The real cost to insurance companies is low. It is not surprising to know that the impact achieved is low too. Let’s talk about this in detail.
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Last week Rhea called her insurer to inquire about the complementary health check-up benefit in her health insurance plan. She had general weakness but otherwise was healthy. Her doctor had advised her a few medical tests to diagnose the reason behind her body weakness.
As Rhea had medical insurance cover, she wanted to utilize her policy coverage benefits. She had not used her health-checkup benefit in the past nine years.
She was a bit excited and relieved to use this benefit now. Surprisingly, the free medical check-up feature did not serve her purpose. Her health insurance policy permitted her to pay for a lipid profile, ECG, complete blood count, and blood sugar tests. Many other tests including thyroid profile and Vitamin check-up package were not a part of the list.
The policy did not provide the provision to customize or enhance the scope of health check-up cover by paying an extra amount. She had to buy an additional policy and take the blood test twice to avail the coverage benefits. And when she found this out, she was complaining, and then she had to a comprehensive health check-up package, independent of the free benefit.
So, from an insurance company’s point of view, the policy was not designed to replace the suggested diagnostic tests. It was designed to be a wellness benefit for a proactive medical check-up. So, the question remains, do these wellness benefits serve any real purpose of the policyholders?
Health insurance companies include wellness benefits in their health insurance plans to differentiate them from others. Driving customers’ need and increasing competition in the market can be two primary reasons. These are mostly preventive health check-ups as a part of the wellness package.
Most of the insurance companies used to provide health check-up cover once every four years. However, partly motivated by low utilization, insurance companies now offer these check-ups every year.
Second medical opinion is another common benefit under the wellness feature. Insured patients with life-threatening conditions can consult with a panel of their insurer’s doctors to get an independent view on their ongoing medical treatment. Sometimes the benefit offered by the health insurance companies is the OPD discounts on health treatment in their panel.
Insurance companies readily inform that the utilization of these medical coverage benefits is low. Moreover, the real cost to insurance companies is also low. Not surprisingly, the impact achieved is low too. It is not a primary reason for customer loyalty for insurance providers. And its fundamental design is the primary reason behind its low utilization.
A healthy individual with no medical complaints and no symptoms might show resistance to voluntarily getting medical check-ups done. Additionally, the complication of availing the benefit further reduces its utility. Corporate wellness programs might see higher utilization on-site because of the easy accessibility, but in absolute terms they remain terribly low.
Taking a step back, if we assess the pattern of availing wellness benefits, preventive health check-up claims are pretty low in the order. Someone who is healthy and is conscious about his health will first like to opt for lifestyle and diet changes. Thereafter, a person will like to take up a morning walk or follow a fitness regime by hitting a gym or practicing yoga, and aerobics.
Many organizations that have set-up wellness evaluation programs for their employees have found out that people actually opted to wake up early and go for a jog. Most of them avoided taking a free health check-up as that will not turn over their health.
Oddly, we can get real wellness benefits for free. You can find various tools that can help you meet your health goals. With fitness apps, you can track your daily goal of steps or heart points. You also get your monthly or weekly fitness report on your email. Moreover, there are apps that can help you track your daily food intake as well.
It’s your initiative and determination that requires pro-active action to overcome your challenges. It becomes challenging when people are busy meeting their deadlines and fighting daily fires. The average number of steps taken by people living in urban lifestyles is less than 5000.
Now the health insurance sector has caught on to this concept and is motivating the policyholders towards a healthy lifestyle with these fitness and wellness programs. And the initiatives are being taken to ensure its optimal utilization.
The Insurance Regulatory and Development Authority of India issued guidelines in September 2020 on preventive and wellness features. The IRDAI’s mandate mentioned that it should be designed with the objective of improving and keeping up the good health. Insurance companies are encouraged to incentivize the policyholders who meet the set wellness criteria with reward points.
The insured can utilize these points to save on the policy renewal premium or redeem it for membership in sports clubs, gyms, and yoga sessions. The coverage scope has expanded beyond diagnostic tests and hospitals. The insurance companies can use the opportunity to set the wellness criteria as per the lifestyle adopted by the insured’s and not just his health status.
Coming back to the Rheas case, this implies that a user-oriented approach to wellness can help the insurance company to convert the annual health check-ups into reward points. Accumulated over nine years, the insured can redeem these reward points towards a medical check-up program of her choice.
It would help in eliminating the remorse of an unused health insurance benefit and help in serving the real need of the policyholder. The insurer can prescribe its panel of hospitals for redemption. If people start utilizing diagnostic test facility it would ensure early detection of a health condition. This means that with health insurance they can also avail timely treatment. It will also mean a greater ability to steer patients in case of hospitalization claims. It is actually a win-win situation for both the insured and the insurer.