Social Security Is The Need Of The Hour For Developing Countries

Social Security is the need of the hour for Developing Countries

Social Security • Social security systems ensure the minimum level of living to the needy by public assistance, and they also promote public health and social welfare.

Social Security systems • They play three roles : • 1) Deal with factors that cause needy circumstances 2) Minimum level of living 3) Promote public health and social welfare.

Social Security in foreign countries • United States :

Income Security. Funded by tax

revenues. The law, however, provides for unemployment insurance, health services, human services with people with disabilities, medical services for the elderly and medical assistance in addition to pension insurance.

Social security in foreign countries

• France : Sickness insurance and old age insurance. • United Kingdom : Income security such as pension and child allowance.

Social Security in India • India had an effective, economic and emotional security in joint families, crafts communities and guilds, customs & rites of individuals, and panchayats. However, now the joint family system is breaking to nuclear families thus requiring a new framework for social security.

• India being a Social, Democratic Republic it is the duty of the state to provide for social security schemes. A Socialist State is one that accepts the responsibility for providing and ensuring Social security to all its citizens without discrimination.

Social Security in India (contd..) • Social Security in India would require a) Minimum employment scheme b) Health insurance c) Maternity insurance d) Pension e) Children’s education f) Life insurance g) General insurance like cattle insurance.

• The working population in India can be divided into 2. Organized sector comprising of Government Sector, Public Sector and Private Organized sector 3. Unorganized Sector

• The Organized Sector has benefits like Gratuity, PF and pension. Hence does not require subsidy from the Government. • The BPL in the Unorganized Sector would require Subsidy from the government. • Total Workforce (1999-2000) 393.21 million - Organized Sector

38.93 million

- Balance under Unorganized Sector. The total Outlay required for Providing Social Security to the Unorganized Sector would be beyond the budgetary provisions of the Government also.

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Hence it is suggested that Social Security be divided into 3 levels

2. A basic level where the State bears Primary responsibility for providing minimum level of Social Security 3. Beneficiary makes a contribution to the cost 4. Schemes that confer additional benefit beyond the basic level

• A family which is living Below Poverty Line gets most affected if the breadwinner expires or if somebody in the family has to be hospitalized for some major illness.

• LIC realizes its Social Responsibility. It created a Social Security Fund in the year 1988-89 for subsidizing the premium for insurance cover to weaker sections of the Society. As on 31.3.2006 the size of the fund was 808.25 crores.

• Janashree Bima Yojana was launched on 10.8.2000 to provide life insurance protection to the rural and urban poor persons below poverty line and marginally above poverty line at low cost. • It has an add on benefit in the form of Shiksha Sahayog Yojana where Scholarships are given to the children of the members of Janashree Bima Yojana

Eligibility • Member should normally be the head of the family • Persons below or marginally above poverty line •

between age 18 and 59

• Minimum group size 25 • 44 occupations have been identified so far.

Revised Benefits From 15.08.2006 • Natural death: Rs.30,000 • Accident benefit – On death: Rs. 75000 /- to the nominee – Total permanent disability: Rs.75000/- to the beneficiary – Partial permanent disability: Rs.37500/- to the beneficiary.

Premium • Rs. 200/- per annum out of which – Rs.100/- by member/ nodal agency – Rs.100/- from social   security fund maintained by LIC Of India

Nodal Agency •

Shall Mean 1. Panchayats 2. NGO’s 3.Self Help Groups 4. Any Other Institutionalised Arrangements To Collect Premium

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It Will Act For And On Behalf Of The Insured Members

 

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To obtain application cum nomination form

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Incorporate the details in register of members and copy to be given to LIC of India

Work of nodal agency • 50% of the premium + proposal papers + list of members. • Verification of age.  

Reimbursement of expenses to NGO’s for introducing JBY • FOR N.B. – Minimum Members Should Be 250 – For The First 2500 Lives Rs. 4 Per Member – Balance Rs. 2 Per Member – Maximum Rs. 50,000/-

• FOR RENEWAL   – Group Size above 250 – Rs. 2/- Per Member – Maximum of Rs.10,000

Claims • Documents to be enclosed for claim • Claim-cum-discharge form, attested copy of the death certificate • For accidental claims 1) Post Mortem Report 2) Copy of FIR 3) Police Inquest Report •

LIC settles the claims by sending account payee cheque favouring the Banker Of The Beneficiary /Nominee

Shiksha Sahayog Yojana

Eligibility • Students studying in 9th to 12th standards (Including ITI Courses). • Parents Covered Under Janashree Bima Yojana. • If student fails and is detained in the same standard, he will not be eligible for scholarship for the next year in the same standard.

Benefits • Scholarship of Rs. 300/- per quarter per child will be paid for a maximum period of four years. • For student to become eligible for scholarship the parent should have been covered under JBY. • Benefits restricted to two children per family.

Identification Of Beneficiaries • Nodal Agency should identify the students. • The Nodal Agency should guide the members to fill up the application forms for this purpose. • The list of beneficiary students along with the details should then be forwarded to the concerned P&GS unit.

Administration • Scheme will be administered by LIC • Scholarship will be disbursed to the beneficiary through the Nodal Agency. • Nodal Agency has to furnish LIC with the necessary data of the eligible students. • Nodal Agencies are required to maintain records and submit certificates / details of utilization of scholarships quarterly to LIC.

Our Achievement • There are 4.62 crore families living below poverty line in Inida. • We have covered more than 1.5 crores lives under social security schemes. • However, it is a long road ahead yet to be travelled.

