While the ‘use and file’ regulation will speed up product launch, won’t it undermine the quality of the product?

The point was hotly debated between the regulator and the industry before the changes were made. There are always pros and cons to any decision you take. The advantage here is that it gives the insurers an opportunity to act faster, but the onus is on them as well. The regulator has made it clear that the insurers should follow the guidelines and meet policyholder protection criteria. The regulator will later review the products and if these do not meet the criteria or have gaps, it may ask insurers to stop selling. It will also affect their future ability to launch ‘use and file’ products. Not that we weren’t careful before, but now that we know that there will be no review by the regulator prior to launching products, we’ll be extra careful. The accountability and responsibility lies with the industry as a whole to ensure that we do the right thing with this wonderful opportunity.

What are the main causes of high out-of-pocket expenditure (OOPE) and ways to reduce it?

There are two reasons for out-of-pocket expenses. One, people do not have insurance and second, even though they do have insurance, it does not cover all health care expenses. Therefore, efforts need to be made to bring more and more consumers into the Health Insurance fold, be it through retail, corporate or government. Further, the insurance covers only hospitalization, while more than 50% of the total health expenditure is related to OPD, which is spent in doctor’s consultation, medicines and diagnosis.

So we have to bring the OPD to the insurance. There is effort on the part of regulators and insurance companies to find ways to do this, and various global models to follow. The best way to promote an affordable, relevant and meaningful OPD product is through a health savings account, where you keep a pool of money for discretionary OPD expenses. As an insurance company, we can offer volume contracts, cashless experience, the benefits of large network, capture health data and analyze risk data. So there is an opportunity here and we have to do that because OPD is not a pure risk product. Discussions are ongoing and this requires regulatory change, but I expect the product to be out.

why is healthcare inflation So high in India and how can it be stopped?

This is a sensitive issue as I am not sure the healthcare fraternity would like to admit that the prices are not fair. As players, we feel there is a section where the pricing is not fair, and during COVID, it misused the situation and pushed up the prices. The government has tried to regulate it and in turn, we have taken steps to put a cap on pricing.

In healthcare, there is a social impact and you have to be prudent and fair. This is an ongoing conversation, but because there is no unified health regulator, it is difficult to regulate. Also, as the penetration of insurance is low, the overall negotiating power of the insurance industry is low. Ultimately, this will benefit the consumer because if you reduce the cost of healthcare delivery, it will reduce the premium. Even now, the average claim size is high and some of us have had to hike the prices. Constant dialogue and intervention by the government is the only way to do this, but it is not an easy issue to address.

Senior citizens are always forced to make OOPE. Is there any way to solve their problem?

For senior citizens, there are two issues to be addressed. One, how can we build a product for senior citizens who have the ability to pay but want comprehensive insurance? This means not only hospitalization, but also chronic health conditions like diabetes. How do you design products for such existing conditions and not just hospitalizations? We have tried this in one of our products, which is not only for senior citizens who can pay, but there are some affordable versions of it as well. Second, there are sections of senior citizens who want low-cost products.

This can happen in 2-3 ways. First, insure young and healthy people early so that the pool increases and the price automatically drops. Second, we can reduce the GST for those above 65 years of age. If we reduce the GST from 18% to 5%, the premium cost for senior citizens will automatically come down to 13%. Third, perhaps the government may make it mandatory for healthcare providers and hospitals to reduce the prices of services for senior citizens. It is needed in our country because insured or not insured, this segment with more health conditions needs affordability.

What is the intention behind your recently launched Active Fit?

India has the world’s youngest population, with 65% under the age of 35, but the bulk of the population buying health insurance is above the age of 35. Insurance is a volume business, where one clause subsidizes another. So, if we want to make insurance for senior citizens inclusive and affordable, we have to bring in the young and healthy segment in insurance. Through our research, we have found out what will make insurance attractive to the young population and it is in this context that we have launched Active Fit. This will not only provide coverage to youth under 35, but potentially coverage for our seniors as well.

With Active Fit, if you are in good health, you get an instant, upfront premium discount of up to 10% after a health risk assessment and facial scan. From the 4th year onwards, you get a 5% discount on the premium and 10% from the 7th year, which will last for a lifetime. You can also get up to 50% premium discount in the form of HealthReturns if you stay healthy.