With this amendment, the bottleneck for investment in the infrastructure sector through the FVCIs route has been removed
(Neha Somani works with Vinod Kothari and Company)
Health insurance claims ratio which peaked at 105% in 2007-08 was at 99% in 2010-11. It has dropped to 68% in 2012-13. Does it mean more insured's claims were rejected?
In a 16 December 2014 hearing of a PIL filed in Bombay High Court (HC) by social activist Gaurang Damani, he argued that data compiled by Insurance Information Bureau (IIB) shows that claims ratio had dropped from nearly 100% to 68% after cashless mediclaim was stopped in 2010 and the Preferred Provider Network (PPN) introduced.
Mr Damani said it led to reduction of claims payout by nearly Rs3,000 crore per annum. Claim ratio is total claim paid against the total premiums earned.
According to Arvind Laddha, CEO, Vantage Insurance Brokers and Risk Advisors, “There could be three reasons – First that we have seen some evidence of reduction in claims cost in some cities where the implementation of the GIPSA PPN rates has taken place.
However, this is in limited cities and my own sense is that the impact has been more in slowing the pace of increase in claims cost, rather than significant reduction in claims cost itself. Secondly, Increase in premium rates – this is another factor that can influence claim ratios. If the premium rate for a group goes up more than the claims amount, the claim ratio does improve. Thirdly, Improvement of mortality / morbidity trends – if the number of claims from a group reduces due to improvement in group health or by matter of chance, other factors being steady will result in improvement of claims ratio.”
An interesting set of figures can help us understand the reasoning behind discontinuation of cashless in July 2010 by government insurers. In 2008-09, the percent of excess for cashless over reimbursement was 35%. This number had a whopping jump to 83% in 2009-10. It means the average claim size for cashless was 83% higher than the average claim size of reimbursement. Is it that the insurers were paying too much to hospitals for cashless? It could be one of the reasons that government insurers stopped the cashless facility in July 2010.
There is no doubt that the insured suffered due to discontinuation of cashless by government insurers. Cashless was restarted only at preferred provider network (PPN) hospitals that agreed to negotiated rates on 42 or more specified procedures. The key point is that insurers like ICICI Lombard's PPN have tertiary care in major Mumbai hospitals like Lilavati hospital, P D Hinduja National hospital, Breach Candy hospital, Kokilaben Dhirubhai Ambani Hospital, Asian Heart Institute and so on. These hospitals are missing from the government insurer PPNs, which only has a lot of eye hospitals and smaller nursing homes.
But, does the whopping reduction in claims ratio mean higher claims rejection or partial settlement? Does it mean the consumers suffered? We will discuss in the fourth part of this series discussing the context of Gaurang Damani's PIL and the data and questions it throws up.
First part of the article - http://www.moneylife.in/article/cashless-mediclaim---how-many-hospitals-really-offer-it/39950.html
Second part of the article - http://www.moneylife.in/article/irda-needs-to-repeal-the-loophole-it-left-in-health-insurance-guidelines/39972.html
The Planning Commission is dead. Long Live the Planning Commission
On the first day of 2015, prime minister (PM) Narendra Modi took to twitter to say that the Planning Commission of India was being transformed to NITI (National Institution for Transforming India) Aayog. A volley of tweets from the PM, followed by a detailed press release, make it clear that while the Planning Commission is dead, it will live long. In its new avatar as NITI Aayog (NA), it will probably be bigger and significantly more powerful. It will be a parallel force in policy-making headed by the PM himself and will include a governing council comprising all state chief ministers and lieutenant governors of Union territories.
Mr Modi tweeted that having been the chief minister of a state himself, he understands the need for such interaction to ‘foster a spirit of cooperative federalism’. But, effectively, with such a composition, NA will be a body that will be just as powerful and, probably, more significant than the Union Cabinet. Why more significant? Because, NA will give Mr Modi direct and unfettered opportunity to deal with state chief ministers, especially those from other parties on financial matters. It is also a way to ensure support, which will be crucial in the Rajya Sabha, where the government has been facing some embarrassment.
The Cabinet resolution ushering in NA, quoting Mahatma Gandhi, BR Ambedkar, Swami Vivekananda, Deen Dayal Upadhyaya, the sage-poet Tiruvalluvar, among many others, says that NA will bid farewell to a ‘one size fits all’ approach towards development and celebrate India’s diversity and plurality by embracing specific demands of states, regions and locations. The description of NA’s role is vague and all-encompassing, at the same time. The press release calls it a ‘think tank’ of the government and a ‘directional and policy dynamo’ that will play a pivotal role in India’s ‘development journey’. It will be all things to all people at the Centre and the states. It will provide ‘provide key inputs on various policy matters’, will be pro-urbanisation and work at using technology to create ‘wholesome, secure and economically vibrant habitats’, provide ‘relevant strategic and technical advice across the spectrum on matters of national and international import’ and so on and so forth.
On 15 August 2014, many of us listening to the PM’s independence day address at the historic Red Fort, thought that the Planning Commission would be shut down. At the least, we expected that this high-profile sinecure for people close to the ruling government, with no accountability (remember Rs35 lakh spent on two toilets?) will be drastically downsized. But the rambling Cabinet resolution on NA suggests otherwise.
Apart from the powerful governing council, NA will have regional councils to be formed on a need basis to address ‘specific issues and contingencies’ with a specified tenure. The regional councils too will comprise the PM and chief ministers. Domain experts and specialists with relevant knowledge will be special invitees nominated by the PM.
The full-time organisational structure will comprise a vice-chairperson appointed by the PM, full-time members, two part-time members from leading universities/institutions, and up to four Union ministers nominated by the PM as ex-officio members. There will also be chief executive officer (CEO) appointed by the PM for a fixed tenure who will have the rank of a Union secretary with a secretariat.
Is there any doubt at all that NA is envisaged as the second most powerful body in the country after Narendra Modi’s PMO (prime minister’s office) and probably on par with the Union Cabinet? Appointments to NA will be keenly watched in the coming days.
Sources say that many BJP supporters, including academics and ideologues from the south, will find a berth at NA.
NOTE: This article was written before the PMO announced names of the NITI Aayog members.