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Originally posted on 10.08.2018Ā SYNOPSISĀ :Ā The article isĀ about aĀ recent developmentĀ Ā in whichĀ Ā insurance companyĀ Ā Ā which wasĀ hithertoĀ insuringĀ health ofĀ retiree bankersĀ , through aĀ groupĀ insuranceĀ policyĀ ,Ā is said to haveĀ proposed increase in the cost up toĀ 150 % .Ā Ā Elderly bankersĀ Ā with meagerĀ pensionsĀ Ā areĀ unable to meet the costĀ Ā and are perplexed not knowing what to do .Ā Ā In this circumstance ,Ā the articleĀ looks in to possibleĀ solutions to the problem .Ā HEALTH INSURANCE OPTIONS FOR RETIRED BANKERS
Ā PREAMBLEĀ : Life expectancyĀ is going upĀ due toĀ availability ofĀ better medical careĀ Ā and number of citizens asĀ percentage ofĀ population and in absolute numbers is increasing rapidly .Ā Hence naturallyĀ , more and moreĀ retirees are adding upĀ Ā to the society .Ā Bankers are no exceptionĀ .Ā Ā
Ā Ā Result of the longevityĀ of the citizensĀ isĀ society has now to bear more and more cost ofĀ maintenance ofĀ senior citizensĀ Ā includingĀ their medical welfareĀ Ā . Recently I read that the total pension bill of the government has exceeded its salary cost for entireĀ present work force .Ā Ā There are certain sectors like banksĀ Ā Ā who also offer pensions to their retireesĀ .Ā Others have to depend up onĀ theirĀ Ā savingsĀ and on the younger family members who are earning nowĀ Ā .Ā Ā Most of the time pensionsĀ paid remain static as aĀ percentage ofĀ their last earned salaries andĀ with increase in cost of livelihoodĀ due to inflation , retirees have to struggleĀ to meet the two endsĀ .Ā Ā Those people who live longer after retirementĀ have to liveĀ Ā with lesser amount of pension .Ā Ā Struggles are going onĀ for updation of pension so thatĀ Ā those retired long backĀ canĀ also get a decent pension to live onĀ .Ā āĀ Ā Life expectancy is going up and up dueĀ to better health care available nowĀ Ā and the medical support is helping the senior citizensĀ to live longerĀ Ā . Flip side is cost of medical support is alarmingly increasing over the years .Ā As one is unable to bearĀ the medical costĀ on his ownĀ Ā forĀ neededĀ medical helpĀ due toĀ desease , old age or accidentĀ Ā , health insurance is playing an important roleĀ Ā inĀ making affordableĀ theĀ medical cost . MainĀ principal of the insuranceĀ Ā thatĀ premiaĀ paid byĀ a group of insured will take care of medical costĀ of a member who needsĀ support .Ā Ā Of course , insurance company is expected to keep a margin for the services renderedĀ .Ā ā
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Ā Ā Ā Ā Ā Ā Ā HEALTH INSURANCE PLANSĀ FOR SENIOR CITIZENSĀ Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā WITH OR WITHOUT ENTRY AGE RESTRICTIONĀ Ā TOĀ READ THE ARTICLEĀ Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā Ā CLICK HEREĀ ā
CASE OFĀ Ā BANKERSĀ :Ā Ā Ā In a settlementĀ Ā effective from November 2012 betweenĀ banks and their employeesĀ , IBAĀ agreed to make arrangementĀ Ā for health insurance ofĀ employeesĀ including officers and also retireesĀ Ā . Insurance was arranged through a public sector insurerĀ . Cost of the insurance for serving employeesĀ / officers were borneĀ by the respective banksĀ Ā and retirees were askedĀ to pay on their own .Ā SomeĀ membersĀ banks subsidizedĀ cost to an extent initiallyĀ Ā .Ā The insurance company found thatĀ Ā they were incurring lossĀ due to this group policy with claimsĀ far exceeding the premium collected . Second yearĀ Ā premia was enhancedĀ Ā by the insurance companyĀ Ā with a hope that the new pricing would makeĀ the scheme profitableĀ . UnfortunatelyĀ Ā insurance company has advisedĀ Ā huge lossĀ for them in the next year also.Ā NowĀ aĀ Ā new scheme has been proposed by the insurance companyĀ Ā , advisingĀ around 110 %Ā Ā increaseĀ of premiumĀ for the policyĀ Ā that does not cover domiciliaryĀ treatment andĀ 140 % increaseĀ for a policy withĀ Ā Ā coverĀ Ā for domiciliaryĀ treatmentĀ Ā .Ā Ā The schedule ofĀ newĀ premiumĀ proposedĀ causing heartburn for theĀ Ā retireesĀ asĀ burden of the insuranceĀ Ā is becoming unbearable .Ā For some ,Ā cost may take away their entire incomeĀ by way of pensionĀ andĀ they may have to opt out of the scheme . Thus manyĀ senior retireesĀ may be deprived of the insuranceĀ Ā at a time when they need most .Ā
