Claim Ratio under National Health Protection Mission

Claim ratio is calculated as the total value of all claims paid by the company divided by the total amount of premium collected in a financial year. A claim ratio of 75-90 is usually thought to be an indicator of a robust claim settlement system by an insurer.

National health protection mission and claim ratio

  • Insurers in the National Health Protection Mission (NHPM) will have to return a share of the premium collected from the government for failing to meet a healthy claim ratio.
  • The government has told insurers that they will be under obligation to return part of the premium collected if they fall short of the 85-per cent claim ratio. For any claim ratio below 85 per cent, the insurers can keep a maximum of 15 per cent of the unclaimed premium and return the rest to the government.
  • If only 50 per cent is consumed in medical claims of the total annual premium paid to an insurance company, the insurer cannot take the entire remaining sum. It will have to return 35 per cent of the premium amount to the government at the end of the year, and take the remaining 15 per cent.
  • A decision has been taken that for a claim ratio up to 85 per cent insurance companies can keep the balance. For anything below that, they will have to return the money to the government. That way we will prevent any windfall gains for insurance companies.
  • This is to ensure that beneficiaries should get the maximum benefit, not the hospitals or insurance companies.

Under NHPM, an annual health cover of Rs 5 lakh will be provided to 10.74 crore “deprived” families as per Socio-Economic and Caste Census (SECC) data. For beneficiaries, it will be cashless at the point of use. [Indian Express]

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