Dr.N.JEYASEELAN , CONSULTANT, MADURAI. vijayjeyaseelan@yahoo.co Mobile: 09344108120

1. PWDS STUDY ON NEERA’S MICRO HEALTH INSURANCE PROGRAM:PRELIMINARY FINDINGS Presented at the Multi stake holder workshop organized by DATA, at Madurai on 15th Oct 2007. Dr.N.JEYASEELAN, CONSULTANT, MADURAI. vijayjeyaseelan@yahoo.co.in Mobile: 09344108120

2. ACRONYMS • PWDS- Palmyrah Workers Development Society • NEERA- Network for Education & Empowerment of Rural Artisans • DATA- Development Association of Training & Technology Appropriation • NMHI- NEERA’s Micro Health Insurance • BPL- Below Poverty Line • IRDA- Insurance Regulatory & Development Authority.

3. PWDS STUDY ON NEERA’S MICRO HEALTH INSURANCE PROGRAM OBJECTIVES • To review the progress under the NEERA’s MHI program. • To compare the different models & also the different products offered. • To document the problems faced by the different stakeholders in implementing the NEERA’s MHI program • To evolve suggestions to the problems identified • To identify the issues for policy advocacy

4. Methodology • The study was carried out by Dr.N.Jeyaseelan, in 5 partner NGO locations through field survey out of the total 10 partner NGOs implementing the program. Primary data collection was through interview schedule for clients, case studies and through focus group discussion with stakeholders. Secondary data was collected from NGOs and DATA, (co-ordination centre of PWDS/NEERA program), Madurai. The study was carried out during July-Oct 2007.

5. Micro Health Insurance (MHI) in India – An Overview • Present MHI coverage: 3% of population. • While the total insurance products approved by IRDA in 2005-06 was 120, only 2 were micro insurance (1 micro crop insurance by Agriculture Insurance company and 1 micro health insurance by Star & allied health insurance company) products. • Except National Insurance company, all other insurers have reached their social & rural obligations for the year 2005-06. • New MHI scheme of Govt of India for BPL families has been launched in Himachal pradesh.

6. PWDS / NEERA MICRO HEALTH INSURANCE Cumulative Progress (Mar’05-Sep 2007).Rs.inlakhs • No. of families covered :6781 • No. of members covered :26979 • Premium collected :Rs.28.65 • Policies due for renewal :5868 • Policies renewed :368 • Renewal rate :6.3% • Commission received from co. :Rs.2.47 • Service charges received from SHG:Rs.0.11

9. UHI- Universal Health Insurance product (A govt. sponsored product) is from United India Insurance company. UHI is implemented only by NJT. NEERA MHI (A customized product) product is from New India Assurance company & implemented by all the remaining 9 partner NGOs.

10. MHI PENETRATION IN NEERA PROGRAM As NEERA has not made the product compulsory, penetration is lower. Penetration rate is the indicator for the marketing efficiency of NGO / insurer. DESIRABLE LEVEL: ABOVE 80%

11. Claim expenses in NEERA’s MHI Rs. in lakhs. Desired Benchmark: 75% MHI product in NEERA program is a profitable proposition for insurers.

12. Amount of Claim lodged Vs Settled in NEERA’s MHI Rs. in lakhs. Overall % of claim settled to total claim lodged comes to 40.3%, which indicate that the insurer is more rigid in claim processing.

13. Claim Occurrence in NEERA’s MHI Generally assumed benchmark for claim occurrence: 3% /year Figures in Brackets indicate the claim occurrence / year

14. Claim Occurrence in NEERA’s MHI • Overall, NEERA’s target groups have less risk as the claim occurrence rate of 1.2 % / year is well below the benchmark level of 3%. • If the claim occurrence rate is above 3%, the concerned partner NGOs shall take up with Public health authorities for organizing some preventive care programs

15. No. of Claims Lodged, disposed & pending Overall claim pending at 9.7%, is not a serious cause of concern.

16. Claims pending for the period of Figures in brackets indicate the percentage to the total. Around 72% of claims are pending for more than 3 months, on which insurers should focus their immediate attention.

17. No of claims: Full Vs Partial settlements More of partial claim settlements indicate that the product features are not properly understood by clients & insurer’s processes need a revision.

18. Time taken for claim settlement As per IRDA norms, a claim has to be paid or disputed by the insurer giving relevant reasons within 30 days of receiving all relevant documents. Insurer has taken more than 3 months in 41.3% of the cases. Claims processing needs to be revisited. Figures in brackets indicate the percentage to the total.

19. Disease-wise break up of the claim settled amount. Rs in Lakhs.

20. Size of Average claims paid to various diseases.Amount in Rupees.

21. Comparison between PWDS / NEERA health survey 2002 & Actual data of NMHI

22. Claim rejection rate in NEERA’s MHI When the claim rejection rate is more than 5%, it indicates that the product has too much of restrictive clauses with coverage policy.

