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Aetna Enters India

India’s emergent healthcare industry, which features an abundance of specialist medical facilities, an extensive network of healthcare providers and increasing demand for services, is fast becoming an attractive investment opportunity for many multinational companies. On Monday, the international arm of American health insurance powerhouse Aetna became the latest firm to enter the market through the complete acquisition of a 100 percent stake in Indian Health Organization Pvt Ltd (IHO).

The move marks Aetna International’s first foray into India and will provide the US-based health benefits company with a solid customer base of 80,000 enlisted IHO members upon which to further develop its platform in the country. Aetna will also be given access to IHO’s robust network of healthcare providers as well as the preventive care and wellness programs specially tailored to the Indian market. While the financial details of the transaction have not yet been disclosed, Aetna has intimated that they plan to retain the management and all employees at IHO. The Indian company will maintain its existing leadership structure and continue to operate as a separate business within Aetna International, reporting out to the Southeast Asia region office.

IHO is just a three-year old business, started up by two Delhi-based entrepreneurs Visham Sikand and Sunando Sen to provide medical and dental care to participating policyholders at a discount through an accredited healthcare provider network encompassing over 2,500 doctors, 500 dentists, 800 pharmacies and 300 clinics is 18 different cities across India. The company supplies a health card for an annual fee which enables clients to access diagnostic tests and health consultations at discounted rates. The annual charges for an IHO health card range from INR 1,545 (US$35) for individuals to INR 2,648 (US$60) for a one-year family plan and Rs.3,971 (US$90) for a two-year membership. The company has also unveiled a priority plan, which offer higher levels of discount for INR 3,530 (US$80) annually for single membership and Rs.4,853 (US$108) for couples.

Commenting on the acquisition of IHO, Aetna’s Managing Director for Southeast Asia, Derek Goldberg explained that their interest in the Indian healthcare marketplace was well founded. “India’s growing health care market presents tremendous opportunity. The out-of-pocket medical spend in India is more than $30 billion annually, which is more than 60% of the total health care expenditure in the country. The service offered by IHO targets that direct consumer spending on health care by providing access to primary and preventative care,” Goldberg said.

Aetna believes that combining their global expertise and resource strength with IHO’s provider network and local market insight will ultimately be of benefit to consumers, making healthcare products even more affordable and accessible in India. Goldberg added that it was important for Aetna to diversify its operations further into South Asia, stating “IHO provides Aetna with the opportunity to develop a presence in India and build out a broader provider network, serving both the local market and our expatriate members.”

Aetna International has been of the market leaders in the expatriate healthcare business, supporting over 400,000 members worldwide. Aetna recently launched a new suite of International Healthcare Plans (IHP) designed to cater to both expatriate employees and employing companies in order to make health benefits more accessible for members while abroad. India has a sizeable middle-class workforce overseas and it will become increasingly important to have an understanding of how best to provide them health benefits and security.

Visham Sikand, IHO’s co-founder and business development head, confirmed that Aetna’s involvement will be of great benefit to his company and India’s healthcare network as a whole. “As a global leader in health care, Aetna has the expertise and resources to take IHO’s business to the next level. I am excited about the prospects of making quality health care and wellness programs more affordable and accessible for consumers in India,” Sikand told the media.

Aetna’s acquisition of IHO has followed a slew of deals conducted by private equity firms looking to fund India’s escalating healthcare needs. These investments include HDFC PE’s purchase of a 12 percent stake in e-hospital MediAngels and Sequoia Capital and Elivar Equity INR 1.5 billion (US$3.4 million) outlay for a minority stake in Glocal Healthcare System’s hospital chain. The Indian government has also been looking to develop public-private partnerships in hospitals to improve and expand healthcare access towards the more remote and impoverished areas of the country. Recent moves made India’s regulatory authorities have opened up many of the country’s industries to greater foreign capital investment. This has been particularly welcome development in the insurance industry.

Since the insurance market in India was first opened up to the private sector in 1999, total insurance penetration has doubled and the domestic protection industry has overtaken several developed markets in output. There has been a substantial rise in insurance coverage, with both the number of life and health insurance policies increasing many times over. Despite this progress, Indian insurers themselves have yet to make a mark internationally in either sales or market capitalization. While premium income in the Indian insurance market within the upcoming decade is projected to reach between US$ 350-400 billion, a combination of regulatory adjustments and fierce competition between both local and international companies is expected to hamper profitability and constrict many insurers’ margins in the short term.

Insurance Companies Mentioned

Aetna

Aetna is a leading global diversified health care benefits company head-quartered in the U.S., serving approximately 35.8 million people with information and resources to help them make better informed decisions about their health care. Aetna offers a broad range of traditional and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life and disability plans, and medical management capabilities and health care management services for Medicaid plans. Our customers include employer groups, individuals, college students, part-time and hourly workers, health plans, governmental units, government-sponsored plans and expatriates.

Globalsurance International Health Insurance - Expat Medical insurance products for you and your family no matter where in the world you live.

