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Health insurance industry needs a Make-Over!!!

Health insurance industry needs such a pro-active policy change, which will bring health cover to consumers when they need it the most. The percentage of out-of-pocket spending by Indians, rich and poor, is among the highest in the world. A very small percentage of the population is covered by health insurance and this needs to rapidly scale up.

The Budget has many positive implications for the General Insurance Sector. Banks being allowed at act as Insurance Brokers will increase insurance penetration as the large number of Bank Branches could be leveraged to distribute Insurance Products in a more effective manner, said the CMD of The New India Assurance CO.

Commenting on the Union Budget 2013 G Srinivasan said, “Allowing the general insurance companies to open offices in tier-II and below towns without the regulatory approval will speed up opening offices in smaller towns.”

The Public Sector General Insurance Companies will ensure that there is an office in all towns upto tier-IV by 31st March 2014. This will facilitate better insurance penetration.

Using KYC norms for Bank for insurance purpose will be a great facility for the customers as it will avoid duplication of efforts. Expanding RSBY Scheme to be expanded to include Rickshaw pullers, taxi-drivers etc, will go a long way in providing health insurance to people of this Country.

Public Sector Insurance Companies will use Adalats in a large manner to dispose of pending Motor TP Claims to bring in faster relief to the accident victims.

The Budget will allow Banking correspondents to sell micro insurance products. This will lead to insurance being available in smaller towns and villages through a large number of Bank correspondents, he said.

The rapidly growing health insurance industry is pinning hopes on the Union budget for a boost. The last budget gave some impetus to preventive healthcare by including it in Section 80D. With the incidence of lifestyle diseases, such as diabetes and cardio-vascular ailments, rising rapidly, preventive checks can provide timely intervention and save precious lives.

India’s march in the field of healthcare has been relentless and in the past decade we have established ourselves as a world leader on quality healthcare. However, there is an urgent need to raise healthcare expenditure as a sizeable portion of the gross domestic product to aid development of the health insurance sector. The government should play the role of a payer and use public-private partnerships (PPP) with hospitals and insurance companies to deliver quality healthcare to millions of Indians.

 Insurance is a capital intensive business. The industry needs capital inflow on regular basis for its operational needs. Many insurance companies would like to invite foreign partners to raise their stake. Also, raising the cap to 49% will be an incentive to foreign companies to invest in Indian insurance sector. This will create required capital in the industry and help the sector expand much faster.

The budget needs to allocate resources for public private partnership to increase health insurance penetration. Health insurance should be incentivised for people beyond tax savings; this could be in the form of contribution by the government to premium. This will be a step towards making healthcare universally available.

Health insurance premium should be 100% exempted from tax. While this is required by all ages, there is special need for senior citizens. They are the ones who have a greater need for healthcare and pay higher premiums as they have higher probability of using health cover.

With more policy changes, I expect that there will be several growth opportunities which will emerge. Starting from working towards recognising health insurance as a standalone sector to collaborating with industry bodies to evolve governance rules, Irda has been a catalyst for the growth of the sector in India; we as an industry are rapidly pacing ahead.

An important development will be the rollout of bancassurance regulations for standalone health insurers. Under the proposed guidelines, banks have the option to operate as a corporate agency for a standalone health insurer. This will be a significant step in the right direction. It will give more options to the customers and help to increase the reach of insurance products through the wide network of banks. This will provide customers a bouquet of products from which he/she may chose the appropriate product based on his/her needs.

We would like to see the expansion of the RSBY platform to deliver better healthcare outcomes in rural India–both above and below the poverty line. This scheme is an excellent example of PPP and should be leveraged further to make healthcare accessible to all.

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