Insurance companies and hospitals are thrashing out the contours of a new pricing model where apart from standard factors; the degree of seriousness of a disease or a medical procedure will also be incorporated while calculating premiums.
Thus a higher premium will mean that a person will be entitled to claim insurance for a more serious degree of the disease and vice versa.
For instance, if a person is insured for R 3 lakh, and a heart bypass surgery for which he is covered gets complicated, in the new system the insurance firm may agree to settle only part of the bill, if the premium paid is below a certain level.
In the existing system, the premium that an insured patient paid is largely determined by three standard factors: his or her age, the number and type of diseases that he or she wanted to be insured, and the amount of premium she or he agreed to pay every year.
The new model, expected to be rolled out in the next month or two, is one of the ways by which insurance companies and hospitals are seeking to end the impasse over cash-less hospitalisation.
“Hospitals will take up the issue with the insurance companies on how to arrive at a new model for calculating premium,” said Parrvez Ahmed, managing director and CEO of Max Healthcare.
Hospitals said the onus is on insurance companies to formulate an appropriate “differential pricing” model for the same medical procedure or ailment.
A chief executive of a private general insurance company, who did not wish to be identified, said his company is discussing the matter with its list of empanelled hospitals.
The government is of the view that insurance companies could face major cash outgo problem in the coming years.
Minister of state for finance Namo Narayan Meena earlier said that insurance companies could be in serious trouble and may even face insolvency if the hospitals continue to over charge.
Public sector insurers have a cost ratio of around 140 per cent of the premium received under the health portfolio.