Potential Wave of Mergers & Acquisitions in Global Insurance Industry’s Future

Insurance industry analysts have been anticipating a busy summer season of merger and acquisition activity amongst global insurers and reinsures, as a continued soft market in the wake of prolonged catastrophe losses prompts mid-sized companies to consolidate and gain scale to return sufficient capital for investors.

The US$3.2 billion merger of equals between international reinsurers Transatlantic Holdings Inc. and Allied World Assurance Co, discussed earlier this week, has been accompanied by spate of smaller deals affecting the insurance industry around the world.

Aetna Inc, the third-largest US health insurer, announced on Monday its plans to acquire Genworth Financial Inc’s Medicare-supplement business for about US$290 million, to increase its coverage of the American retiree population.

Medicare supplement insurance, sometimes referred to as ‘Medigap’ plans, offer coverage for deductibles, co-payments and other expenses not provided by Medicare, the universal US government health insurance system for elderly and disabled citizens. The market for supplementary Medicare coverage is expected to grow rapidly as the large ‘baby boomer’ generation of Americans approach age 65 and become eligible for Medicare. The demand for Medicare-supplement services offered by private insurers will increase as the burgeoning ranks of retirees have come to expect similar benefits to those they have enjoyed throughout their career.

Through the acquisition of Genworth’s subsidiary, Continental Life Insurance Co, Aetna will add an estimated 145,000 members to its existing base of Medicare supplement policyholders. The deal is expected to close in the fourth quarter this year with Genworth recording a gain of US$35 million tied to the sale.

This move comes on the back of Indianapolis-based WellPoint Inc’s similar acquisition of California Medicare Advantage plan provider CareMore for a reported US$800 million last week. Medicare Advantage plans offer a comprehensive private-run parallel version of Medicare. WellPoint also citied American demographic trends as a leading factor behind the deal, detailing that for every year until 2030, 1 million more baby boomers will become eligible for Medicare in states which Wellpoint operates its Blue Cross Blue Shield insurance schemes.

North of the border, Royal & Sun Alliance Insurance Group PLC is purchasing Expert Travel Financial Services Inc., one of Canada’s largest travel and health insurance distributors, in a strategic acquisition intended to create a better vertically integrated business model.

Mike Wallace, SVP of Personal Specialty Insurance & Reinsurance at RSA, described the move as a necessary step forward for the company “This is an opportunity to grow in travel insurance by integrating distribution,” he said, adding “This is part of our long-term strategy of consolidating the Canadian insurance industry, and I would say this is not the last one we’ll do.”

RSA is one of Canada’s largest property and casualty (p&c) insurers and in the top three among travel insurers, with US$1.9 billion in direct written premiums in 2010. The Canadian insurance industry has been subject to fervent trading activity, with recent moves including Intact Financial Corp’s US$2.6-billion acquisition of AXA Canada to cement its spot as the largest property and casualty insurer in the country.

Acquisitions have also enabled insurers to diversify their distribution platform and embrace new methods of interacting with clients. This week, Standard Life’s employee benefits consultancy and technology provider Vebnet formally announced a tie-up with Vielife, the online health solutions and wellbeing consultancy acquired by CIGNA in 2006.

Through this partnership, Vebnet declared that employers using the reward and flexible benefits platform could now provide their workforce with an additional service that lets employees measure and monitor their nutrition, stress, sleep and physical activity levels. The service is intended as a support mechanism for employees to maintain healthy lifestyle habits, decreasing potential sickness absences and keeping them engaged with their employer in a positive manner. Standard Life added that the deal would enable employers to identify specific health risks and would lead to more employees becoming engaged with the Vebnet platform.

More complicated industry transactions could encounter other substantial impediments. The previously mentioned merger between Transatlantic Holdings and Allied World Assurance may have already hit a snag. A shareholder in Transatlantic that owns 24 percent of the company, Davis Selected Adivers L.P., has objected to the proposal, filing a statement with the Securities and Exchange Commission stating “serious concerns about the proposed transaction,” and may encourage the company to explore more options before it commits to such an arrangement.

The two companies have thus far declined to comment on this development. Under the proposed US$3.2 billion deal, Transatlantic’s shareholders would wind up with around 58 percent of the new combined company and Allied World’s stockholders with the remaining 42 percent.

The main international credit rating and insurance information agencies have had a mixed response to the proposed merger, which would form a singular insurance and reinsurance entity with US$7 billion in shareholder equity.

Standard & Poor’s (S&P) put Allied World’s financial strength ratings on credit watch with positive implications, saying it expected to raise the ratings by one notch (up from ‘A’) if the merger goes through as is. S&P left Transatlantic’s financial strength ratings unchanged, because despite the noted strengths of the merger, S&P notes “it remains to be seen whether the combined entity will be able to outperform its peers.”

Moody’s responded to the proposed merger by placing Allied World under review for a possible upgrade and also affirming the ratings of Transatlantic Re. “The rating agency believes the merger will provide both franchises with strong benefits,” Moody’s reported.

AM Best left both companies ‘A’ financial strength ratings untouched but remained broadly positive on the deal. “The merged entity is expected to enjoy an enhanced business profile that will likely inure benefits in the form of an improved competitive position. The merged entity should also benefit from broader distribution channels, broader product diversity and the benefits of a significant global presence,” the agency said in a statement.

