Page 222 - India Insurance Report 2023- BIMTECH

210 India Insurance Report - Series II

PM-JAY delivers Insurance Mode, Assurance/Trust Mode, and hybrid Mode. In Insurance Mode,
the State Health Authority (SHA) is pivotal in identifying an insurance company through a tendering
process. The insurance company settles the beneficiaries’ claims by directly paying the health care service
providers. In the trust model, the government bears the financial risks, and insurance companies play no
role. In the hybrid model, the insurance companies have some role. They pay a certain amount of the
cover, and SHA pays any claim above this stipulated amount. The trust model is dominant, and the trust
itself bears the risk ( National Health Authority, 2022).

The Insurance Regulatory Development Authority of India (IRDAI), in its Vision for 2047, aims for every
citizen to have appropriate life, health, and property insurance coverage and appropriate insurance solutions
support for every enterprise by 2047. The vision aims at amplifying insurance penetration through Bima
Trinity. Bima Sugam - a unified platform of insurers and distributors facilitates policy purchases, service
requests, and claims settlement for customers in one convenient portal. Bima Vistar is a comprehensive bundled
policy covering life, health, property, and accidents and allows defined benefits for each risk category, ensuring
quick claim payouts without surveyors. Bima Vaahaks is a women-centric workforce operating at the Gram
Sabha level. They will educate and convince women about comprehensive insurance benefits, particularly
Bima Vistar. The Bima Trinity aims to empower women and will play a significant role in financial inclusion.

7. Positioning of Private Health Insurance Companies

In keeping with the pursuit of India’s march towards (partial) universal Health coverage, the share of
government health expenditure vis-à-vis total health expenditure has increased to 40.6% in 2019 – a steady
jump from 28.6 % cent in 2014. It resulted in a sizeable drop in the share of out-of-pocket expenditure. In
2019 it was 48.2% of total health expenditure from 64.2% in 2014. The share of Private Health Insurance
Expenditure as per cent of Total Health Expenditure (THE) has increased steadily from 3.4% in 2014 to
6.6% in 2019. In the same period, the share of Social Security as per cent of Total Health Expenditure
(THE) grew from 6.0% to 9.6%.( MOSPI, 2023). The launch of health insurance schemes such as Arogyasri,
RSBY, PM-JAY etc., using insurance model, have helped increase health insurance coverage.

The Malhotra Committee heralded the opening up of the insurance sector to private players with
the enactment of the IRDAI in 1999, and ending the monopoly of government entities like LIC and
GIC. There are 23 life insurance companies, which include one public sector company; 27 general insurance
companies, including five public sector companies; seven standalone health insurance companies and
two specialised insurance companies ( both government-owned) and one government Reinsurance company
and twelve Foreign Reinsurers Branches/Lloyd’s India. Insurance penetration is 4.2% of the GDP.

In case of PM-JAY, only seven states/U.T.s went for the Insurance model, while twenty-three
States/U.T.s adopted the Trust Mode, and three States adopted the Hybrid Mode. Naturally, 63.9% of
beneficiaries belonged to the Trust mode. Hybrid and insurance modes covered 19.5% and 16.6% of
beneficiaries. Does this mean the states (SHAs), the decider for a healthcare delivery and scheme
implementation mode, have less trust in the insurance mode? It could also be that insurance companies
find PMJAY guidelines that mandate that insurers will be required to refund the ‘surplus’ premium if
they fail to reach the claim ratio specified in comparison with the premium paid (excluding GST &
Other taxes/Duties) in the whole period of the insurance policy – a little too daunting.