8-10 % mediclaim policyholders claim in a year

On an average, eight to ten per cent of the insured population claim under mediclaim. Last year, eight out of hundred mediclaim policyholders reported a claim. Despite the lower frequency of claims, the entire premium kitty of the public sector general insuers was wiped out.

Sample this: In 2005-06, Oriental Insurance covered over 32 lakh lives in mediclaim. While 1.2 lakh people reported claims, 98,692 of them were paid. That means of every 100 people, four people reported a claim. However, despite a frequency of four, the incurred claim amount is over Rs 400 crore for Oriental insurance with a corresponding incurred claim ratio of 120 per cent. Add to this the management expenses, commission, TPA fees and acquisition costs "� the total claim ratio comes close to 140 per cent.

Similarly, the claim frequency is 17 per cent for New India Assurance, 8 per cent for National Insurance and 3.4 per cent for United India Insurance.

M Ramadoss, CMD, Oriental Insurance, says, "Although only 1.2 lakh people have reported a claim, the severity of the claim is high. Individual claims are of bigger amount."

Public sector insurers are revamping mediclaim with an increase in premium, for which they will apply to the Insurance Regulatory Development Authority of India this month.

The newer mediclaim premium will be more than double of the previous sum for people above 55 years of age and increase over 50 per cent for people above 20 years. For people up to 20 years, the premium will either be flat or marginally lower than the earlier.

Experts, however, say increasing premium is not the solution to offset the losses and insurers will have to plug in the loopholes that make health insurance a bleeding portfolio.

According to Nayan Shah, director, Paramount Healthcare, a leading TPA, the average claim at about Rs 23,000 is the highest in Mumbai, Bangalore and Delhi, followed by Rs 16,000 in Calcutta and Rs 10, 000-12,000 in rural areas.

However, mediclaim has a standard premium on an all-India basis. Therefore, a metro mediclaim policyholder is subsidising an urban policyholder and, similarly, an individual policyholder is subsidising a corporate poliyholder.

Sandeep Dadia, director, Enam Insurance Brokers, says, "Mediclaim should have different premiums for metros and non-metros. An individual wishing to undergo treatment in a top-grade hospital should be charged a higher premium, while those willing to take treatment in a B or C-grade hospital should be made to pay a lower premium."

"There should be regulation for healthcare providers, and restricted benefits for corporates and billing procedures should be standardised to ensure transparency. Also, ICD codings should be made compulsory for all providers irrespective of insurance," he adds.

Corporates pay Rs 800- 1,200 premium per employee in group covers against Rs 1,800- 2,200 paid by people in case of individual health covers.

Group covers provide the insured maternity benefits, cover for the new-born from day one, cover for all pre-existing illnesses and similar benefits to around four dependent family members. But individual covers provide limited insurance with at least 12 diseases excluded in the first year.