Companies Mentioned

Allied World Assurance

Allied World Assurance is a global insurance and reinsurance business. The company operates through a worldwide network of offices in several major US cities, Hong Kong, London, Singapore and Zug, Switzerland. Allied World Assurance provide property, casualty, insurance and specialty reinsurance products.

Transatlantic

Transatlantic Holdings Inc. is a leading international reinsurance company, headquartered in New York. Through it’s subsidiaries, Transatlantic offers reinsurance capacity and analysis for a wide array of property and casualty products, with a particular concentration on specialty risks.

Aetna

Aetna international health insurance Aetna is a leading global diversified health care benefits company head-quartered in the U.S., serving approximately 35.8 million people with information and resources to help them make better informed decisions about their health care. Aetna offers a broad range of traditional and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioral health, group life and disability plans, and medical management capabilities and health care management services for Medicaid plans. Our customers include employer groups, individuals, college students, part-time and hourly workers, health plans, governmental units, government-sponsored plans, labour groups and expatriates.

WellPoint

WellPoint is the largest health benefits company in USA, with more than 33 million members in its affiliated health plans. As an independent licensee of the Blue Cross and Blue Shield Association, WellPoint serves members as the Blue Cross licensee for California; the Blue Cross and Blue Shield licensee for Colorado, Connecticut, Georgia, Indiana, Kentucky, Maine, Missouri, Nevada, New Hampshire, New York, Ohio, Virginia, and Wisconsin. In a majority of these service areas, WellPoint does business as Anthem Blue Cross, Anthem Blue Cross Blue Shield or Empire Blue Cross Blue Shield. WellPoint also serves customers throughout the country as UniCare.

RSA

RSA has a proud heritage dating back almost 300 years. The current company structure was created in 1996 following the merger of two of the largest insurance companies in the UK, Royal Insurance and Sun Alliance. In 2008 the company shortened their name to RSA and simplified and refreshed their corporate brand. RSA has over 20 million customers worldwide. The Group currently manages GBP 14.3 billion of investments. RSA is a member of the FTSE4Good Index.

Globalsurance International Health Insurance - Expat Medical insurance products for you and your family no matter where in the world you live.

AETNA Partners with Huatai Insurance

AETNA, one of the world’s oldest insurance companies, has partnered with Huatai Insurance in the People’s Republic of China in order to provide a comprehensive individual international private medical insurance policy within the Chinese insurance market.

The AETNA offering is thought to be extremely similar to the company’s existing individual international health insurance products, and is designed to offer medical protection throughout the Greater China Region.

AETNA entered the Chinese insurance market in 1997 through a joint venture with China Pacific Life Insurance Company; the companies formed Pacific An-Tai Life Insurance Company, although AETNA later sold its stake in the venture to ING during 2000.

However, it was not until 2008 when AETNA officially established a presence in the China, opening a representative office in Shanghai in order to explore the growth potential offered by the world’s second largest economy. With the interest from a number of global insurance leaders towards China, the partnership with local insurance provider Huatai places AETNA in good stead to capitalize on the rapid growth of the burgeoning Chinese middle class.

Huatai insurance company has been active in the Chinese insurance market since 1996, when the company was created by a group of 63 large-scale enterprises. Huatai specializes in the provision of Accident and Health, Property, and Liability insurance.

With more than a decade of experience working within the Chinese healthcare system, the Huatai partnership presents significant opportunities to AETNA as the company seeks to develop the future of its business in China.

The AETNA Huatai health insurance offering is expected to be available to purchase within China by the end of Q2 2011. However, actual details of the policy, and its expected deployment date, remain uncertain at this time.

Globalsurance International Health Insurance - Expat Medical insurance products for you and your family no matter where in the world you live.

Aetna Revamps Private Healthcare Plans

Aetna the healthcare insurance specialist has launched a new suite of International Healthcare Plans (IHPs) designed to cater for expatriate employees and employing companies in order to make health benefits more accessible for members when overseas.

The Connecticut based insurer’s revamp of its healthcare insurance products is focused on giving employers and their workforce optimum flexibility in accessing healthcare benefits and the management of costs for treatment required.

The fundamental purpose of the new plans is to offer greater accessibility to healthcare, medical services and benefits for Aetna members when seeking medical care abroad. The reform of Aetna’s international health plans means that expatriate members of company based private healthcare insurance schemes will have more flexibility in obtaining medical services, including benefits covering services associated with care such as dental, maternity and the provision of pharmaceutical products as well as traditional medical treatment and emergency admittance to hospital.

The new additions to Aetna’s private plans include the revamping of health and wellness products, with 49 optional benefits available for employers to incorporate into plans which can be tailor-made to fit individual requirements. The improvements in core healthcare plans have been implemented to meet the emerging needs of members as demands change with more employee mobilization.

A key facility included in the new suite of plans is a free of charge health risk assessment – part of Aetna’s wellness package. This feature, along with other health improvement initiatives, has been included to promote the adoption of healthier lifestyles. Encouraging members of private healthcare schemes to follow procedures for healthy lifestyles has been recognized as an important tool for health insurers and employers in order to maximize productivity from employees.

