October 2010

Tax Benefit for Employee Health Cover?

By Sangita Ghosh De

The 4th International CII Health Insurance Summit 2010 was focussed on drafting policies for the futuristic industry development that is poised to grow in the country

The 4th International CII Health Insurance Summit 2010, a two day event held during 9th and 10th of September in Delhi, one of the largest health insurance events in India, was a booster dose and pathfinder for the insurance industry particularly serving in the field of healthcare service providers. The focus of this year was on ‘Health Insurance: collaborating to build a foundation for growth and sustainability,’ apt at a time of significant developments in the health insurance industry in India.

The summit was inaugurated by Montek Singh Ahluwalia, Deputy Chairman, Planning Commission along with J Hari Narayan, Chairman, Insurance Regulatory Development Authority (IRDA) and attended by over 500 delegates from across the verticals of healthcare and insurance service providers including the industry leaders, experts and stalwarts in the domain.

The final report on ‘Bridging the payer-provider continuum’ prepared by the CII working groups on health insurance was also launched during the inaugural session. This report disseminates best practices and outlines mechanisms to increase innovations in products and client services including innovations that can help hospitals and insurers deliver better choices and services to the consumers. It also provides the outline of a comprehensive communication and awareness exercise which the industry is planning on undertaking. Such initiatives will help all the stakeholders to prepare for significant growth and will ensure that the growth is sustainable and inclusive. Health Insurance coverage should be made mandatory for organised sector employees in order to help spread the reach of insurance products, along with incentives to employers providing heath cover, stated Ahluwalia in his inaugural speech in the summit that inspired the industry as a whole.

One of incentives could be providing exemption to the part contribution of health insurance premium for employees by employer. “I think the government needs to give very serious consideration to make it mandatory for employers to get group insurance for their workers. We will never be able to spread health insurance  unless an element of incentive-cum-compulsion is introduced. This incentive may come in the form of tax benefits to the corporates providing health insurance benefit to their employees,” argued Ahluwalia.

Besides, the issues of the stakeholders should be resolved and that too in terms of regulatory concerns for Health Insurers who have been in financial stress past few years, assured Hari Narayan in his speech. “In India the penetration of health insurance is low and the government should seriously consider increasing its spending on healthcare,” he highlighted.

Amongst the invited dignitaries Dr Prathap C Reddy, Chairman, Apollo Hospitals, Dr Naresh Trehan, Chairman, Medanta, Analjit Singh, Chairman,Max India and Bhargav Dasgupta, MD and CEO, ICICI Lombard shared their views on Health Insurance. While health insurance is growing 25% per annum and is poised to touch the landmark of `10,000 crore in annual premium soon, it is an industry struggling to be profitable while trying to grapple with growth. For most general insurers, health insurance is now the second largest line of business, accounting for more than 20% of revenue. Although all the business segments, retail, group and social are growing; most insurers loose money on the group portfolio due to aggressive competition amongst the insurers, concerned the summit.

Discussion on Rashtriya Swasthaya Bima Yojna (RSBY) and Arogyasri attracted the international attendees as to how until uncovered population are covered in the health insurance scheme. Currently about 200 million people in India have medical benefits under schemes for government employees, railways, armed forces personnel and through ESIS, RSBY and Arogyasri as well as private health insurance.

The total may well double to 400 million by 2015 and that the time is right for the government to define the role of health insurance in a unified national health policy, felt the industry.

Montek Singh Ahluwalia,Deputy Chairman
Planning Commission“We will never be able to spread health insurance unless an element of incentive-cum-compulsion is introduced. This incentive may come in the form of tax benefits to the corporates and I think the government needs to give very serious consideration to make it mandatory”

Eminent speakers on the first day were S L Mohan, General Insurance Council, S B Mathur, Life Insurance Council, Girish Rao, Nova Medical Centers,  Antony Jacob, Apollo Munich Health Insurance, Dr Damien Marmion, Max Bupa Health Insurance, Dr David Muiry, Swiss Re, (London), Dr Jonathan T Kolstad, University of Pennsylvania, George Neale, Australian Health, AlanWatts, Reinsurance Group of America, Dr R K Kaul, Oriental Insurance, Bhavdeep Singh, Fortis Healthcare, KG Krishnamoorthy Rao, Future Generali India Insurance, Peter Akers, Munich Re Insurance, Shashwat Sharma, KPMG, Segar SampathKumar, The New India Assurance Company,  Jerry La Forgia and Dr Somil Nagpal, The World Bank, Dr Dinesh Arora, NRHM, Kerala, G Kumar Naik, Vajpayee Arogyashri, Karnataka, Dr A K Singla, Apka Swasthya Bima Yojana, Delhi, Sanjay Dutta, ICICI Lombard and Dr Nishant Jain, of GTZ.

The second day of the summit had important discussions on the subject of reforming group health insurance, on group cover pricing and the best practices in the industry on the issue.

The next session on ‘Increasing confidence in health insurance’ discussed on mechanisms to strengthen the interaction between individual insurers and consu ers and how the whole health insurance industry can engage various entities including consumer groups and media to create a more comprehensive understanding of the benefits and processes of health insurance.

The summit also discussed on the role of various industry enablers ranging from data publications to transactional platforms to standards and legislative policies.The eminent speakers on the second day were G Srinivasan, The United India Insurance, Krishnan Ramachandran, Apollo Munich, Amy Laverock, Mercer (Singapore), M Srikanth Charan, IFFCO-Tokio General Insurance, H Srinivasan, Star Health and Allied Insurance, Bejon Misra, Consumer Activist, Prof Ravi Chandran, IIM Indore, Anuj Gulati, Religare Health, Soumitra Sen, DDB India, Shivinder Mohan Singh, Fortis Healthcare, Dr Ashoke Bhattacharjya, Johnson & Johnson, USA, A P V Reddy, Family Health Plan (TPA), Dr Shreeraj Deshpande, Future Generali India Insurance, Luke Rajkumar, L&T Infotech Insurance, Alam Singh, Milliman, Madhu Aravind, HealthHiway, Dr Pervez Ahmed, Max Healthcare, and M R madoss, The New India Assurance.

The summit had a final cut with the closing session on ‘Discussion with CEO’s; collaborating and dialogue, the way forward,’ that was moderated by Manvi Dhillon, Resident Editor, NDTV. The session discussed on key industry goals for the short and the medium term and how they can be achieved. New initiatives to develop closer ties between the health insurance industry and the Government of India as well as international health insurance industry associations were also explored in the session.

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