The Telegraph
Thursday , June 26 , 2014
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Concern over health costs

A.V. Girija Kumar in Calcutta on Wednesday. Picture by Kishor Roy Chowdhury

Calcutta, June 25: General insurer National Insurance today said the health insurance sector was in need of a regulator to monitor the pricing by private hospitals.

“There is a need for a national health regulator which will look into the different processes involved in the financing and delivery if there is to be an integrated health delivery system,” National Insurance chairman and managing director A.V. Girija Kumar said at an event of the MCC Chamber of Commerce and Industry today.

According to industry sources, there are no clear pricing guidelines at the national level for private hospitals. Even the third-party administrators, who are the link between the insurance companies and the hospitals, suggest that hospitals often charge exorbitant treatment costs.

Insurance companies take into account medical inflation and include it whenever there is a premium revision to protect their profitability.

Kumar further said while the insurance sector was guided by the regulations of the IRDA, there was no similar monitoring over hospitals.

“The hospitals are often increasing their rates 2-3 times a year. In comparison, insurance companies usually revise their premium in a 3-5 year period,” said an official of a city-based third-party administrator.

A senior official of a private insurer said health insurance continued to be a loss making proposition on account of the high claims ratio, which is the amount of claims incurred against premium earned expressed as a percentage. For many insurers, it is more than 100 per cent.

Two-wheeler plan

Insurance companies are working with the Centre and the IRDA to introduce two-wheeler insurance policies where the owner would have to pay the premium for three-five years at one go. Kumar said the move, if implemented, would tackle the issue of the large number of instances of non-renewal.

“We are working on introducing a policy for 3-5 years for covering two-wheelers to protect insurers to some extent from the non-renewal of policies,” Kumar said.