‘Health insurers to become managed healthcare firms’

Mumbai: Indian health insurance is expected to evolve from providing indemnity to healthcare management and, eventually, healthcare delivery as insurers struggle with rising costs.

According to Milliman, the world’s largest actuarial consulting firm, the Indian health insurance industry is evolving and has moved from pure indemnity to developing healthcare networks and managing relations with providers. The health business is expected to record high growth in post-Covid years due to increased awareness levels, upward revision of premiums, and growing income levels.

“Insurance premiums will continue to move up because medical inflation exceeds general inflation as it is largely wage-driven and there are new kinds of medicines and treatments. Also, the utilisation of health insurance increases as consumers get richer,” said Joanne Buckle, principal & consulting actuary at Milliman.

According to Buckle, in the early stages, health insurers behave like traditional insurance companies indemnifying claims. But to keep the product sustainable, they must manage providers and start managing more claims. This is similar to how markets in the West have evolved, having a bigger say in providing healthcare. “Very few have the capability to move up the value chain... the trigger for the shift is competition and determined by who is there in the market,” said Buckle.

According to Lalit Baveja, senior healthcare management consultant at Milliman, social health schemes are converging into the Pradhan Mantri Jan Arogya Yojana. “The insurance model helps increase supply side,” he said.