Now, imagine a world where your healthcare provider and insurer are one and the same. This could become a reality thanks to Bengaluru-based private healthcare provider Narayana Health.
By establishing Narayana Health Insurance as a subsidiary, they’ve launched Aditi Insurance—a hospital-owned insurance product exclusively covering treatments within its hospital network. While coverage outside this network is limited, the plan aims to provide comprehensive care without the usual bureaucratic hurdles. Currently a pilot project, Aditi Insurance is available in five districts in Karnataka: Mysuru, Chamraj Nagar, Coorg, Mandya, and Hassan, with plans for a nationwide rollout in the coming months.
Mint brings you the lowdown.
₹1 crore coverage at ₹10,000: The real cost
Narayana Health markets Aditi Insurance as offering ₹1 crore coverage for a premium of ₹10,000. However, the actual premium may vary based on age, risk profile, and whether the plan covers an individual, multiple individuals, or a family.
According to the company’s premium illustration table, a family of four (with the oldest member aged 45) would pay ₹13,819 and ₹14,107 for Plan 1 and Plan 2, respectively. For individual coverage of each family member, the premiums rise to ₹20,454 and ₹20,898, respectively.
“While no similar product is available in the market, we can compare it with ₹5 lakh base premium, along with a super top-up plan totalling ₹1 crore coverage. Such a combination is available in the market in the range of ₹10-16,000,” said Aayush Dubey, co-founder and head of research at beshak.org.
The headline ₹1 crore coverage applies only to surgical treatments, while non-surgical medical treatments are capped at ₹5 lakh. Both plans have a daily deductible of ₹2,000 for non-surgical treatments, with Plan 2 offering no deductible on surgical procedures. For instance, if a patient incurs ₹2 lakh in surgical costs over a five-day hospitalization, Plan 1 requires the policyholder to pay ₹10,000 out-of-pocket, whereas Plan 2 covers the full amount.
Eligibility and benefits
Most insurance plans impose a waiting period of 15-30 days during which no coverage is provided, except in cases of accidental hospitalization. Additionally, specific diseases often come with their own waiting periods, and pre-existing conditions typically require a waiting period of 2-3 years.
Aditi Insurance, offered by Narayana Health, stands out with its zero waiting period for all diseases, including specific illnesses. Also, this plan is open to anyone willing to undergo a mandatory, free pre-policy medical check-up. However, for pre-existing conditions identified during the check-up or self-declared, there could be a waiting period of up to three years, depending on the assessed risk.
Coverage limitations and exclusions
Aditi Insurance restricts day-care treatment coverage to 280 specified treatments, compared to the more extensive coverage provided by comprehensive health plans.
“Most comprehensive health insurance plans usually cover all daycare treatments, while some cover around 500 treatments. However, Aditi Insurance has listed only 280 treatments,” as per Dubey of beshak.org.
Another key limitation is room type coverage—only general ward stays are fully covered. If a policyholder opts for a higher category room, the insurer will only cover a pro-rated portion of the total expenses based on general ward rates, according to the company’s policy document.
Coverage at non-network health providers will only be considered in emergency cases, when treatment is unavailable at a Narayana Health facility, or if the insured person is in a location where the Narayana Health Network is not accessible due to travel or relocation.
However, a 10% co-payment will be required in all scenarios if the policyholder fails to notify the insurance company 48 hours prior to admission or within 24 hours after admission, as applicable. This means the policyholder must cover 10% of the medical bill if they do not inform the insurer within the stipulated time.
Is Aditi Insurance right for you?
It is generally recommended to purchase a comprehensive health plan without restrictions or room rent limits. While Aditi Insurance has several restrictions, limited features, and room rent limits, it offers notable advantages such as zero waiting periods, free annual health check-ups, consumables coverage, and higher coverage for surgical treatments. These positives can be beneficial for policyholders.
“Dr. Devi Shetty, founder of Narayana Health, has made the plan affordable for the missing middle who may not be eligible for Ayushman Bharat but cannot afford other plans either,” said Hari Radhakrishnan, expert member of Insurance Brokers Association of India. The premium is notably lower than similar products from traditional health insurers, he said.
The future
The success of Aditi Insurance could pave the way for more hospitals to offer similar plans.
Radhakrishnan explained that, unlike traditional insurance companies, hospital-owned insurance companies can control both costs and treatment outcomes, thereby avoiding inherent conflicts of interest between insurers and providers. He noted that while policyholders might have limited choices for hospitalization within network hospitals (unless referrals to other tie-up hospitals are allowed), they benefit from lower premiums.
“The success of this product depends largely on (1) scale and (2) delivery of the quality patient outcomes. If that can be achieved, it can be disruptive for the traditional insurance companies,” he added.
In the US, models like this have found success with companies such as Kaiser Permanente and Blue Cross Blue Shield.
Mint take
Aditi Insurance from Narayana Health Insurance is a pilot project targeting the middle-class population. Among the positives, it offers higher coverage of ₹1 crore for surgical procedures while maintaining a base premium at ₹5 lakh, which is typically not possible in low-premium plans. However, coverage outside the Narayana network is severely limited. A comprehensive plan with fewer restrictions, albeit at a higher premium, could make it more appealing to a larger audience, providing the scale needed for hospital-owned insurance plans to gain popularity.