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Health insurance: Towards a simpler customer journey

A current pain point for customers is that health insurance policies are too complex to understand. (Illustration: SHYAM Kumar Prasad)

By Ashish Mehrotra

Millions of Indians continue to deplete their savings putting their future at risk to meet spiralling healthcare expenses. With only 20% of Indians covered by health insurance, the majority remains vulnerable to medical inflation, currently at 15% and outpacing the rate of inflation in India. This is a significant cost not just for individuals, but for us as a nation. Swiss Re reported India’s ‘health protection gap’ to be a whopping $369 billion in 2018. It calculated the “stress” on household finances from spending on medical expenses and the incidence of people not seeking treatment, because they find it unaffordable.

Towards a simpler customer journey

A current pain point for customers is that health insurance policies are too complex to understand. Exclusions require scrutiny and interpretations can vary—the cause of mistrust between consumers and insurers. Standardisation regulation will weed out the ambiguity. Irdai’s recently issued draft guidelines for a ‘standard health insurance product’ will set the threshold for a product that offers basic cover, is simple to understand and uniform across insurers. Without variations like add-ons or optional covers, it will mean a less complicated decision, especially for first-time buyers.

The regulator is also factoring in changing customer expectations. Max Bupa’s research across six cities last year showed that younger customers want to be incentivised for starting early. Irdai is opening the door wider with the standard product, by calling for attractive pricing and a cumulative bonus for regular renewal, aimed at incentivising younger policyholders.

On the anvil is standardisation of exclusions, which would prescribe and limit the number of illnesses and diseases that remain outside the ambit of insurance coverage. Proposed guidelines will require insurers to disclose provider network tariffs and packages, making the billing system more transparent.

Under new guidelines, customers can now opt for claim proceeds settlement as a lump sum or in instalments, giving them greater financial flexibility. In line with a directive that comes into effect from July 1, insurance companies will soon need to provide a mechanism to track claims. A step towards clearer, seamless and transparent communication, including notifying customers about the status of the claims at different stages of processing.

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Access from inclusion & innovation

Regulation has broadened the scope of coverage and made it more inclusive—mental illness and HIV are now under the ambit of health insurance. Products in the future will address specific needs or be tailored to particular segments. New models will lead to offerings for senior citizens, diabetics or those with a history of cardiac ailments. Technology will play a disruptive role in this shift, as the industry changes course from reactive to preventive care. In countries like the UK and the US, wearables and the Internet of Things have powered a new product class— ‘interactive’ policies’ that incentivise healthier living.

A health insurance offering that helps people keep diabetes under control, for example, could leverage wearable tech for regular monitoring of nutrition, exercise and check-ups for improved health outcomes. Premiums could be calculated based on a customer’s health record, updated with data collected and analysed in real-time. This will enable personalised health plans at scale, faster service and customer support, with relevant data being just a click away. Premiums or discounts for meeting fitness goals, can be customised to offer true value for each customer.

The writer MD & CEO, Max Bupa Health Insurance