The multi-national insurer identified the variation in the needs of employers and employees and has adapted plans to offer comprehensive core healthcare benefits.

Aetna’s new IHPs will mean employees now have the choice of 49 additional benefits with a range of financial limits. It has become more important for global health insurers to offer flexible plans as workers move from country-to-country as part of companies globalized trading.

Changes to Aetna’s international plans have been made to reflect cover for local niche treatments such as the application of traditional Chinese medication, which is popular with the workforce originating from the Far East.

“We recognise that employers need a comprehensive level of core health benefits and flexibility in plan design in order to meet the needs of their varied employee populations. We have redesigned our health plans to provide a richer level of base benefits to work with different budgets and included wellness features to help employees make positive changes that can lead to lasting healthy lifestyles. At the same time, we’ve provided the most flexible selection of add-ons and limits yet, so that employers can purchase the features they need to tailor benefits packages to cater for regionally diverse needs and make the most of their healthcare investments.” said Donna Otten, head of Aetna Global Benefits (AGB).

Aetna’s core health plans – IHP Essential, IHP Plus and IHP Elite – will allow additional benefits for hospice care, inoculations and vaccinations. Expatriates can also have coverage for evacuation assistance to repatriate an employee, along with emergency travel for an expatriate on compassionate grounds if a close family member is taken ill. These sort of extra benefits have been included in Aenta’s international health plans to meet the needs of expatriates who want to ensure their private healthcare policy covers any potential emergency circumstance.

The new IHPs are already available in Europe, the Middle East and Hong Kong, with plans for introduction in China, Jakarta and Singapore in the near future. The plans can also be adapted to cater for college students or government departments and other types of group activity.

Insurance Company Mentioned:

Aetna

Aetna is a leading global diversified health care benefits company head-quartered in the U.S., serving approximately 35.8 million people with information and resources to help them make better informed decisions about their health care. Aetna offers a broad range of traditional and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioural health, group life and disability plans, and medical management capabilities and health care management services for Medicaid plans. Our customers include employer groups, individuals, college students, part-time and hourly workers, health plans, governmental units, government-sponsored plans, labour groups and expatriates.

Globalsurance International Health Insurance - Expat Medical insurance products for you and your family no matter where in the world you live.

US Health Insurer Aetna Signs Reinsurance Agreement

Aetna has entered into a novel three-year reinsurance agreement with Vitality Re as part of the US insurer’s long-term capital management strategy.

The purpose of the reinsurance deal is to allow Aetna’s commercial health insurance unit to release retained capital in order to provide more flexibility for the expansion of operation essentially arising from developments in US health reforms.

The new agreement between Vitality Re and Aetna will allow the US health insurer to reduce its own capital base by providing collateral for US$150 million of reinsurance coverage on a portion of Aetna’s group commercial health insurance business.

The Cayman Island based company – Vitality Re – is a newly formed insurer which has released the industry’s inaugural health insurance-linked notes in a private offering in relation to the recent agreement with Aetna.

Joseph M. Zubretsky, senior executive Vice President and CFO of Aetna, said: “I am pleased to announce the successful completion of this transaction, which allows Aetna to free up capital held with respect to the covered business, and deploy it accretively for other purposes. Through this innovative transaction, we have improved our capital efficiency, enhanced our financial flexibility and reduced our weighted average cost of capital. We expect this to be the first step in a larger program.”

In addition to Aetna announcing its new reinsurance agreement, the US health insurer highlighted strategic plans for 2011 at the J.P. Morgan Healthcare Conference held in San Francisco on the 10th January 2011.

A key part of Aetna’s business plans for 2011 is to increase its presence in the Medicaid market in conjunction with the President Obama lead health reform program in the US; a major element of the US healthcare amendment being to expand the reach of healthcare coverage in the country.

Medicaid is available to certain low-income individuals and families in the US and is seen as a pivotal factor by Aetna for growth of the insurer’s activities in the future.

Medicaid is a joint US federal and state government healthcare scheme providing health insurance for low-income individuals and families in the US under the March 2010 Patient Protection and Affordable Care Act. As the US healthcare reform package begins to take effect, Aetna aims to seize the opportunity to increase the number of policyholders under the Medicaid arrangements.

Arrangements for Medicaid insurance will change in early 2014 making it more accessible to a greater pool of people in the US. From 2014, nearly all American adults under the age of 65 with an individual income under US$15,000 per year will be eligible for Medicaid in all US states. Couples, pregnant woman and people with disabilities will also be able to qualify, with the threshold level being altered to make Medicaid easier to obtain.

Health insurers in the US have experienced a steady decline in membership numbers in recent years resulting from the tough economic conditions following the near collapse of financial markets in 2008 and the resultant increase in the level of unemployment with corporate retrenchment. As the US healthcare system primarily revolved around companies providing their workforce with healthcare coverage, the vulnerability of the health insurance network in the USA – and its impact on the nation’s general health – has been exposed.

As the US health reform program starts to take shape, it is expected that an extra 30 million Americans will have access to health insurance with US health insurers, such as Aetna, competing for this market.

