CAG had pulled up government insurance companies for incurring huge losses on group mediclaim. Even today, the premium can be low and there can be huge variation in two quotes received from the same insurer. Are insurers throwing risk to the wind?
Insurance companies do not have the flexibility of pricing health insurance premium for retail buyers, since their features and prices are approved by the Insurance Regulatory and Development Authority (IRDA). But they can price their group insurance premium according to market forces and negotiating skills of the companies aided by their brokers. However, are brokers doing their jobs as an independent advisors who are supposed to work in the best interests of their corporate clients, or are clients being taken for a ride by government insurance companies and insurance brokers? We have just come across an astonishing case where the group insurance premium quotes differs hugely from the previous year to this year and then between the quotes of two different offices of New India Assurance.
New India Assurance gave a quote of Rs6.47 lakhs for covering 324 employees without the involvement of a broker and gave another quote of Rs3.48 lakhs for covering 342 employees of the same corporate, which was through a broker! How can a broker’s quote for a higher number of employees and which includes their commission, be at half the price of the quote that was sought directly from the insurance company for lesser number of employees of the same corporate?
Existing group mediclaim premium for 354 employees | Quote from New India Assurance for 324 employees (no broker) | Quote from New India Assurance for 342 employees (with broker) | Quote range from different insurers for 324 employees |
Rs7,95,509 | Rs6,47,841 | Rs3,48,837 | Rs3,48,837 to Rs11,88,207 |
In any case, this quote was a sharply lower than the previous year, leading to a suspicion that the previous year’s quote was highly inflated. Some reduction in the quoted premium was justified as this corporate had claims ratio of only 30%-33% in the current and previous policy year. But if the broker’s quote is ridiculously low, why can’t something similar be offered directly to a corporate and that too after removing broker commission? When we enquired with New India Segar Sampathkumar, GM, New India argued that the difference in quote could be because they came from two different divisional offices! Well, do they have separate actuaries for different offices whose risk assessment would be so radically different?
Now, here comes the interesting part. After Moneylife highlighted the drastic difference in the premium, New India drastically changed the quote. The broker quote went up from Rs3.48 lakh to Rs4.90 lakh and the direct quote went down from Rs6.47 lakh to Rs4.67 lakh. What it means is that these quotes have no sanctity. The insurer and the broker work in league to milk the corporate client with hugely inflated premium, unless the corporate client wakes up and starts enquiring.
The questions that arise in this case and that need IRDA enquiry are as follows –
9. Are Government insurers still underwriting group health insurance at losses?
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The corporate clients are pampered with custom made policies that include pregnancy, dentures, spectacles at low premia that are out of bounds to others. The insurers settle their claims, even fake and inflated ones extremely fast lest they forfeit this lucrative business!
IT IS SUGGESTED THAT THERE SHOULD NOT BE 100% REIMBURSEMENT . SOME % MUST BE BORN BY PATIENT , SO THAT HE KEEP WATCH ON BILLING .
FURTHER THERE SHOULD BE NO CLAIM BONUS SYSTEM LIKE VEHICLE INSURANCE .
In case of Private Insurance Companies there is one authority sitting in their Operating Office who is definitely prudent in Underwriting the business.
I recently had a car accident and am in the process of claiming insurance money due to me. All papers pertaining to the vehicle are up to date as are relevant documents required for putting up the claim viz. FIR with local police, photographs etc. I feel that i am being shortcharged by the insurance company. Kindly advice me as to how i can get in touch with you/your support team
Regards
Krishna.
And i think insurance companies are also aware of it.And they discourage any other hospital which is not linked.
Plus any grade of hospital without offering any quality products and services try to sell patients forcing regular visits etc.
Further Hospitals have devised way to siphon-off extra money from the patients above the amount they receive from insurers.They add some unnecessary charges in the name of non-medical item.
ICU has become a money-making machine for any hospitals and they prefer to prolong patient stay in ICU.
BUT all these will again point to IRDA and final poor and incompetent governance, and PMO.And thats the dead end with no solution and we will have to live with it :(
uttam
2. In fact such in-consistencies for Group Policy premium has been going on since time immemorial and same way , individual policy holders get bleeded ,especially the Seniors, under the cloak of "Heavy incurring losses".
3. It will be a youman service if the Authority can fix some standards , guidelines and Claim versus premium rates ,by suitable increase in Corporate Group Insurance policies and pro-rata reduction in the high premium rates charged for individual medi-claim policies especially in the category of Seniors.
3. In fact , there is a strong case in percentage reduction of premium rate, in case of those individual policies where there has been "NO Claim", especailly after the maximum percentage of NCB is already over. Simultaneously the Insurer must stop charging 2 percent ( or is it 2.5?) extra load for each advancing year premium .
Everyone knows it. Everyone ignores the truth