We are findingĀ lot of messages from retireesĀ expressing their anguishĀ Ā with the developmentsĀ Ā and they are blaming the insurance company involvedĀ , bank management , employee / officers unions and retirees association for the plight they are put in to itĀ Ā .Ā Ā Ā Ā ā
Many retireesĀ are unableĀ to meet the medical cost themselvesĀ due to poor pension they are gettingĀ and prospect of losing the health insurance available to them presentlyĀ is putting them jeopardy .Ā The primaryĀ reason for the present plight of the retirees is thatĀ Ā the cost of medical supportĀ has goneĀ upĀ beyond the affordability of the retireesĀ .Ā Though we can bargain with insuranceĀ companiesĀ for reduction of premium , insurance companiesĀ , being commercial companies , may not agreeĀ if the proposition isĀ loss- making one .Ā Ā RetireesĀ Ā haveĀ now to look for alternativeĀ avenues to manage the positionĀ now .Ā Ā
We understand thatĀ staff unions / associations have requested the insurance companyĀ to extendĀ the available insurance till December 2018Ā by collecting pro- rataĀ premium for the extended period .Ā Any howĀ retirees haveĀ to find suitableĀ solution to the problemĀ in the mean time . Let us explore what are theĀ options available toĀ bank retirees nowĀ ā
VARIOUSĀ WAY OUTSĀ FOR BANK RETIREESĀ Ā
1.Ā Ā To find an alternativeĀ insurance company who will agreeĀ for taking overĀ the healthĀ coverĀ on existing termsĀ 2.Ā To accept theĀ increased payment of premiumĀ of the present insurer to continueĀ to enjoyĀ the benefits of insuranceĀ .Ā 3. Agree to makeĀ lesser claimsĀ Ā on the policy and requestĀ the insurance company to go back toĀ Ā old premium structure withĀ lesserĀ insurance benefitsĀ .Ā Ā 4. RequestĀ Ā bank managementsĀ Ā to subsidizeĀ the cost ofĀ premiumĀ either on their own or from pension fundsĀ Ā so that cost of insurance becomesĀ Ā affordable .Ā 5 . Terminate theĀ insuranceĀ and go for individual covers separatelyĀ .Ā Let us examine the repercussions ofĀ Ā the individual options .Ā ā
REPERCUSSIONS OF OF INDIVIDUAL OPTIONSĀ Ā
āĀ 1. To find an alternativeĀ insurance company who will agreeĀ for taking overĀ the healthĀ coverĀ on existing terms :Ā Ā The reasonĀ forĀ Ā present insurance companyĀ Ā demanding higher premium is thatĀ Ā total claim settledĀ by themĀ Ā far exceedsĀ the total premiumĀ Ā collectedĀ Ā . If the reason is correct and validĀ ,Ā no other insurance company may come forward to accept aĀ loss-making proposition .Ā Any howĀ Ā Ā a fresh try can be given for the effortĀ .Ā ā2.Ā To accept theĀ increased payment of premiumĀ of the present insurer to continueĀ to enjoyĀ the benefits of insuranceĀ Ā :Ā In case we do not get an alternate insurer ,Ā weĀ Ā can bargain with the present insurerĀ for betterĀ termsĀ than proposed . But ultimatelyĀ we will have to fall back on theĀ present insurerĀ and accept theirĀ term and conditionsĀ Ā .Ā Ā If the premium demanded continues to be high ,Ā Ā the new schedule of premium is not affordableĀ forĀ many retireesĀ , especially for thoseĀ retiredĀ say before 15 yearsĀ .Ā Hence they may opt out of the scheme . It appears thatĀ Ā additional premium demanded by the insurance company forĀ domiciliary treatment is RsĀ 41, 793Ā &Ā RsĀ 55,721 forĀ Ā for maximum domiciliaryĀ reimbursementĀ of Rs 30,000Ā & Rs 40,000Ā respectivelyĀ Ā . If theĀ Ā information / demandĀ is correct ,Ā the demandĀ Ā isĀ ridiculous as noe one will pay higher amount to get a lower cover .Ā It is as good asĀ abandoning the domiciliaryĀ scheme .