It all starts with health. This is a phrase we have all said more than once in our lives. Any health problem we experience, from a mild headache to serious health complaints, affects our quality of life. Being unable to continue our daily lives comfortably is both physically and psychologically exhausting. Fast recovery is only possible through quality and timely health care.
Serious health problems can drain every available resource, and even more. The financial burden of treatment and recovery after a sudden illness or accident is increasing every day. Health insurance is an important source of support for such unexpected situations.
In previous posts, I mentioned that health insurances are on a serious rise, just like other insurance categories, due to increasing costs and damages. Among the recommendations was for organizations that have health insurance for their employees to triple their budgets.
The result has been as expected; premium increases are shocking policyholders. In addition to individual risk factors such as prior health status, age and use of the policy, the costs facing the industry have literally sent premiums skyrocketing.
Medical inflation was 87% in 2022, according to TSB (Insurance Association of Türkiye) data, despite the increase in premium production, the sector's claims ratio was 84% as of June 2022. Although the premium production in health insurances, which was 10 Billion in November 2021, reached 24 Billion TL at the end of November 2022, the real change is 19.4% and the Technical Profit is below 1 Billion TL. Considering the claims paid by insurance companies in the second 6 months, it is not difficult to foresee where the sector's pricing will head with increasing medical inflation and ongoing indemnity liabilities. In periods like these, where premiums have risen so much and will continue to rise, health insurers have to carry out meticulous risk and cost control (Although we do not feel it, we can guess that there are serious negotiations with partner institutions behind the scenes).
Insurance companies have entered another period of unforeseen cost increases. The sad part of the situation is that while renewals in corporate health insurances somehow continue with negotiations, renewals of individual policies have slowed down.
So what can organizations and individuals do?
Entitlements and employee satisfaction targets are a must for HR departments. The recent increase in the minimum wage will put pressure on organizations' wage policies, and increases in fringe benefits will be added on top. Travel/meal fees will also be affected. Organizations have to face very serious insurance budgets. Most companies are trying to maintain their current plans.
For individual policyholders, the situation is more challenging. I would like to share the experience of a friend of mine who recently left his job during the transition to personal health insurance.
They received an indicative offer from another company for the family. The health insurance premium for a family of 3 was 117,000 TL. They have to continue to receive this coverage with outpatient and inpatient treatment, naturally they felt the need to look for other alternatives due to the premium exceeding 10.000 TL per month. And then what happened?
High premiums aside, the processes of insurance companies really require patience. If you want to get an alternative offer to existing insurer, first of all, your transition information must be submitted. The period usually given for transmission of transition information is 7 days, and in practice, we see that insurance companies use this period to the fullest. The insured has to wait for these 7 days to take out a new policy. We have moved this period forward with a little bit of goodwill.
Then the risk assessment of the insurance company to which the transition information was submitted began. This process is also particularly troublesome because individuals who have been policyholders for many years are subjected to exceptions or limits, and various tests and analyzes are requested, even if they have been insured for many years. Of course, they are not expected to provide coverage blindly, but these processes and demands are sometimes so time-consuming, exhausting and costly that the insured is forced to make decisions such as whether to have tests, negotiate, evaluate alternative plans (if they are offered) in a very short time. Even with discounts such as no-claims discount and special discounts, it is getting more and more difficult to be insured with premiums that are 2 times higher than the previous year. Moreover, the offers are almost daily, and another premium can be offered the next day.
The uninsured status continued throughout the decision-making process, during which issues such as the submission of the offer, transfer or revision of rights were discussed (unless you are staying with the same company). Although the insured, who will be paying quite high premiums anyway, takes action in advance to avoid being uninsured, the processes of insurance companies make this almost impossible (I experienced a similar situation with my own policy, it took more than 15 days to be reinsured after leaving the group policy. In the meantime, I got Covid, which I ran away from for 3 years, fortunately I survived it lightly, but I could have been hospitalized, I can't imagine the bill). The family I mentioned had to decide on a plan that they were not very comfortable with in their current company in order not to be uninsured any longer.
