The most critical step is to create a product that is not viewed as an annual expense. A simple way to do this would be to create a new type of bank account—a fixed deposit that provides health insurance.
Let’s call it “seated”. The account is would pay no interest, but the deposit would belong to the customer. Interest accrued would be used to buy a health insurance policy with the FD acting as a deductible.
This product would also address the complexity point. The deductible policy would also reduce the incentives for fraud and involve the customer in her care.
Over time, as the customer makes more deposits, her total cover would increase, giving better protection as she ages.
The trust deficit regarding claims would remain an issue—however, different banks could publicize their payout rates to attract deposits.
Financially, given FD rates of 6.5-7%, a customer would need to deposit 10,000 – 20,000 to generate the interest comparable to the annual premium (Rs 625- Rs 1,300) paid under the Ayushman Bharat scheme.
Given current market premiums, this amount is approximately the same as the cheapest family Arogya Sanjeevani product today.
Functionally, as the distribution channel would be a bank, it would reduce the distribution and operational costs of the insurer.
Banks are offering extra services (free teleconsults, spa packages, etc.) To attract customers to place deposits with them.
The government could create a favorable policy environment for this product: Allow contributions to the seated to be tax-deductible provide a top-up payment to insurers for sehatfds which are less than Rs 10,000Promote.
The concept of the sehatfd to drive trust and adoption in rural areas enable linkages to Ayushman Bharat where appropriate we reframe health insurance as an asset rather than an expense.
We may significantly increase penetration in India, making it a viable path to UHC. Pandemic has the importance of creating a pathway to Universal Health Coverage (UHC) in India.
Immediate payment for an uncertain gain hard to compare products: Lack of trust that claims will be paid: Over-provision of care resulting in medical cost inflation: Given the problems outlined above.
We need to create a product that: Does not have an upfront expense is similar to existing, well-understood products giving customers a scaffold to build their understanding.
Is simple, with easy-to-understand inclusions and exclusionsaligns incentives across the system.
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