Analysis of Claims and Reimbursements made under Mediclaim Policy of the General Insurance Corporation of India

Mediclaim insurance run by government owned insurance company General Insurance Corporation of India (GIC) is the only private voluntary health insurance scheme available in India currently. This scheme has been in operation since 1986 and from time to time a number of revisions have been carried out to address the needs of their clients. The documentation on claims and reimbursement of this scheme is scanty. This paper analyses 621 claims and reimbursements data pertaining to policy initiation years 1997-98 and 1998-99 of Ahmedabad branch of one of the subsidiary companies of the General Insurance Corporation of India. The analysis suggests that the number of policies and premiums collected have grown at significant rates, more than 30 per cent during 1998-99 and 50 per cent during the year 1999-00. The growth had implications for the management of scheme in terms of problems of adverse selection or provider induced demand and falling premiums per insured person. It was found that the number of claims increased by about 93 per cent during the year 1998-99 when polices sold grew at 32 per cent. The study estimates that about 1/3rd of claim amount increase is because of the problems of adverse selection or provider induced demand. The analysis of break-up of reimbursements suggests that about 40 per cent of reimbursements are made towards doctors fees. This is followed by diagnostic charges, which accounts for about 30 per cent. This makes the insurance claims highly vulnerable to provider-induced use of resources. The findings also suggest that the insurance company took on an average 121 days to settle the claim. It is pointed out given the demand side and supply side imperfections in the healthcare markets and absence of appropriate regulatory mechanisms in place, the Insurance and Development Regulatory Authoritys proposal to ensure payment settlement within 7 days is highly ambitious. The study also analyses reasons for the delay and cases where reimbursements have been less than claims submitted.