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16th April, 2014: Insurance companies denied coming up with a standalone OPD Health Plan this soon as there is no point of it when the basic hospitalisation cover in India is so low.
75% of medical spending in India is out-of-pocket according to Swiss RE's report. Low penetration of health insurance in India is one of the reasons behind this. 40% of hospitalised are pushed below poverty line due to lack of financial planning and only 15 % of the population has some form of health cover. Preventive care and out-patient services with high need and frequency of occurrence are not covered by most of the hospitalisation insurance cover. So, these expenses are also paid from pocket even after having insurance.
Even check-ups and minor treatments can be a financial worry for many with rising medical inflation and 70% dependence on private hospitals that have variable and unregulated pricing methods. Apollo Munich and ICICI Lombard have come up with out-patient or OPD insurance in the group insurance segment but there is no retail product in the OPD segment yet which would offer specifically cover expenses related to diagnostic test and treatment costs. The options which are available comes packaged with a health indemnity plan and are either expensive or have many conditions & sub-limits.
According to insurers, the market is still in struggle with the basic health coverage and secondary coverage like OPD has not been evolved yet. So, this area has not been focussed yet. Apart from this, the current system also doesn't support such a product to be a viable business for them.
There is no point in taking an OPD cover if a person is not having basic health insurance plan according to K.K. Mishra, the Chief Executive Officer of TATA AIG General Insurance.
MD and CEO of Medimanage Insurance Broking, Sudhir Sarnobat said that as OPD charges are not catastrophic in nature, this is not an essential cover in India where basic hospitalization cover is so low.
According to the Director of Max Bupa Health Insurance, Sevantika Bhandari, it is difficult for insurers to administer the high possibility of overuse or misuse. Once the primary healthcare system in India becomes more organized then the insurance companies will be more comfortable in covering such treatments. After its implementation, companies can even bargain with the clinic chains for offering discounts to customers. However, the treatment can be restricted to clinics only or medicines must be purchased from network clinics only. The visit to doctor can be restricted to four in a year.
The primary reason of OPD being a costly insurance product is the lack of substantial data pool on OPD treatments. The protocols and treatments under OPD are not even standardized yet which makes it difficult for underwriters to price & underwrite these products. Necessary steps are taken to make this sector more transparent and organized like Electronic Health Records.