Star Health Insurance.

Mr V. Jagannathan, Chairman and MD, Star Health Insurance.

 
 









Source:BL,M. Ramesh,Bridget S. Leena,Photo: Bijoy Ghosh,May13,2010

For decades, Tamil Nadu has been a welfare state. The legendary Kamaraj, as Chief Minister, conceived the noon-meal scheme for children, which served the dual purpose of ensuring nutrition to children and checking school drop-out rate.

This scheme has been replicated in many other States and while no study seems to have been conducted quantifying the benefits, the enormity of the benefits itself is not inconceivable.

Similarly, the public distribution system in Tamil Nadu, while not perfect, is visibly benefitting the poor.
In keeping with this ‘welfare state' trend, the Government of Tamil Nadu last year announced the ‘Kalaignar Maruthuva Kaapeettu Thittam', an insurance scheme for people ‘below poverty line'. The scheme is simple: The Government pays the insurance premium on behalf of the poor. The insurer is selected through a tendering process to ensure that the Government does not over pay.

There is a Centrally sponsored insurance scheme for BPL families called the Rashtriya Swasthya Bima Yojana (RSBY), which was introduced on April 1, 2008. But the beneficiaries are entitled only to hospitalisation coverage for up to Rs 30,000. The Union Government pays 75 per cent of the insurance premium, while the rest is to be picked up by the State governments. Needless to point out, the Kalaignar Maruthuva Kapeethu Thittam improves upon the RSBY significantly.

A similar scheme was first implemented in Andhra Pradesh. But credit is due to the Tamil Nadu Government for not only adopting the scheme quickly, but also (unlike Andhra Pradesh) launching it at one go in all the districts of the State.

In Tamil Nadu, the programme is implemented with a consortium of insurers. India's first standalone health insurance company, Star Health and Allied Insurance Ltd, has a 42 per cent share of the premium paid by the Government.

In an interview to Business Line, Star Health's Chairman and Managing Director, Mr V. Jagannathan, spoke about the merits of the scheme.

Excerpts from the interview:

How is the TN scheme different from the one in AP?

I would like to say that each scheme has its own merits. For all practical purposes both the schemes cover the BPL population and provides coverage for all major surgical procedures. While the Tamil Nadu scheme operates for 4 years, AP scheme is renewable every year. In case of Tamil Nadu, the scheme was introduced in all the districts in one stroke.

Can you please describe the coverage and benefits of the scheme?

In the case of the Tamil Nadu scheme, though the coverage is Rs 1 lakh for a family, for most of the major diseases, such as of heart, the cover is higher — Rs 1.25 lakh and Rs 1.5 lakh. So also for kidney transplantation etc., increased amount is given. Though the hysterectomy was not covered initially, coverage has been extended for this surgery too. In birth defects, cochlear implantation is covered to some extent.

Is the actuarial science behind the scheme sound?

As regards the actuarial science behind the scheme, it has to be evaluated only at the end of the second year since the number of surgeries are now picking up day-by-day and the average strike rate has gone up to Rs 2 crore plus per day. In the initial stages the claims were not up to that extent as the cards distribution was going on. The public is being educated and becoming aware of the scheme now and getting adequate benefits of the scheme.

Are you making money? How is your claims experience?

I will not be in a position to answer at this stage since this is a four-year scheme there will be upside and downside and the correct position will be made known only by the end of the fourth year.

What is Star Health doing to check the unhealthy practices often associated with heath insurance?

We have a police officer in every district and also one Chief Vigilance Officer in the rank of DIG (IPS Retired officer) at the corporate office. They systematically visit these hospitals and give us information of activities of the network hospitals. Every hospital has a representative of the STAR as a Liaison Officer to take care of the patients as well as the company's interests.

Apart from that, the system is devised such that all the claim documents are uploaded and examined by expert doctors and pre-authorisation is given. I should also mention that this process does not take much time since the entire operation is online.