Why wellness is new mantra in health insurance

Abhijeet Ghosh

Most of us believe that the health insurance cover in India is restricted to just reimbursement of hospitalisation expenses.

While it is true that a majority of health insurance policies available in the domestic market today cover only hospitalisation expenses, increasingly insurers have expanded the health insurance policy to cover a much wider range of benefits.

New benefits

These benefits include pre-hospitalisation expenses such as out-patient department (OPD) where even day care procedures are covered. Increasingly, insurers have also started including a worldwide emergency cover, disease-specific covers such as diabetes, hypertension, dengue, cancer among others, value-added services in the form of discounts, health maintenance benefits, physiotherapy, alternative treatments such as ayurveda yoga, unani, siddha and homoeopathy (Ayush), dental treatment and consultation charges for second opinion.

Feature-rich policies

It is estimated that almost 60% of expenses incurred in the overall medical spends in the country is towards outpatient department expenses such as doctor visits, medicines and other diagnostic tests. For insurers, the idea behind launching feature-rich policies is to bridge the gap between the total cost of healthcare incurred and the amount covered by health insurance. Additionally, by covering these ailments at the inception stages, it will also help to cure it earlier so that it does not escalate into a major illness which may result in a longer hospitalisation and treatment.

Importance of preventive elements

Incidentally, the insurance regulator, too, in its recent health insurance regulations 2016 has emphasised the importance of wellness and preventive elements as a part of the product design in health insurance policies.

The Insurance Regulatory and Development Authority of India (IRDAI) has asked insurers to endeavour promoting wellness among policyholders of health insurance by offering the following health-specific services offered by network providers:

• OPD consultations/treatments or
• Pharmaceuticals or
• Health check-ups, including discounts on all the above at specific network providers

Discount on premiums

More importantly, the regulations also stipulate that insurers can look at putting in place procedures for offering discount on premiums on renewals based on the fitness and wellness criteria. This aspect may be a game changer in the health insurance industry which has typically relied on just providing incentives in the form of no claim bonus to its healthy policyholders who have not claimed for every claim-free year. Apart from this, there is a call now to initiate incentives to those customers who follow wellness programmes. At present, some health insurance companies are offering discounts in bills for certain health check-ups and wellness programmes, which in the future may be a more prominent part of all health insurance schemes.

The insurance regulator believes that such incentives would push more people to follow a healthy lifestyle, which would be helpful for insurance companies as well in the long run as the number of claims may reduce over time.

Wellness programmes

According to estimates, a well-designed employee wellness and employee benefits programme can lead to as much as a 25% reduction in health plan costs, sick leave, disability pay and worker’s compensation. Furthermore, a majority of the employees who have undergone preventive health check-ups, found them beneficial in terms of higher productivity at work and better quality of life.

Customised tools

Insurers are hence working on creating customised health-risk assessment tools, to help its group health insurance clients realise their business goals and ramp up productivity. Insurers will increasingly adopt these data analytics tools to identify current and future health and wellness risks, based on an analysis of a wide range of information provided by customers, including health status, lifestyle, family history, work and resident environment, physical activity, nutrition, and modes of transportation.

Many insurers have already started recognising yoga as an eligible preventive healthcare tool by making it part of their comprehensive health insurance policy, where customers can claim discounts on reimbursement of expenses on yoga sessions enrolled in by the customer.

The focus on wellness and maintaining good health will in the end be a win-win situation for both customers and insurers. It is, therefore, imperative that customers look beyond insurance premiums and look for comprehensive insurance plans with added features and minimum capping.

While these benefits will have an implication on the premium charged, they will be instrumental in reducing your out-of-pocket expenditure towards healthcare and wellness.

The writer is Head – Health Insurance, Bajaj Allianz General Insurance. The views expressed in this article are his own