LIC’s MICROINSURANCE PRODUCT JEEVAN MADHUR

JEEVAN MADHUR • SIMPLE SAVINGS RELATED LIFE INSURANCE PLAN • PREMIUM MODE ----WEEKLY / FORTNIGHTLY / MONTHLY /QUARTERLY / HALF- YEARLY / YEARLY • SUM ASSURED BETWEEN Rs.5,000/- AND Rs.30,000/-

BENEFITS • MATURITY BENEFIT : Payment of the Maturity Sum Assured along with vested bonuses, if any. • DEATH BENEFIT : Payment of an amount equal to total premiums payable during the entire term of the policy along with vested bonus, if any. • ACCIDENTAL BENEFIT : Equal to Death Benefit Sum Assured. • AUTO COVER FACILITY AVAILABLE.

Health Care in India

Source :NIA Seminar & Insurance news

• The total value of the health sector US$ 34 Billion, 6% of GDP, one of the highest in Asia • • • •

Of this 15% publicly financed, 4% social insurance, 1% private insurance remaining 80% ---out of pocket as user-fees (75% of which goes to the private sector)

• 2/3rd users ----out-of-pocket • 90% ---- poorest sections

Health Insurance in India • • • • • •

11 non-life Insurance companies including 4 PSUs regulated by Govt. ( IRDA) 25 licensed TPA’s Total premium recorded as on March 2005: Rs.1300 Cr. ( $ 260 million) Indian Health Insurance Industry grew at the rate of 27% ( last fiscal). Current population covered by some form of health insurance is 12% out of which mediclaim is 1.4 %. How does the Health Insurance Industry looks today

Traditional Insurance (Mediclaim)

1%

ESIS & CGHS

3%

Railways

1%

Social /Mandatory Insurance

4%

NGO/CBHI (Self funded)

3%

Source :NIA Seminar & Insurance

Experience Hodgepodge • Though the health-care insurance industry was worth Rs.5,000crore in FY00-01, a growth of more than 200% over these years. • the lapse ratio has not improved around 25-30% of mediclaim polices lapse in a year. • the total number of non-life insurance rejected claim complaints filed, mediclaim accounts for about 65-70% • In case of rejected claims, companies need interface with the customer directly instead of the customer having to deal with third party administrator

Source :NIA Seminar & Insurance news

Cont… • The industry estimates no specific reasons for the non-renewals, • Difficulties in making health insurance more accessible to customers • the grievances due to large numbers of rejected claims • lack of services cause customers to default on payments or •

switch to other companies

• Claims in urban areas is 40% higher than semi urban areas • As the government provides highly subsidized medical facilities, a majority of the people are not very keen on investing in health care.

Pros & Cons of TPA’s Purpose

• Electronic maintenance of the enrollment database • Arrangement for the Network Hospital for extension of cash less treatment. • Issuance of the card • Issuance of Authorization for all the admission occurring at the Network Hospital. • Claim Processing and Administration services till the settlement. • Call Center services through National Toll Free No • Generation of periodic MIS on Premiums, Claims and Utilization.

Source :NIA Seminar & Insurance news

Results • Impersonal dealing with the patients • Unnecessary interference felt by doctors on their working ways • Incase of claim rejection TPA’s taken to as “the bad man” • Nexus between TPA’s and local hospitals • Rationalized medical fee structure remained a dream • Standard medical practices remained a dream As the cost needed by TPAs for rendering the promised services in the current health infrastructure would be too high to be afforded under the health plans in the market

The market & the people •

Setting up of Health Insurance Regulatory Authority

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Standalone Health Insurance companies should be promoted

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Area-wise Standard medical and hospital charges

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standard medical practices should be promoted

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the combined effort of state governments and the companies under the guidance of the regulator and the central government to be harmonized.

The Provider •

Network of Quality care providers in tune with health insurance companies’ interest

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Accommodate & promote alternative medicines and such practices so that qualified doctors take to it

(Based on www.ahip.org, www.kaiserpermanente.com)

Road Ahead Principle – Quality, Access and Affordability

* QUALITY -

for health care, and Insurance services.

* ACCESS – for all Indians through public and private coverage Source : AHIP Board of directors report

The market & the people •

Setting up of Health Insurance Regulatory Authority

•

Standalone Health Insurance companies should be promoted

•

Area-wise Standard medical and hospital charges

•

standard medical practices should be promoted

•

the combined effort of state governments and the companies under the guidance of the regulator and the central government to be harmonized.

The Provider •

Network of Quality care providers in tune with health insurance companies’ interest

•

Accommodate & promote alternative medicines and such practices so that qualified doctors take to it

(Based on www.ahip.org, www.kaiserpermanente.com)

Conti….. The Insurer Product Designing •

Data to be classified and made heterogenic through Actuarially recommended medical underwriting.

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Proper database is to be maintained.

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Wide range of products as per consumer needs should be provided.

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Different health products for different categories of diseases & regions.

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Providers should be involved in product designing.

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Formulating proper outpatient strategies along with pharmacy policy

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Delimiting exclusions and pre-existing medical conditions

(Based on www.ahip.org, www.kaiserpermanente.com)

Conti…. Marketing • • •

Incentive to Hospitals and agents for promoting health products. Creating awareness among people of target market Insuring through various organized sectors such as municipalities, state governments, private and public sector companies, gram panchayats, schools and colleges

Claims • • •

Credit facility at point of service so as to reduce uncertainty concerning the time frame within which reimbursement will take place. Greater efficiency in the processing of claims through rationalized fee structure & standard practices stipulated by the regulator and given way through different products. Proper claim administration set up. IT –network for proper data administration and claim settlement.

Vigilance • •

Accountability and transparency of the health company practices & providers Continuous Morbidity Investigation Bureau (CMIB) to function within the company in order to continuously monitor the changes required in the products.

(Based on www.ahip.org, www.ahip.org, www.kaiserpermanente.com) www.kaiserpermanente.com)

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