Ā Ā Many retirees who already have other health insurance policies may alsoĀ go out of the schemeĀ , being unable to bear additional burden .Ā ā Ā The onlyĀ retirees who will definitely stay back are those who are makingĀ large claims under the scheme .Ā Net resultĀ will be the reductionĀ Ā of number insured under the schemeĀ and the reduction of premium collected overall .Ā Ā Hence it willĀ not be surprising if the insurance company continues to make loss in spite ofĀ Ā huge increase in premium .Ā Ā FinallyĀ Ā Ā insurance company may opt outĀ of the scheme . A Lose-lose situation .Ā Ā 3. Agree to makeĀ lesser claimsĀ Ā on the policy and requestĀ the insurance company to go back toĀ Ā old premium structure withĀ lesserĀ insurance benefitsĀ .Ā Ā Ā IfĀ Ā reallyĀ the claims being made are more than the total premium collectedĀ Ā , no insurance company will beĀ offering the insurance incurring a loss .Ā Hence toĀ have an insurance ,Ā retirees necessarily have to reduce the claimsĀ they are makingĀ . In other words ,Ā Ā benefits available in the policy are to be curtailedĀ . SuchĀ Ā curtailment of benefits may includeĀ A.Ā Reduction of insured amountĀ B. Ceiling on bed chargesĀ Ā per dayĀ C. CeilingĀ onĀ Ā treatment charges/ consultation FeeĀ etc .Ā Ā D Restricting the types of hospitalsĀ eligible under the scheme . Ā Such a curtailmentĀ of benefitsĀ mayĀ inconvenienceĀ some retireesĀ who needĀ higher limits . FurtherĀ certain types ofĀ Ā Ā treatmentsĀ Ā for cancer / heart ailmentĀ etcĀ Ā will involveĀ Ā very highĀ chargesĀ Ā andĀ any reduction in insurance amountĀ Ā may adversely affect the retirees . HenceĀ a viaĀ media may be exploredĀ Ā with higherĀ insuranceĀ amount for certain types of ailments . Further retirees may beĀ given an optionĀ Ā original benefitsĀ Ā with payment of additional premium .Ā Ā Negotiations willĀ be neededĀ Ā with major hospitalsĀ Ā in major citiesĀ toĀ have a special lower feesĀ Ā structure for the retireesĀ Ā so thatĀ Ā overall claim will be reduced .Ā Ā For example some hospitals offer 10 % discount to senior citizens if one goes directlyĀ Ā .Ā Hospitals may not extend suchĀ discounts ifĀ one hasĀ Ā aĀ insuranceĀ policy .Ā Hence new ways may be exploredĀ to reduce the total claim , resulting in lower premium and benefiting all .Ā 4. RequestĀ Ā bank managementsĀ Ā to subsidizeĀ the cost ofĀ premiumĀ either on their own or from pension fundsĀ Ā so that cost of insurance becomesĀ Ā affordableĀ Ā :Ā In the present situationĀ where the banks are announcing huge losses quarter after quarterĀ Ā ,Ā we may not expectĀ Ā any major help from them .Ā Ā However banks can not escape from their responsibilitiesĀ Ā Ā towardsĀ theirĀ retired employees who have sacrificed their entire adult life in the service of the organization .Ā We may persuadeĀ Ā to contribute at least 3 % toĀ 5 %Ā of the pension payment towardsĀ health coverĀ Ā so that burden will be reduced on theĀ retirees . If presently banks are not ableĀ Ā to payĀ Ā directly , they may persuaded to contribute from pension funds accumulated .Ā 5 . Terminate theĀ insuranceĀ and go for individual covers separatelyĀ :Ā If none ofĀ theĀ above solution worksĀ Ā , the last way out isĀ Ā to withdrawĀ the scheme and persuadeĀ Ā the banksĀ to return to the old schemesĀ Ā wherein they were providingĀ limited coverĀ Ā for the retireesĀ for aĀ nominal fees .Ā Ā Insurance cover willĀ be drastically reduced .Ā We understand that one of the member banksĀ is planning with such a moveĀ Ā Ā .Ā Ā Though IĀ have listedĀ some of the way outs possible , the ultimate solution may lie in judicious mix of allĀ Ā the options to make scheme viableĀ Ā and create a win -winĀ Ā solution for all the stakeholders .Ā Ā We mayĀ have a solutionĀ with some increase in premiumĀ , some reduction inĀ benefitsĀ with banks chipping in some help towards their retiredĀ employeesĀ with insurance companyĀ managing the scheme efficiently with a reasonable remuneration for their services .Ā Ā Other retirees may also come out with innovative solutionsĀ Ā to find a solution .Ā ā
