Popularising Health Insurance In Rural Areas

Around 70 per cent of India’s population, live in villages. Of these, less than 2 per cent are insured. Though the rural health insurance market is huge, it has so far remained untapped. Recently, IRDA has constituted a committee to chalk out a plan for spreading health insurance in rural areas. Various Micro-Health insurance schemes are to be studied. Around 25 such schemes are run in rural India, most of them attached to Micro-Finance Institutions. Falaknaaz Syed briefs you about the issues that the IRDA committee will address and some prominent rural health insurance schemes running in the country.

IRDA Appoints Committee to popularise health insurance

With an aim to popularise health insurance in rural areas and address the hurdles impinging its growth, The Insurance Regulatory Development Authority of India (IRDA) has recently constituted a 13-member committee to chalk out a roadmap to spread health insurance in rural India.

Says a member of the committee, “The aim of this committee will be to look at public-private partnership of micro health insurance, designing products specifically for rural areas, ways to collect premium at low cost and settle claims at low cost, micro-financing for health, strategies for encouraging large scale enrollment of rural population for health insurance and address the various hurdles in providing efficient service delivery.”

The committee consists of representatives from ICICI Lombard General Insurance Company Ltd, Royal Sundaram General Insurance Company Ltd, Oriental Insurance Company Ltd, Dr Devi Shetty of Narayana Hrudayalaya, an official from ministry of health, representative of TTK Healthcare Services Private Ltd, representative from Bearing Point, a member of Institute of Economic Growth, four members of the IRDA including the Chairman of IRDA.

The chairman of the committee will be KK Srinivasan, member non-life, IRDA. Each member of the committee has been assigned a task. The first meeting of this group took place on the 15th of December, 2005. The members have been given a six-month time frame to submit their recommendations and come up with a concrete plan for spreading health insurance in rural areas.

Says a member of the committee, "IRDA feels that insurance companies now need to focus on health as the business that comes from the health portfolio from rural areas is negligible. Various schemes such as Yeshaswini, and Healing Fields will be studied. These schemes are very different from each other. Their positive aspects will be taken while caution will be taken to ensure that their shortcomings are not repeated while replicating them on a larger scale.”

Says Mukti Bosco, Secretary General of Healing Fields Foundation, an NGO involved with running the Healing Fields Insurance scheme, “Micro-Finance Groups are already over burdened with credit and interest tasks and have plans to enter savings. If we expect them to take on selling and servicing micro health insurance too, then it will be difficult for them. Health insurance catering to rural areas has to be low priced, efficiently managed by health management experts and has to be a homogenous Group policy to make it viable."

Lack of awareness about various schemes has been one of the hindrances in spreading rural health insurance. “If the government wishes to cover the population for lessening debt burden and to reduce poverty, then the insurance policy should cover common illnesses for which people take loans. So, a major issue to be addressed by the panel is what aspects of health should be insured under the policy and how will it be run?” she adds.

Bottlenecks

Currently, around 25 Micro-health insurance schemes are being run across the country. Most of these are attached to micro-finance institutions. Each of these scheme has its own strenghts and shortcomings. For instance, Yeshaswini Insurance Scheme which had 16 lakh farmers enrolled in the 1st year, faced a large dropout in the second year as the scheme covers only surgeries and not routine medical problems.

Also the risk is not covered by an insurance company and is subsidised by the government. Experts feel that there should be an insurance company or a separate mechanism to fund the scheme. Others like Healing Fields though successful cover only a small section of the population.

Express Healthcare Management spoke to the people involved with the schemes to give you a complete picture.

