Cashless health insurance now restricted
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ON JULY 1, India’s four public sector insurance companies withdrew cashless hospitalisation, the star attraction among health insurance policies, from around 100 high-end hospitals in Mumbai, Chennai, Bengaluru and Delhi. Consumers will now have to pay cash if they seek treatment in these hospitals; a stipulated amount fixed for the particular treatment will then be reimbursed at a later date.
Insurance company representatives said from now on cashless treatment will be available only in designated institutions, called the Preferred Provider Network (PPN) hospitals. The deputy general manager (DGM) of the public sector New India Assurance, Segar Sampathkumar, pointed out. “The cashless facility is not withdrawn; it is restricted to PPN.” The public sector undertakings (PSUs) have formulated a package deal for mediclaim consumers where around 40 kinds of treatment will be covered under cashless insurance in the PPN hospitals, he explained.
The PSUs have also developed new rate cards with different treatment costs depending upon the category of the hospital. “The deal was if the hospitals agree to the new rate card, they can stay in our PPN, else the cashless facility will be withdrawn,” Sampathkumar said. For instance, a cataract operation would cost between Rs 20,000 and Rs 30,000 depending upon the hospital grade.
Leading private hospitals feel that the insurance amount is 30-40 per cent less than expensed involved. “Treatment cost in India is already economic, the new PSU rates would make hospitals compromise on treatment quality,” said Vijay Agarwal, executive director of Delhi’s Pushpanjali Crosslay hospital.
Explaining why public sector insurance providers were driven to withdrawing universal cashless treatment, Sampathkumar said: “The losses under this head were massive, beyond 100 per cent. We were losing approximately Rs 2,000 crore annually.” Another PSU, National Insurance Company said it had only two options. “Increase the premium, which could be counter-productive, or go for effective price control,” the company’s DGM, Subir Bhattacharyya, said.
Industry bodies like the Federation of Indian Chambers of Commerce (FICCI) criticised the withdrawal of the facility and said it will have an adverse impact on the health insurance market in India. Anjan Bose of FICCI Health Services Committee said, “It is a retrograde measure.” It is understandable that PSUs were making losses, but it is only through consultation and consensus that appropriate results can be achieved. Knee-jerk reactions will only hurt the industry further, he added.
The four PSUs—New India Assurance, National Insurance, Oriental Insurance and United Insurance—control 70 per cent of the health insurance market in India. Healthcare experts believe withdrawing cashless hospitalisation will hit patients badly. “It may give private players an upper hand as they will try to capture the market vacated by PSUs,” said Anita Kotwani, associate professor at the Patel Chest Institute in New Delhi. “The private insurance provider could increase the premium,” she added.
Misuse of the insurance cover for hospitalisation and irregularities led the companies to withdraw cashless treatment from a segment of hospitals, PSU representatives said. “We noticed that hospitals were inflating their bills and had different charges for insured and uninsured patients,” Sampathkumar said. Hospitals deny the allegations. “The pricing depends upon the hospital’s facilities. It has nothing to do with the patient’s insurance,” Agarwal said.
What now?
Matters are in limbo now as the Insurance Regulatory and Development Authority has distanced itself, saying PSUs and hospitals should sort things out. “Over the next three months, they will work out a transparent mechanism,” said Nayan Shah of Paramount Healthcare Services, that processes insurance claims. They are likely to have new insurance products for different networks. If a person wants to get surgery done at a super speciality hospital, he or she will have to pay a higher premium or part of the bill, he said.
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