However, the US health reforms require insurers to comply with tighter regulations including the requirement to spend roughly 80 percent of collected premiums on direct medical care, with strict guidelines for the provision of healthcare coverage for the vulnerable population.

Aetna announced third quarter earnings amounting to US$419.6 million, covering 18.5 million members – although this reflected a decline of 74,000 in its customer base. Aetna is expected to release fourth quarter figures for 2010 in February 2011.

Aetna recently announced that it has completed the takeover of Medicity, a health information exchange technology company. The acquisition provides Aetna with information on a broad range of products and services covering health systems, hospitals, physician practices and health information exchanges. This will allow Aetna to be more efficient in the provision of patient care and reduce associated healthcare costs.

In addition to health care management services for Medicaid plans, Aetna provides a wide range of health insurance products and services including care plans for medical, pharmacy, dental, behavioural and disability conditions; it also provides group life plans. The client base includes individuals, employer groups, government units, part-time and hourly workers, labor groups and expatriates.

While Aetna, like most health insurers in the USA, has struggled in recent years to maintain, let alone generate new new clients, the proposed reforms to health insurance present US health insurers with new opportunities. Aetna’s new agreement with Vitality Re is designed to offer the health insurer more flexibility in writing new commercial health insurance in this very competitive business.

Insurance Company Mentioned:

Aetna

Aetna is a leading global diversified health care benefits company head-quartered in the U.S., serving approximately 35.8 million people with information and resources to help them make better informed decisions about their health care. Aetna offers a broad range of traditional and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioural health, group life and disability plans, and medical management capabilities and health care management services for Medicaid plans. Our customers include employer groups, individuals, college students, part-time and hourly workers, health plans, governmental units, government-sponsored plans, labour groups and expatriates.

Globalsurance International Health Insurance - Expat Medical insurance products for you and your family no matter where in the world you live.

India’s GIPSA shopping for Third Party Administrator Partner

India’s General Insurers Public Sector Association (GIPSA), have shortlisted 9 companies to create a captive joint-venture third party administrator (TPA) to manage their cashless claims services.

GIPSA’s group of four public sector general insurance companies — New India Assurance; United India Insurance; Oriental Insurance and National Insurance; own 80% of India’s cashless claim insurance market and are set to make their decision on their partner for the TPA in two months. Among the 9 who are considered for the TPA are US companies Aetna and United Healthcare.

GIPSA aims to utilise technical support from the proposed joint-venture TPA to control and recover its recent health insurance losses that have resulted from mismanagement of its cashless service claims. GIPSA are currently undergoing a process of change in their approach to health insurance and therefore announcing their decision to build their own TPA.

GIPSA has in turn caused turmoil among the existing TPA’s in India, given that GIPSA accounts for over 80 per cent of business for TPAs; TPAs are concerned that a captive company will overthrow the market. The TPA’s have addressed their concerns to the Competition Commission of India (CCI), and have asked GIPSA to refrain from a decision until the CCI responds, which is expected sometime in the next few weeks.

On July 1st 2010, GIPSA set forth the Preferred Provider Network (PPN), setting new requirements for hospitals offering cashless services in India. Under the PPN, GIPSA fixed the cost for 43 common surgical packages, offered as part of the cashless claims insurance policy. Hospitals enrolled in the PPN would have to meet these requirements and agree to the fixed costs of procedures in order for their patients to be able to utilize the cashless claims insurance services. Shortly after the PPN was established, the number of facilities offering cashless services fell from 900 to just over 70 hospitals. A number of hospitals were said to be reviewing and adjusting their fees in order to participate in the PPN.

Healthcare providers have argued that the fees set by the PPN are too low and in turn are damaging the quality of services that the hospitals can offer. The medical fees set by insurance companies were said to fall 50 percent lower than other hospital rates. On 13th of August 2010, the Association Medical Consultants, Mubai (AMC) publicly urged all hospitals listed on the PPN to withdraw their enrollment and for all remaining hospitals to refrain from offering cashless services.

According to M. Ramadoss, MD of New India Assurance, ‘Rates could vary from hospital to hospital, based on location, facilities, and equipment. It’s not a one-size-fits-all solution. If there is an industry standard for standard rates, we will welcome it. Due to the absence of it, I have to step in, but not to rob hospitals of their profits. We have benchmarked average costs of the previous two-three years and have used recommendations of doctors on panels for frozen standard rates for procedures and treatments’.

GIPSA is hoping to increase the number of hospitals listed on their network, however, given the discrepancy of healthcare fees, the number of hospitals listed on the PPN may drop in return.

However, given that an increasing number of recognizable hospitals are joining the PPN, including Jaslok Hospital, some hospitals in India fear they may lose customers over competition. Recently established Medanta Hospital joined the PPN in order to increase its patient numbers, as well as Sir Ganga Ram Hospital which recently had several top doctors leave. A couple of other big institutions are also said to be in negotiation with GIPSA to join the PPN including hospital chains Max and Apollo as well as the Bombay Hospital and Kokilanben Dhirubhai Hospital. Fortis Group is also another large hospital chain that is likely to enroll in the near future.

