If you are above 55 years of age and find insurance agents reluctant to sell mediclaim policy on your doorstep, you can address the problem by paying the commission that agents otherwise get from companies for mobilising business.
Insurance Regulatory and Development Authority norms allow general insurance companies to pay a maximum of 15 per cent of the premium as commission to agents.
Mediclaim may need patients to 'co-pay'
Two of the government-owned general insurance companies (United India Insurance and Oriental Insurance Company) recently issued circulars denying commission to agents for mediclaim policies sold to people above 55 years of age.
CS Rao, chairman of IRDA, justified the move. "For every service there is a charge. So in case a person wants an agent's service, he will have to pay more. Those not availing of agents' service would pay less," he told Business Standard.
"Oriental Insurance has filed for new mediclaim products, and we have told them that we will see that they are cleared. Health insurance is a non-tariff product. We are looking at the proposal," Rao added.
The public sector general insurers are feeling the pinch of higher claims from people in the 55-65 age group.
They have to suffer an overall claims ratio of 150 per cent in the health portfolio, which includes incurred claims of 130 per cent, plus up to 10 per cent agency commission, TPA fees, and acquisition costs. However, when it comes to health insurance claims of people above 55 years of age, the claims ratio climbs to over 180 per cent.
The insurers hope their attempts at demotivating agents from selling health policies to people above 55 years can bring down their losses. The companies are already adding 5.4 per cent to the mediclaim premium if a policyholder opts for cash-less hospitalisation.
M Ramadoss, chairman and managing director of Oriental Insurance, said the company had proposed changes in the existing mediclaim policies, with a higher premium for the higher age group and discounts for the lower age group, besides caps on room charges etc.
"We had filed the new products with IRDA in February. The company is awaiting IRDA's approval," he said.
Healthcare costs are rising by 10-12 per cent every year, but the mediclaim premium has remained unchanged since 1998. A senior official at United India Insurance said, "It's a loss-making business (health) with the high claims ratio. So we have decided to take some corrective measures."
In 2005-2006, the total health insurance premium amounted to Rs 1,750 crore. The four public sector general insurers had almost a 90 per cent share in the health insurance market.
According to Sandeep Dadia, director, Enam Insurance Consultants, the solution lay in increasing the customer base, and hiking the premium.
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