Healing Fields Health Insurance Scheme ‘Our claims rate is 43 per cent while the incident rate is just 1.3 per cent’ "Healing Fields Health Insurance Scheme is run by Healing Fields foundation, an NGO along with grass root Micro-Finance Institutions (MFI’s) and HDFC General Insurance Chubb, covering 25,000 lives in seven districts of Andhra Pradesh since one year. It is run with 18 network hospitals and several self-help groups managed by 15 NGO partners. Mukti Bosco, General Secretary, Healing Fields Foundation speaks about the scheme." Please brief me about the Healing Fields health insurance scheme. Members pay Rs 285 (just 16 paise per day per person) to cover health insurance (Rs 20,000) for a family of five and Rs 35 for Personal Accident Benefit (Rs 25,000 each on member and spouse) to HDFC Chubb, the insurance company for the scheme. The policy is low-cost, which includes pregnancy and covers 43 listed common illnesses governed by ‘Diagnostic Related Group (DRG) Model’. In case of a hospitalisation, up to 25 percent is paid by the patient as co-payment. The stakeholders, insurer, NGO partner and the hospital together work out a customised process, map and goals, for the success of the scheme. What is Diagnostic Related Group (DRG) Model? DRG Model is an internationally accepted concept. After identifying the interested group, Healing Fields does a survey of the group to determine the demographic profile, hospital expenditure, hospital utilisation, disease profile, savings and credit profiles, etc.  Then a disease profile list is drawn up and the diagnosis is broken down into different aspects like rational diagnostic and treatment procedures, number of nursing man hours required, consultants time etc and costs computed. We also network with hospitals in that particular area after a comprehensive rating, the amount to be paid to hospital is pre-negotiated. All our activities are conducted in an extremely transparent manner; the costs are arrived at scientifically. How is the scheme run? Prices are pre-negotiated with the hospital for common illnesses. Since the rural client in most cases is illiterate and poor, we have a facilitator stationed at each hospital to help the patient in securing admission in the hospital, getting his medical history, documentation and claims management. During this process, we collect a lot of data on the insured both OPD as well as hospitalisation, history, treatment procedures etc. Our processes are in place starting from training the facilitator about the DRG Model to surveying, to claims settlement. Today, the need of the hour is a robust, quality service delivery mechanism that is easily approachable and understandable. A great product with a poor delivery mechanism is as good as not having a product at all. The claims rate for the scheme is 43 per cent while the incident rate is just 1.3 per cent. What are the shortcomings of the scheme? At present, we have not been able to scale it as envisaged because there are too many schemes around and most of the schemes claim they are health insurance at low cost but when we look deeper they turn out to be Personal Accident Benefit (PAB) or critical illness schemes. Apart from this, awareness among the people in terms of insurance is poor and therefore a lot of work is going into creating awareness. The other major problem is high cost of premium which the poor is not able to afford at one shot and therefore we need to look into a premium financing mechanism. What are your suggestions to boost health insurance in rural areas? Health insurance needs to be looked at differently from PAB or life insurance as this is in an extremely nascent stage. Also IRDA needs to separate health from other insurances for the simple reason that claims incidence are extremely high and need health management expertise to manage it. Also, we need to find a mechanism where OPD and day surgeries could be included as the rural poor find it expensive to stay in a hospital for more than a day as they loose wages for the day. Besides, a premium financing mechanism needs to be evolved so that it becomes easier for the people to pay the premiums. Awareness campaigns need to be developed as not knowing that a person has a health insurance cover because it has been deducted from the loan taken from the bank etc is as good as not having insurance. Adding preventive and promotive activity as part of the programme to be sponsored by either the government, NGO’s and insurance companies will go a long way in promoting insurance in the rural areas.

Yeshaswini Co-operative Health Insurance Scheme ‘Rural Health Insurance Schemes Should Cover Medical Admission And Maternity Benefit With Co-Payment’ "Launched two years back, Yeshaswini is the largest micro-health insurance scheme in the country. The scheme is run throughout Karnataka. Excerpts of an interview with Hanuman Prasad, Manager, Micro Health Programmes Narayana Hrudayalaya" Please brief me about Yeshaswini health insurance scheme? The Scheme covers the farmer co-operator, his spouse and children. The premium contributed per person was Rs 5 per month with Rs 2.5 subsidy from the government of Karnataka in the first year. The Yeshasvini beneficiary is entitled to the following benefits: free outpatient services at a network hospital including consultation fee and registration fee, investigation at special discounted rates, over 1600 listed surgeries done free of cost at network hospitals. The following charges are covered for any of the surgeries included in the policy: Admission, bed, nursing, anaesthesia, OT, surgeons, cost of consumables and medicines during the surgery and post operative period, surgery-related post and pre-operative investigations. The surgical cover is 100 per cent cashless. 16 lakh farmers had enrolled as members in the first year, 35000 members availed of free consultation at network hospitals, 9039 surgeries were done cashless amounting to Rs 10.53 crores; of these 657 were cardiac surgeries. In the second year, 22 lakh farmers became members of the Scheme of which 82652 members have availed of free outpatient consultation. More than 23000 surgeries have been conducted free of cost. How is the scheme run? A trust was constituted under Chairmanship of the Principal Secretary, Dept of Cooperation with Additional Registrar, Dr Devi Shetty, and other representatives from the government and healthcare sector. Package rates were negotiated and fixed for over 1600 surgeries. Using Yeshaswini Health cards, members can go to any of the 147 hospitals selected by the trust. What is not covered? Hospitalisation not leading to the surgery including common cold and fever are not covered. What are the shortcomings of the scheme? The Yeshaswini Scheme will not cover hospitalisation not leading to surgery. What are your suggestions to boost health insurance in rural areas? Rural health insurance schemes should cover medical admission and maternity benefit with co-payment, which will help to reduce the mismanagement of the scheme. As per the study at Sholapur four per cent of rural population require hospitalisation every year and cost of one episode is Rs 2520. Hospitalised people spend half of their income on healthcare and 40 per cent of the individual hospitalised in a year borrow money or sell their assets to cover the cost of healthcare.