GIPSA has argued that the PPN is a ‘policy-holder friendly system’, given that the low hospital rates would reflect in its low premiums. It also allows policyholders to claim directly, without going through the reimbursement process and therefore not having to worry about insurers not covering the treatment.

However on July 1st 2010, the Union Government of India introduced a 10.3% service tax charge to every cashless claim made by patients under the insurance policy. Although the service tax is paid through TPAs, as they reimburse the hospital claim, the patient’s policy is ultimately affected – given the accommodation needed for the service tax fees which is likely to increase the insurance premium in the long run. Patients who claim through the reimbursement system are not charged the service tax fee.

GIPSA have experienced considerable losses on their cashless service claims, as the medical costs incurred from claims has so far outweighed their premium revenue. The loss ratio, in some instances, was calculated as high as 130 per cent. The PPN have therefore set tight limitations on hospital packages, with the aim to avoid future mismanagement of claims.

Media outlets have questioned whether the losses faced by GIPSA were partially due to over inflated or falsified bills submitted by hospitals, however the AMC argued that this claim was ‘preposterous’. The AMC believe the losses faced by GIPSA are ‘over-exaggerated; due to faulty product designs and mistakes made in working out the premiums; and due to connivance of the TPA’s in passing false/over-exaggerated claims’. The AMC says they will negotiate with GIPSA to get a ‘fair deal for all our members’.

There are currently 9 companies competing for the opportunity to be part of the joint-venture TPA. Aetna is continuously seeking ways of expanding its market globally and this is one of its most recent moves. Other companies looking to become GIPSA’s partners in the captive TPA include United Healthcare, Patni Computers; Coris International; Cambridge Solutions; Lason; and existing TPA’s E-Meditek & Medi Assist.

Insurance Companies Mentioned:

Aetna

Aetna is a leading global diversified health care benefits company head-quartered in the U.S., serving approximately 35.8 million people with information and resources to help them make better informed decisions about their health care. Aetna offers a broad range of traditional and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioural health, group life and disability plans, and medical management capabilities and health care management services for Medicaid plans. Our customers include employer groups, individuals, college students, part-time and hourly workers, health plans, governmental units, government-sponsored plans, labour groups and expatriates.

United Healthcare

UnitedHealthcare, founded in 1977, is an operating division of UnitedHealth Group, a diversified health and well-being carrier in the United States. United Healthcare offers healthcare and insurance services throughout the United States.

Patni Computer Systems

Patni Computers, incorporated in 1978 and based in Mumbai, is one of the leading global providers of Information Technology services and business solutions, with international offices across America, Europe and Asia-Pacfic.

Coris International

The CORIS Group is an assitive services company, operating one of the world’s widest established international assistance and claims handling networks in the world. Based in Paris and founded in 1987, the network is at the disposal of independent clients in the Travel, Assistance and Insurance industries. Since its founding, CORIS now has physical locations in more than 40 countries across the globe.

Cambridge Solutions

Cambridge Solutions, founded in 1993, is an integrated, global service delivery system offering business solutions to large and growing companies through a broad range of IT and business process outsourcing services.

Lason India

Lason India Limited provides business process outsourcing solutions. It supports global operations in the United States, Canada, China, and Mexico. The company, headquartered in India, was founded in 1992 and is a subsidiary of Lason Inc, based in Michigan, USA.

E-Meditek TPA Services Ltd

Established in 2000, E-Meditek was one of the first Third Party Administrators to receive a license from the Insurance Regulatory and Development Authority in India.

Medi Assist

Medi Assit operate in India and were founded in 2006. Medi Assit are a Third Party Administrator, licensed by the Insurance Regulatory and Development Authority.

Globalsurance International Health Insurance - Expat Medical insurance products for you and your family no matter where in the world you live.

Insurance in the US Post Reform

The US Health Reform law mandates that by 2014, US citizens must have health insurance coverage or otherwise pay a hefty US$695 annual fine. It is estimated that the Health Reform will reduce the number of the uninsured from 19% of US citizens in 2010 to 8% by 2016.

The Health Reform law imposes new regulations and fees on insurers, and although it expands coverage to the millions of uninsured Americans, it also puts considerable pressure on insurance company profits. In the meantime US insurers are looking at new opportunities among other consumer markets in order to secure their continued growth.

A large number of US citizens are currently uninsured. Under the Health Reform law, health insurance coverage will be expanded to the millions of uninsured Americans, aiming for better access to healthcare for all citizens across the country. A recent study, conducted by the Centers for Disease Control and Prevention (CDC) indicated that during the first quarter of 2010, around 59.1 million people in the US had no health insurance, for at least part of the preceding 12 months. This compares to 56.4 million uninsured in 2008, says the CDC. The study also found that the majority of uninsured were adults, aged between 18 and 64.

Health insurance in the US is usually provided by employers or through an employed family member’s dependent coverage. However, employment is no guarantee of coverage. Due to financial pressures fueled by the recession, employers are having to cut back in costs including employee’s insurance coverage. Between January and March 2009, over 1 million employees lost their health insurance coverage. A study performed by the National Opinion Research Center (NORC) at the University of Chicago, found the proportion of workers in New York with employer-sponsered health insurance had fallen to 58%, compared to 69% in 2001. Further to this, unemployment has risen from 8.5 percent in March last year to nearly 10 percent this year. With the increasing unemployment rate in the US, the numbers of the insured has in turn dropped.