23. When Claim rejections are more • It merits the attention of the stakeholders on the following three important points • To what extent the product design is customized to match with the local need • How well the product features are communicated to clients and understood by them. • Reasonableness of the claim settlement processes / policy of the insurer

24. Renewal rate in NEERA’s MHI Renewal rate is the best indicator for the customer’s satisfaction on the product. Besides, settling claims, HR (Human relations) needs to be focused DESIRABLE RENEWAL RATE IS ABOVE 80%

25. Product-wise comparison UHI – Universal Health Insurance product (Govt. sponsored insurance product) NMHI- NEERA’s Micro Health Insurance product (A customized insurance product)

26. Model-wise comparison DO –Divisional Office as Delivery unit (AIRD & RCPED NGOs are under the DO fold) BO - Branch Offices as Delivery units (The remaining NGOs are under the BO fold)

27. Challenges • Product • Process • Place • Pricing • People • Promotion

28. Product • Exclusions (e.g. Operations not covered in the I year) not properly understood by the SHG members & Doctors. • Difficulty in establishing the cases of Pre-existing diseases • As per policy, no sub limits for room rent, Dr. fees and so on. But, insurance company has followed sub limits and settled the claims partially.

29. Process • Delay in receipt of Identity cards for the insured • Delay in receipt of claim forms due to the practice of informing the claims orally. • Not informing the MHI cover availability at the time of admission in the hospital • Wrong filling in claim documents – writing the name / age differently • Difficulty in getting the bills from the doctor • No information to clients from company on claim status (As per IRDA norms, insurers have to respond to policy holder’s communication within 10 days of receipt of the message from them)

30. Process • Insurer has not mentioned the reasons in case of partial claim settlements. • No appellate authority to appeal against claims rejected or long pending claims (Pending for more than 3 months.) • No clarity on which cases need First Information Report (FIR) from police • Renewal due dates not reminded (except in NJT NGO ) from the company • Proper Management Information System is lacking • No separate program / bank account for MHI, hence income and expenses related to MHI delivery not captured.

31. Place • Insurance offices based at far off places – The main mode of communication is Phone – No proper response from the company • DATA office played the facilitation role in the initial period only, which should have been continued till the project gets into auto-piloting stage. • No Focal points for MHI with Specified person in Federation, to coordinate the MHI.

32. Pricing • Universal Health Insurance product is subsidized when compared to NEERA’s customized Micro Health Insurance product of New India Assurance. • For long term, availability of subsidy can not be assured. • Members need the BPL list number for enrolling under the Universal Health Insurance, which is not available for some of the target group members.

33. People • Staff turnover in DATA, NGO, Federation, Insurance company affected the continuity, As the program was depending on Individuals rather than on institutionalizing the process. • Moral hazards among SHG members / hospitals in a few cases. • All doctors not briefed on MHI policy features / conditions.

34. People • Still many SHG members are not aware of the Insurance concept, as many compare it with savings scheme. • Lack of NGO staff capacity on claim handling. • Federation leaders not knowing all the product features. (mainly exclusions) • Insurance staff involvement (except a few) lacking. • Emotional exchanges between insurers and NGOs led to communication gap.

35. Promotion • In the earlier period, SHGs had been given the hand bills, which indicate the coverage /exclusions. This practice has been stopped at the later stage. • For paying commission, third party route has been adopted. In many cases, the commission is yet to be received by NGOs. • Insurance company’s visual posters on MHI not seen during the field visit.

36. Opportunities – The Way Forward • Large number of families under NEERA fold. (44399 families) • Ever growing PWDS’s network – almost reaching all the Districts of Tamilnadu except Chennai & Tanjore • Hands on experience of two & half years of MHI program implementation • MHI data for the last 2 years – a cutting edge for future negotiation with the company for improving the package (removing exclusion clauses / including maternity benefits to a limited extent)

37. Opportunities – The Way Forward • United Nations Solution Exchange / ILO seeks evidence based MHI info for policy advocacy. The present study will be highly useful to bring in needed policy changes. It may lead to Action Research Project on MHI involving PWDS & UNDP / ILO. • Possible collaboration with state agencies under the newly introduced Govt of India’s new Micro Insurance scheme for the BPL households (Phase: I). (If it comes to Tamilnadu) • NGO partnership allowed • Product offers Life + Health Insurance + Pension after 65 years.

38. Opportunities – The Way Forward • New India Assurance is interested to form a Special unit for MHI. • Interest of other players e.g. Star Health and allied insurance company- a stand alone Health insurance company • Scope for introducing Cash less facility in selected hospitals.

39. Opportunities – The Way Forward • Community is ready for even 10% co-payment, if hassle free (people are fed up with getting the documents from the hospital) facility is ensured. • Appointment of Federation as MHI agent & specified persons to take 25 hrs training • Introduction of MIS to track the key indicators like Penetration, Claims paid out, Claims rejection rate, Renewal rates and so on.

40. Opportunities – The Way Forward • DATA to build the capacity of Community Based Organizations in MHI program management. • Possible collaboration with other development facilitating institutions for developing Information Communication Education materials and visuals to spread the concept of MHI among the community. • Sharing the pilot experience in forums / networks

41. Immediate impacts of the study • Some genuine claims, where partial settlements were made, when brought to the attention of the insurer, additional claim amount has been sanctioned by the insurer. • In some claims, where claims were rejected due to documentation inadequacies, have been reopened and claim has been sanctioned. • PWDS’s willingness to share the study results to seek some Action Research Partnerships on MHI with the donors.

42. Limitations • Trend analysis over the years have not been attempted as the program has just completed 2 years. • Only 5 partner NGO locations visited for the MHI (Micro Health Insurance) study. • The case study documentation from members is subject to recall bias.

43. I thank PWDS, DATA team, NEERA partners, SHGs, CBOs (Federations of SHGs), Doctors & Insurers for their cooperation.I welcome your feedback / comments / Suggestions.Thank you. Dr.N.Jeyaseelan, Madurai.