Arogya Raksha Yojana ‘We need to design schemes that cover preventive healthcare for rural population’ Launched in December 2004, Arogya Raksha Yojana is a comprehensive health insurance scheme run in Anekal Taluk and Kanakapura Taluk of Karnataka by Biocon Foundation, Narayana Hrudayalaya in collaboration with ICICI Lombard General Insurance Company Private Limited. The scheme is now in its second year. Priti Jacob, CEO, Micro Health Programme, Narayana Hrudayalaya, briefs about the scheme. How is the scheme run? Residents of the above mentioned talukas from 0 to 70 years of age are eligible to be insured under the scheme. Members pay the premium to ICICI Lombard General Insurance company for the scheme and can avail treatment at 20 hospitals registered under the scheme. What is the premium? The premium for ‘Individual Scheme’ is Rs 180 per year, as part of the ‘family scheme,’ the premium is upto Rs 180 per member per year for two members, Rs 150 per member per year for three members, and Rs 120 per member per year for four or more members. How successful has Arogya Raksha been? We will close the first year in another month, probably with a surplus of 25 lakh. Enrollment for the second year will start shortly. Are there any plans of launching a similar scheme? We are also looking at taking the scheme to other areas and groups. We have a project in Amethi in Uttar Pradesh, where we are making 16 primary health centres (PHCs) to provide free basic medical treatment to the people. This will be followed by the launch of a micro-insurance scheme at 30-40 PHCs, which will take care of the cost of the scheme. What does the scheme offer? Arogya Raksha Yojana offers: Free out patient consultation, generic medicines at special rates from network hospital pharmacies and Biocare pharmacies, diagnostic tests at discounted rates at network hospitals and approved diagnostic centres, hospitalisation not leading to surgery, surgical treatment for over 1600 types of surgeries, 100 per cent cashless facility for surgical treatment and medical admissions up to the covered amount. What are your learnings from Arogya Raksha and your suggestions to boost health insurance in rural areas? Every scheme should cover outpatient treatment. Surveys show that average rural population spend 40 per cent of their income on outpatient treatment. As per the study, we have done in Sholapur average cost of one outpatient is around Rs 135 and number of outpatient utilisation /person is 4.2. To boost rural health insurance, we need to provide primary and preventive health. We need to design schemes that cover preventive healthcare for rural population. Additionally, fixing up the packages for each and every procedure will help the insurance companies to assess the risk. DRG model will help the insurance companies and hospitals to have hassless claim settlement.

NIDAAN Health Insurance Scheme An integrated scheme covering hospitalisation, house and assets, natural death, accidental death of member or spouse, and total permanent disability. The Scheme is run by SEWA, ICICI Lombard General Insurance Company, AVIVA. NIDAAN acts as corporate micro insurance agent while SEWA acts as a licensing agent between the insurance companies and NIDAAN. The health insurance scheme is being run since 1999 in five districts of Bihar. Total 10, 200 members have enrolled for the schemes. 20 hospitals have been identified in various districts. Incase of emergencies, members can avail treatment in a hospital not in the network. Excerpts from an interview with Arbind Singh, Executive director of NIDAAN. Please brief me about the health insurance scheme run. There are two schemes. Individuals enrolling for Scheme I pay an annual premium of Rs100 while couples pay a premium of Rs 170. In Scheme I, the illnesses should not be more than six months old. In scheme II, individuals pay a premium of Rs 225 while couples have to pay Rs 400. The schemes have been designed taking positive aspects of schemes run by LIC and SEWA. People below the age of 60 years are eligible. What are the difficulties faced in running the scheme? Our earlier schemes faced several hiccups. Claims were rejected by an insurance company as names were misspelt or the age was not written correctly. These problems arise as most members are illiterate. In other cases, insurance companies rejected claims accusing them to be pre-existing. Also another issue was that the earlier insurer wanted to re-imburse through cheque while most of the poor do not have a bank account. So we stopped working with the insurance company.

falak@expresshealthcaremgmt.com