Let's talk money. And not just any money, but the kind that every chief financial officer (CFO) in India is losing sleep over - health insurance premiums.
We've seen a steep rise in claims recently, primarily driven by an increase in hospitalization, critical illnesses, and monsoon-related ailments like Dengue and Malaria.
For example, ICICI Lombard's claim ratio in the second quarter of FY23 jumped to 82 percent compared to 74 percent in the previous quarter. That's a lot of money heading out the door, right?
And guess what? Experts say the claim ratios, which were largely stable in the first two quarters of 2022, have seen a steep increase starting from September.
Rising costs, new advances in medical treatments, technologies, and even the changes brought about by a pandemic are adding to medical inflation, which in turn is impacting health insurance premiums.
Scary? Absolutely. But don't fret. We've got three nifty tactics up our sleeve that can help you get a grip on those spiraling health insurance premiums:
- Tweaking the terms & conditions in the policy (Hint: Co-pay, deductibles, and room rent policies in group health insurance could be game changers)
- Turning to preventive care (Spoiler: An ounce of prevention is worth a pound of cure)
- Routing to the right hospital (Teaser: Not all hospitals are created equal)
These strategies can be instrumental in preserving your company's bottom line as we have done for leading companies like Sarvatra, NTEx, and Knorr-Bremse. We’ll cover them in the following sections.
First, let’s look at each of the three tactics in detail.
1. Adapting Policy Terms
Insurance policy terms need to be adaptable, adjusting to market fluctuations and regulatory changes. With Loop, you can fine-tune their policies beyond just implementing co-payments.
- Leveraging Co-Payment: This method involves an agreement between the insurer and the insured, where the policyholder bears a fixed proportion of their medical expenses. Consider a policyholder insured for INR 10 lakh with a co-payment clause of 10%. If they face a hospitalization bill of INR 5 lakh, they bear INR 50,000, with the insurer covering the rest. This method can significantly reduce annual insurance premiums by about 20% to 30%.
- Tailoring Deductibles: Loop allows CFOs to adopt policies by including deductibles, a specified amount paid out of pocket before the insurer begins to cover costs. For example, a policy might have a deductible of INR 20,000. If the insured incurs medical costs of INR 1 lakh, they first pay INR 20,000, with the insurer covering the remaining INR 80,000. This can lower the annual premium without affecting the policy's value.
- Opting for Room Rent Limit: Limiting room rents can also aid in cost-cutting. If the policy has a 1% room rent limit on a 10 lakh cover, it means the insurer will pay a maximum of INR 10,000 per day for the room. This prevents the insured from choosing overly expensive hospital rooms, which can lead to proportionately increased treatment costs.
- Integrating Wellness Rewards: Loop's policies encourage wellness activities, offering rewards that can be used to offset costs or enhance coverage. For example, an employee could earn points for regular health check-ups or maintain an active lifestyle, which could be used to reduce the premium or increase the sum insured.
2. Prioritizing Preventive Care with Loop
Emphasizing preventive care is essential for maintaining health and lowering health insurance premiums.
Loop is well-positioned to provide a comprehensive suite of preventive care measures that are instrumental in achieving this goal.
- Active Lifestyle & Balanced Diet: Loop's app offers resources and guidelines to foster healthier lifestyle habits, such as regular physical activity and a balanced diet. These measures help to prevent chronic diseases, resulting in fewer claims and reduced healthcare costs.
- 24x7 Access to Medical Advisors & Doctor Consultations: Loop's preventive care strategy is amplified by the ready availability of family doctors. Much like having a personal physician in your family, Loop's medical advisors are familiar with your health history and are a text or call away, offering immediate medical advice.
For instance, a Loop member, Rohit, benefited immensely from this service. He began experiencing early signs of a heart condition, and his Loop medical advisor, aware of Rohit's family history of heart disease, recommended immediate medical intervention. This timely advice helped prevent a potential hospitalization.
- Regular Check-ups & Health Screenings: Loop emphasizes the importance of routine health screenings and facilitates easy access to these. Early detection of potential health issues means less expensive treatments in the future and a healthier workforce. Members can even avail up to 20% discounts at renowned health check-up clinics.
- Mental Health & Regular Wellness Sessions: Loop underscores the importance of mental health in a comprehensive healthcare strategy. Stress management resources, mindfulness exercises, and access to mental health consultations are just a click away on the Loop app. Regular wellness sessions promote mental well-being among employees, which is more crucial than ever in today's high-stress work environment.
3. Choosing the Right Hospital with Loop
Identifying the right hospital in times of medical emergencies is crucial, and this process is significantly simplified with Loop's offerings. Loop's medical advisors, akin to having a family doctor, guide employees to make informed decisions, leading to smoother claims and quality care.
- Understanding Your Needs: Loop's medical advisors can help you identify hospitals that specialize in treating specific health conditions. For instance, if an employee named Sunita needs a knee replacement surgery, her Loop advisor, knowing her medical history and policy details, can guide her to an orthopedic specialty hospital in the network.
- Checking Hospital Accreditations: Loop's network comprises accredited hospitals ensuring quality care. Your Loop advisor can verify accreditations and guide you to hospitals maintaining high standards of care.
- Location and Hospital Performance: Proximity to quality healthcare facilities can impact outcomes significantly. Loop advisors can help locate nearby quality hospitals and provide performance metrics to ensure optimal care.
- Aligning with Your Insurance Network: Loop aids in selecting hospitals within your insurer's network, preventing high out-of-pocket expenses. For example, Sunita's Loop advisor can guide her to an in-network hospital, ensuring her claim process is smooth and costs are minimized.
- Valuing Patient Experiences and Consulting Your Primary Care Doctor: Loop places great importance on patient reviews and feedback. In addition, your Loop advisor, much like a family doctor, can provide valuable guidance based on your health history.
[fs-toc-omit]Loop's Tactics Have Led to Significant Reductions in Insurance Premiums for Companies
- Flexible Policy Adaptations: Sarvatra, a fintech firm, optimized policy terms such as co-pay and deductibles, leading to considerable savings. NTEx, despite growing 4X, maintained cost efficiency, saving over Rs. 25 Lakhs in 2022-23.
- Robust Preventive Care: Loop's wellness features saved Sarvatra over Rs. 50,000 annually. NTEx, a logistics ‘unicorn,’ saw reduced ailment occurrence and increased online consultations, cutting hospitalization rates.
- Effective Hospital Routing: Knorr-Bremse, a leading manufacturer, benefited from Loop's guidance on hospital choice, reducing claim numbers and hospitalizations, and saving on consultation costs. Despite high claim ratios, premium increases were kept to a minimal 18.42%.
Loop's strategic approach to preventive care, flexibility in policy terms, and effective routing to the right hospitals has seen significant reductions in premiums for these companies. And we can replicate the same for you.
[fs-toc-omit]A Beacon in Corporate Healthcare Solutions
Navigating health insurance premiums needn't be a daunting task for CFOs. Loop, your trusted ally, provides powerful strategies to optimize insurance costs while ensuring top-notch healthcare for your workforce. By:
- Adapting Policy Terms: Strategic co-payment policy can reduce insurance premiums by up to 30%.
- Prioritizing Preventive Care: Promote a healthier workforce and lower claims through our wellness-focused app.
- Choosing the Right Hospitals: Loop's vast network enables access to the best healthcare facilities, minimizing out-of-pocket expenses.
Loop is the strategic solution every CFO needs to deliver cost-efficient, quality healthcare. Start your journey with Loop and discover substantial savings on health premiums, a healthier workforce, and a stronger bottom line.