Health insurance to begin as a tough sell
A Health insurance plan set out by the government is scheduled to start next month, though initial uptake may be show. Private insurers say the one-year test phase will be spent identifying whether it is viable and convincing consumers of its benefit.
The long-promised health insurance program was introduced earlier this month by deputy finance minister U Maung Maung Thein, and is slated to start on July 1. The program has relatively rigid conditions, and private insurers say the primary challenge will be to convince potential users that it is worthwhile.
“We need to explain it to people, so they can gain knowledge. We can persuade people to insure if they know the benefits of insurance,” said U Aung Soe Oo, general manager at IKBZ. “If they insure, they will cover their losses.”
Private insurers have been allowed in the market since 2013, when state-owned Myanma Insurance’s monopoly came to an end. There are currently 11 private insurers in the market, along with Myanma Insurance.
The health insurance program unveiled by the government has a limited degree of flexibility. People between the ages of six and 65 can purchase units of insurance for K50,000, up to five units. Each unit entitles the policy holder up to K15,000 a day for hospital treatment per unit of insurance that has been purchased, for a maximum of 30 days. In the case of accidental death the holder receives K1 million.
The plan is the same for all 12 insurance companies, and much of the plan, including application forms, is standardised by the Insurance Business Regulatory Board.
U Aung Soe Oo said there had been significant discussions leading up the formulation of the plan for health insurance over how much flexibility to introduce. The plan’s drafters initially discussed different premiums for three different categories of people – older people, adults over 20, and children – but decided to take a simpler route to help people understand what they are purchasing.
“We made many discussions about how to cover policy holders for surgery, and how to claim hospital costs,” he said. “But eventually, we chose the easiest and clearest way, because it’s the first time we’ve started health insurance, and the plan should be acceptable to all people.”
Those claiming hospital costs will need to show they have been admitted to hospitals and clinics with proper licences.
U Aung Soe Oo said nearly all the private insurance companies are going to gradually introduce health insurance. Other new products such as marine cargo insurance will also likely be introduced by the regulator in the future.
IBKZ is preparing the groundwork for the July 1 launch of health insurance. It hosted a meeting with some of its 200 agents on June 17 to inform them about how the new program will work.
U Aung Soe Oo said insurance agents are important conduits for an insurance firm’s products. They are the people out selling products, and must understand what they are selling.
“We wanted to explain well to insurance agents what is involved with health insurance,” he said of the decision to hold the June 17 seminar.
The firm, part of U Aung Ko Win’s KBZ conglomerate, has 12 branch offices and two more on the way, including one in Meiktila. IKBZ plans to begin offering health insurance simultaneously across its network on July 1.
IKBZ is not the only insurance company aiming to begin selling health insurance. Others are similarly preparing their branches to offer the product.
Some experts say there may be a challenge in the health insurance scheme that those most at risk of health problems, such as the elderly, will be the most likely to apply for coverage, straining the premium pool.
Daw Sein Sein Than, principal officer with Capital Life Insurance, there is a need to persuade parents to insure for their children as well, as if the numbers of older people buying insurance is too high, it may result in an imbalance.
“Moreover, we need to listen to our customers’ voices,” she said.
Daw Sein Sein Than also said the company will be continually assessing the scheme. “It is also required that we report to the regulator what is happening, as this is a one-year test.”
Leading up to the plan, there had been negotiation over premiums, and calculations for medical fees, before arriving at a program that may work.
Capital Life has branch offices in Nay Pyi Taw and Mandalay, but will initially begin sales in Yangon before selling health insurance in other cities.
Translated by Emoon and Khant Lin Oo
(Quote from Myanmar times online website on 22 June 2015)