery mechanisms, analytics, risk assessment, etc. The more companies enter the field and drive more innovation and competition, the lower the health prices and momentum towards it Achieving the goal of universal health insurance for everyone.

Create industry standards
India’s Insurance Regulatory Authority (Irdai) new norms mandate that health insurance now come with wellness and preventative measures, and policyholders can receive rewards for following a healthy wellness regimen, which boosts the sector. This should drive growth in health insurance products while benefiting customers. Insurers can now reward customers in a variety of ways – from discounted outpatient consultations or treatments, medications, health checks and diagnoses, to redeemable coupons for dietary supplements, to membership in fitness centers, sports clubs, etc.

New illnesses that emerged after purchasing the policy (other than those prescribed by Irdai) cannot be excluded. The treatment of mental illnesses, stress or mental and neurodegenerative disorders has been made the responsibility of the health insurance company.

The next step
The development of new standards also means that current underwriting and risk assessment methods must change. Products need to be restructured to provide greater coverage and minimal deductions. According to industry estimates, consumers pay 25 to 30% of the total cost of treatment out of their own pocket, despite insurance. Vendors must therefore work better on balancing interest in the value for money margin so that the sector can address the challenges that exist and expand its reach.

The author is the MD and CEO of Max Bupa Health Insurance

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