As well as increasing the number of insured individuals, the Health Reform will also affect the way US insurers do business. With new reform laws, insurance companies are barred from refusing coverage to individuals with pre-existing conditions. This law currently applies to children in the US and will come in to effect for adults in 2014. This means that US insurers will have less freedom over which market of individuals they insure, no longer being able to cherry pick their members. This will result in a larger proportion of high risk policy holders, among their population of members. Further to this, insurers are no longer allowed lifetime limits on coverage, taking away cost-cutting measures that insurers are likely to use on policy holders with chronic conditions. Needless to say, overall insurers will be spending more, post Health Reform.

With increasing numbers of Americans taking out health insurance policies, insurance companies will be anticipating a large number of new customers. This surge of new customers will also mean a rise in spending on claims, medications and other reimbursements associated under policy schemes. Newly-insured individuals will also be seeking primary care more than ever, given the cost of healthcare was a major barrier prior to the reform. We can therefore expect US insurers to use this increase to rationalise higher premiums, however this increase will not recover the profit loss that is likely to occur.

In order to enable US individuals more affordable access to the highly expensive medications in the US, the Health Reform also enforces insurers to cover 50 percent of prescription costs. The cost of prescription drugs in the US are by far the highest among developed nations. Given the pharmaceutical industry is the most profitable business in the country, with high consumers of expensive prescription drugs, this Health Reform law will also further impact insurers.

The new laws under the Health Reform undoubtedly put US insurers in an unfavorable situation, having less control over who they insure and putting a considerable dent in their profits. Insurance companies are therefore having to look elsewhere to recover the loss of profit that is expected in years to come.

A small market has open for insurance companies to target retirees who are no longer insured by the their employer, but are also not old enough to be eligible for the Medicare system that covers seniors over the age of 65. However, is this a profitable market for insurers – considering the age-related health expenses that are likely to be incurred?

What we can expect to see is an international expansion of US insurers, moving their market to overseas consumers in order to continue and secure growth and profit. A larger, more profitable market exists among overseas consumers who can afford private health insurance, beyond what their Government’s healthcare system can provide. While Aetna and Cigna Corp primarily offer health insurance through large employers in the US, they are among the US leading insurers who view international markets as an appealing post-reform option.

Cigna’s CEO David Cordani, is currently investing in products sold to individuals that supplement Government healthcare. Cordani recently said the company is seeing new opportunities for international growth as the company establishes potential markets in India and Turkey. Cordani anticipates this international growth will extend into Asia as well as Europe, the Middle East, and Latin America. As well as Cigna, Aetna is also investing in products such as these.

Mark Bertolini, new CEO of Aetna said recently, “We can’t stay where we are. We have to move. We have to change. Aetna views international markets as an enticing post-reform option. Health insurers sell expatriate coverage to multinational companies that are increasingly globalizing. A rising middle class of overseas consumers who can afford insurance products beyond what their governments offer provides another avenue for international growth”.

It will take years until we know exactly what affect the Health Reform will have on the US healthcare system and insurance market as it is today. US citizens will be taking out more health insurance coverage and there will be a large influx of patients seeking primary care, given that healthcare will be more accessable. While what we can expect among US insurers, is a move towards a more profitable, healthier market of international consumers.

Insurance Companies Mentioned:

AETNA:

Aetna is a leading global diversified health care benefits company head-quartered in the U.S., serving approximately 35.8 million people with information and resources to help them make better informed decisions about their health care. Aetna offers a broad range of traditional and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioural health, group life and disability plans, and medical management capabilities and health care management services for Medicaid plans. Our customers include employer groups, individuals, college students, part-time and hourly workers, health plans, governmental units, government-sponsored plans, labour groups and expatriates.

CIGNA:

A global health service company dedicated to helping people improve their health, well being and sense of security. CIGNA Corporation’s operating subsidiaries provide an integrated suite of medical, dental, behavioural health, pharmacy and vision care benefits, as well as group life, accident and disability insurance, to approximately 46 million people throughout the United States and around the world.

Globalsurance International Health Insurance - Expat Medical insurance products for you and your family no matter where in the world you live.

New CEO Named for Aetna

Aetna Inc., the third-largest health insurer in the US, has announced that its Chairman and current Chief Executive Officer, Ronald A. Williams, will be succeeded by the end of November 2010 by Mark T. Bertolini, current President of Aetna. Mr. Williams intends to retire, and will stay on as executive chairman until April 2011, when this role will also be assumed by Mr. Bertolini.

Mr. Williams, 60, who joined Aetna in 2001 and became its CEO in 2006, brought the company back to profitability twice over the past 10 years, when revenue from premiums failed to match medical costs. The insurer managed to lower medical costs through the introduction of insurance plans with higher deductibles, a move in which Mr. Williams played an instrumental role.

Mr. Bertolini, 54, joined Aetna from Cigna Corp. at the beginning of 2003 and was appointed as President in 2007. Mr. Bertolini was Senior Vice-President for national sales at Cigna from 2000 to 2002, after he served as Executive Vice-President at NYLCare Health Plans Inc., a health insurer bought by Aetna in 1998.