ANOTHER BLOG ARTICLEĀ Ā FOR RETIREESĀ Ā :
ALTERNATE INVESTMENT PLAN FOR RETIREES Ā CLICK HERE TO READ
WHAT IS THE WAY FORWARDĀ ?Ā
Ā It is my personal thought about aĀ Ā possible solutionĀ Ā we can find in whichĀ we can create a satisfactoryĀ Ā answer to the problems of all concerned .Ā Ā Ā The problems in theĀ present situationĀ areĀ 1. Loss for the insurance company under theĀ present scheme .Ā 2. Domiciliary cover proposedĀ is of no economic benefitĀ to the insured .Ā 3. Premium proposedĀ unbearable for many retirees , eating awayĀ fewĀ months of their pension .Ā Ā In solving the problem , I propose following stepsĀ Ā .Ā 1.Ā Collect correct data of claims receivedĀ & reimbursed vis a vis premium collectedĀ .Ā Ā 2.Ā Ā Ā UseĀ Ā Data AnalyticsĀ Ā to find out the nature of claimsĀ Ā and analysisĀ Ā of the distribution of claimsĀ Ā .Ā 3. Find ways toĀ Ā reduce the claimsĀ Ā and impact ofĀ each limit on the reimbursement of claim .Ā Ā Ā For exampleĀ limitingĀ bed charges to a particularĀ level may reduceĀ 5 % of the total reimbursementĀ .Ā Ā Limiting reimbursement from 100 % to 95 % may reduce aĀ 5 % claim .Ā Ā 4. WithĀ testing various limitsĀ Ā . find out the total reductionĀ in claimĀ Ā and checkĀ Ā whether the totalĀ claims come within the premium collectedĀ Ā Ā .Ā Ā If notĀ , retry with different levelsĀ ofĀ limits proposedĀ .Ā Ā In finding out the limits , we may take the schedule of existingĀ limits allowed by variousĀ insurance companiesĀ as reference and work outĀ possible limitsĀ .Ā Help from a professional Data Analytics company may be taken in this endaevourĀ .Ā Ā 5 . In caseĀ Ā if claims are still not more than the premium ,Ā Ā find theĀ quantumĀ ofĀ enhancement of premiumĀ neededĀ .Ā Ā 6. To the cost of claims , we have to necessarilyĀ a management charges incurred by the insurance companies .Ā Ā Ā Ā Ā 7. TheĀ support , if any , received from the management / pension fund willĀ reduceĀ Ā Ā to that extent premium to be collectedĀ Ā fromĀ theĀ insuredĀ 8 .Ā Ā Check with various health insuranceĀ covers available from different insurance companiesĀ to find outĀ the premium so arrivedĀ is better than that being offered for the public .Ā Ā 9 .In case any other insurance is available cheaper thanĀ Ā our worked out policy ,Ā we may directly negotiateĀ Ā with such insurers forĀ Ā Ā betterĀ terms .Ā Ā 10. If any of the retirees are ready to bear additional costĀ ,Ā policies without any limitationsĀ Ā may be tailored for themĀ .Ā Ā Any how such policies are to be cheaperĀ than the policies available in the market .Ā Ā The problem can be only solvedĀ ifĀ the insurance companyĀ . bankers , unions / associations ofĀ employees / officersĀ Ā and representatives of retireesĀ jointly sit togetherĀ Ā to find an amicableĀ win-win settlementĀ Ā withĀ Ā mutual trustĀ with a goal ofĀ achievingĀ longĀ Ā haulĀ Ā dealĀ Ā whereĀ retireesĀ Ā will haveĀ aĀ Ā peacefulĀ sleepĀ of having taken care ofĀ futureĀ medical needs and insurance companyĀ getting aĀ long time business deal .Ā ā
FINAL NOTEĀ Ā :Ā Ā Author isĀ just one of the members of theĀ retiree community with interest in the scheme like any otherĀ retiree . He is not privy to anyĀ to any officialĀ Ā data / communication /Ā Ā negotiationĀ Ā on behalf of the retirees . His knowledge is limited to whatĀ is available to anĀ ordinary member orĀ Ā highlyĀ unreliableĀ information received throughĀ social mediaĀ . HenceĀ the information /Ā Ā figuresĀ Ā quoted in the articleĀ are notĀ Ā authentic .Ā Ā The article may be taken as an attempt by ordinary memberĀ towardsĀ understandingĀ the problemsĀ faced by the community .Ā Ā ReadersĀ Ā are welcome to come out with suggestionsĀ Ā for improving on the proposals given by the authorĀ .Ā Ā ā
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Manjunathan BellurRetired DGM , Indian overseas BankĀ |