In fiscal 24, the industry reached a claim of 26.9 million. Can this reduce health insurance premiums? ET Explained.
What are common corporate processes?
In January, the Indian Insurance Regulatory Authority (IRDAI) introduced a common currency system that required all general insurance companies to board on board hospitals with standardized terms and rates, similar to those under PMJay. The goal is to expand cashless processing through a wider network.
Currently, under the government’s Ayushman Bharat Yojana, about 30,000 hospitals have been awarded. However, these are mainly government hospitals, including the private sector, with more than 70,000 hospitals in India.
A key feature of co-authorization is that hospitals will no longer need separate agreements with each insurer. A separate agreement with multiple insurance companies, reaching an agreement with the common network will be sufficient.
Can it help policy holders?
A wider network will mean customers can get cashless access in more hospitals. With a unified network, converting insurance companies will not affect access to cashless facilities. Likewise, top-up policies from different insurance companies can be used more seamlessly.
If the hospital signs with the insurer, the policy holder can receive treatment without advance payment – the insurer will directly resolve the bill to ensure cashless treatment.
Who is implementing it? How to implement it?
GIC led the promotion with insurance companies. So far, the Council has contacted more than 600 ophthalmic hospitals and 150 hospitals. The initial focus is to professions based on program (such as Cataract and Lasik) before expanding to general hospitals. The goal is to cover 4,000-5,000 hospitals over the next 2-3 months.
Why are ophthalmology hospitals located first?
Eye care involves fewer complex procedures, while pricing and procedures are relatively small. Cataract surgery (widely used by older people) is one of the most common procedures and will facilitate an increasing number of cashless access by expanding the panels of ophthalmic hospitals.
What attention does the hospital pay?
Although some hospitals support the program, larger multi-specialty chains are wary of standardized pricing, fearing that due to their high cost structure, it may harm its profitability. They are worried about delays in reimbursement.
In addition, some sideline hospitals raised concerns about insurance company claims rejection and unexplained deductions. In Ahmedabad, for example, the hospital accused insurance companies such as Star Health, Care and Tata AIG of rejecting the denial and delayed price revisions. Some are not even notified in advance. The Ahmedabad Hospital Association threatens to stop cashless services with these three.
Will this reduce the premium cost for policyholders?
That’s the goal. Standardization of packaging and billing practices can reduce treatment costs. Insurers can better control claims spending if hospitals agree to fixed interest rates. Lower claims mean lower costs for insurers, which could ultimately lead to affordable premiums for policyholders.
Therefore, your health insurance premium may not drop immediately, but if the experiment is available.