Health insurance is not a luxury, it is a basic requirement; the rise in medical inflation is obvious, and the high cost of medicines and treatment is common knowledge. Even if the increase in their incomes falls short of all these, the majority of insured people are ready to allocate serious budgets to maintain their insurance. Although the approach and working logic of health insurance companies in terms of pricing and service are comprehensive, speeding up the bidding process in a way that does not leave anyone uninsured will really ease everyone's mind.
Healthcare is one of the basic services that the state should provide for its citizens. Although the huge investments regarding health care in recent years are commendable, factors such as the difficulties in finding specialist physicians and medicines, the problems in accessing health services frequently mentioned in the media, changing health problems, the burden of health institutions, and supply problems encourage the use of private insurance.
Considering the income distribution, there is a certain segment of the population with a certain degree of purchasing power (they are also struggling). It seems that the sector needs to come up with solutions other than increasing premiums in order to expand its pie. My observation for many years is that insurance companies have been in the market with the same products for years, except for contracted networks, technological investments in claims processes and accelerated provisioning processes.
The shining star of recent years has been Complementary Health (TSS-CHI), and many individuals and institutions have become insured with Complementary Health Insurance. Unfortunately, CHI premiums are not what they used to be. Their costs are now quite high, and CHI partner institutions may not be in line with the treatment needs and expectations of every insured person. (This year, since private health premiums are very high, I decided to take on the costs of planned examinations and tests myself and decided to continue with two separate insurance programs for my family consisting of CHI and Inpatient Treatment Only)
Online-video health services, which have been introduced into our lives with the pandemic, are convenient in terms of time and cost, and although they are not applicable for every health problem, they are useful in terms of controlling costs by deciding on the necessary procedures and analyzes for control, counseling, guidance, diagnosis in advance.
Critical Illness Insurance, which can be taken out for more affordable premiums, is an important financial support insurance that pays a lump sum to the policyholder when one of the diseases included in the policy is contracted. I had this policy from the same insurance company for many years, and after a while, the company designed and promoted another policy that comes into effect as a result of critical illnesses, this time specific to women, and I decided to take it out. Just as I was about to make the payment, I was informed that there was a 3-month waiting period. Although this is an acceptable request for first-time policyholders, I asked them to remove this waiting period because it seemed unreasonable to impose a waiting period for women-specific cancer when all kinds of cancers were already covered in the existing policy, and when they said they could not, I gave up on both policies. I did not follow up afterwards, I hope that important details such as these are now handled more carefully.
Another option is Micro Health Insurance (MHI), a type of micro insurance that can be defined as “protecting low-income individuals against financial risk in return for a premium determined according to the probability and cost of the risk.” These mini-comprehensive policies, which are especially widespread in developing countries and planned for low-income individuals, may be available in the future.
I would like to draw your attention to the not-so-understood concept of Wellness - “A state of complete physical, mental and social well-being, not just protection from diseases and germs.” Especially the younger generation is taking this issue seriously.
Health insurance companies' investments and support for programs that promote "Physical and Spiritual Wellbeing" by focusing on the young generation as the policyholders of the future may be more on the agenda. Products combining health insurance and wellness methods are already available to policyholders around the world. In addition to improving health, wellness programs provide a healthier portfolio of policyholders with a lower likelihood of future claims by enabling insurance companies to transfer their savings back to policyholders through discounted premiums or rewards. There is no obstacle for health insurers in Turkey to take a step back from their tiring and busy commercial agendas, where they are constantly putting out fires, and think about the long-term prospects and add wellness services to their coverage.
Having had health insurance for more than 25 years, I am one of those who say that I don't need it, but I must have it. With premiums increasing day by day and conditions changing, the possibility of not being able to afford it one day is valid for all of us. I wish that this precious assurance for quality and effective healthcare, which is a fundamental human right, reaches more people with the cooperation of the state and the private sector.
I wish everyone a healthy day.
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