Health Insurance And Third Party Administrators In India


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HEALTH INSURANCE AND THIRD PARTY ADMINISTRATORS IN INDIA:
AWARENESS AND PERCEPTION OF POLICY HOLDERS
COMPILED AND COLLATED BY: DR. PRABHJOT KAUR DILAWARI BDS., MHA. ASSISTANT PROFESSOR GURU NANAK DEV UNIVERSITY, AMRITSAR

 The ILO defines Health Insurance as “the reduction or elimination of the uncertain risk of loss for the individual or household by combining a larger number of similarly exposed individuals or households who are included in a common fund that makes good the loss caused to any one member” (ILO, 1996).
 Third party administrators was introduced through the notification on TPA Health Services Regulation 2001 by IRDA (Insurance Regulatory and Development Authority of India )

 Increase in communicable and non communicable diseases,
 Low public spending on health care,  High out of pocket expenses,  Poor public health institutes infrastructure,  Shortage of drugs and equipment supply in public
healthcare setup,  Advent of corporate hospitals,  Costly line of treatment in private hospitals due to
highly qualified and highly paid doctors

 Most of the population cannot afford spending a ransom on getting themselves treated in case of an accident or disease, in one go.
 Hence the concept of health insurance offers relief to community at large by pooling in risks and funds among similarly exposed people , thereby protecting them from severe indebtation at the time of illness or accident.

 The World Health Organisation has recommended that governments must spend at least 5 per cent of GDP on the health sector.
 India spends 6 per cent of its GDP on health. Out of that the share of government is less than 2 percent.
 Government allocations in health sector have been declining over the years from 1.3 per cent of GDP in 1990 to 0.9 per cent in 1999 according to National Health Policy, 2001.
 Current health expenditure in India is estimated to be around Rs 1,030 billion.
 Though the demand for healthcare is increasing owing to population pressure, the government is finding it very difficult to maintain its health facilities.

 The Insurance Regulatory and Development Authority of India (IRDA) defines TPA as a Third Party Administrator who, for the time being, is licensed by the Authority, and is engaged, for a fee or remuneration, in the agreement with an insurance company, for the provision of health services.
 A Third Party Administrator is an organization which processes claims or provides cashless facilities as a separate entity. It is seen as an outsourcing of claim processing.
 Their basic role is to function as an intermediary between insured and insurer and facilitate the cashless service of the insurance.
 For this service they are paid a fixed 5.5 % of insurance premiums.

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Records of medical insurance policies of an insurer will be transferred to the TPA once the insurance company has given
the business to a TPA.
The TPA will issue identity cards to all policyholders, which they have to show to the hospital authorities before availing any hospitalization
services
In case of a claim, policy holder has to inform the TPA on a 24-hour toll-free line provided by the latter.

TPA issues an authorization letter to
the hospital for treatment, and will pay for the treatment.
On informing the TPA, policyholder will be directed to a hospital
where the TPA has a tied up arrangement (cashless) or join any other hospital
of their choice (reimbursement)

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Health Insurance And Third Party Administrators In India