Faced with rising outgo on account of health insurance premiums, India Inc is increasingly shifting to the co-payment model, whereby up to 25 per cent of the claim amount will have to be borne by the employee. The insurance company will pay the balance.
Co-payment provides tangible benefits to companies in terms of reduced insurance premium.
Typically, the co-payment ratio for the employee ranges from 10-25 per cent. So, for every claim of Rs 1 lakh the policyholder has to shell out Rs 10,000 from his/her pocket, before the insurer pays up the remaining Rs 90,000.
According to Sanjay Datta, head of underwriting and claims, ICICI Lombard General Insurance, “Employers are increasingly resorting to co-payment to ensure optimal utilisation of benefits by policyholders. For example, the insured may not go in for a deluxe room when he is footing a part of the claim.”
Most general insurers feel co-payment in health insurance policies will also ensure that hospitals don’t jack up the prices for the insured.
For New India Assurance, the country’s largest insurer, almost 20 per cent of their group health insurance policies have a co-payment clause, said general manager Segar Sampathkumar.
According to a recent report by ICICI Lombard General Insurance, the preference for co-pay has increased to 18 per cent of all group health insurance policies in fiscal 2012-13 from 16 per cent in the year-ago period.
However, other cost containment measures, such as applying sub-limits on the claim amount on common illnesses, such as cataract or kidney stone have fallen to 10 per cent in FY13 from 34 per cent during the previous fiscal.
Interestingly, industry experts say, many insurance companies have started introducing co-pay clause for individual health insurance policies sold to senior citizens. For instance, New India Assurance has a co-payment clause for new policies sold to individuals over the age of 55.