According to analysts, one of the initial challenges for Mr. Bertolini in his new role as CEO will be to articulate how Aetna will conquer the challenges posed by the recently-passed healthcare law, something that in the view of industry observers, their close competitors have already made known their respective plans. It is anticipated that Mr. Bertolini will announce the strategic plans of Aetna for diversification of revenue sources.

After the retirement of Mr. Williams becomes effective in April 2011, he will continue being a consultant for Aetna, advising on matters of public policy and federal regulatory strategy until February 2012.

Insurance Company mentioned:

Aetna

Aetna is a leading global diversified health care benefits company head-quartered in the U.S., serving approximately 35.8 million people with information and resources to help them make better informed decisions about their health care. Aetna offers a broad range of traditional and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioural health, group life and disability plans, and medical management capabilities and health care management services for Medicaid plans. Our customers include employer groups, individuals, college students, part-time and hourly workers, health plans, governmental units, government-sponsored plans, labour groups and expatriates.

Globalsurance International Health Insurance - Expat Medical insurance products for you and your family no matter where in the world you live.

New Asia Pacific Appointments Announced by Aetna

Aetna, one of the leading global healthcare benefits companies, has announced the appointments of Hocking Cheng and Derek Goldberg as Managing Director of Greater China and Managing Director of South-east Asia, respectively. In these new positions, Mr. Cheng and Mr. Goldberg will oversee the development and execution of growth strategies aimed at further expanding the international business of the company in the Asia Pacific Region.

These two new appointments were described by the group Managing Director of Aetna Global Benefits (AGB), David Corkum, with these words: “The Asia Pacific region is a strategically important market for Aetna’s current and future international expansion. By appointing a Managing Director to lead our overall efforts in each territory, we can better increase our commitment and presence in the region to exceed the needs of our valued customers and capitalise on existing growth opportunities.”

The Aetna Global Benefits Managing Director for South-east Asia will focus on capitalizing upon strategic development opportunities to be found in the Association of South-east Asian Nations (ASEAN) of Brunei Darussalam, Cambodia, Indonesia, Laos, Malaysia, Philippines, Singapore, Thailand and Vietnam. At the same time, AGB aims to strengthen its commitment in the Greater China region, which covers mainland China, Hong Kong, Macau and Taiwan.

The most recent role of Mr. Cheng was to lead the efforts to develop the strategy for international expansion of Aetna in China. Through this initiative, Aetna successfully launched several medical management pilots to multinational customers in China, helping these clients to proactively manage the total health of their employees and their dependants. Mr. Cheng is also the chairman of Aetna (Shanghai) Enterprise Services Co. Ltd., which is a fully-owned subsidiary of Aetna that provides health benefits and health management solutions in China.

As for Mr. Goldberg, his most recent role was performing as the Director of Business Operations for Aetna in Hong Kong. All throughout his career with Aetna, Mr Goldberg has led a number of key international development initiatives, including the acquisition of international licenses, setting up and implementing various insurance partnerships, and the management of Passport to Healthcare, a solution for international insurers in the US to handle claims administration and cost-containment.

As per the Aetna announcement, both changes in positions were instituted with immediate effect.

Companies mentioned:

Aetna Global Benefits

Aetna Global Benefits, the international business segment of Aetna, is committed to helping create a stronger, healthier global community by delivering comprehensive health benefits and health management solutions worldwide. AGB’s expatriate business is one of the industry’s largest and most prominent U.S.-based international health benefits providers, supporting more than 400,000 members worldwide. Our expatriate offerings include medical, dental, vision, life, disability and emergency assistance. The organisation’s health management business collaborates with health care systems, government entities and plan sponsors around the world to design and build locally-applied health management solutions to improve health, quality and cost outcomes.

Aetna

Aetna is a leading global diversified health care benefits company headquartered in the U.S., serving approximately 35.8 million people with information and resources to help them make better informed decisions about their health care. Aetna offers a broad range of traditional and consumer-directed health insurance products and related services, including medical, pharmacy, dental, behavioural health, group life and disability plans, and medical management capabilities and health care management services for Medicaid plans. Our customers include employer groups, individuals, college students, part-time and hourly workers, health plans, governmental units, government-sponsored plans, labour groups and expatriates.

Globalsurance International Health Insurance - Expat Medical insurance products for you and your family no matter where in the world you live.

Aetna Global Benefits expands Executive Healthcare Plan in Africa

Aetna Global Benefits (AGB) has announced a new international health insurance plan in Africa as part of their Executive Healthcare Plan lineup, targeted at regionally mobile individuals and groups.

Aetna Global Benefits offers the Executive Healthcare Plan (EHP) line of international health insurance products in partnership with Kenya-based medical insurance provider Executive Healthcare Solutions.

The Executive Healthcare Plans offer three coverage areas, which include the usual Worldwide and Worldwide excluding the U.S. areas of coverage, as well as Africa plus India, Bangladesh and Pakistan.

The new EHP Lifestyle plan includes a number of benefits over and above hospitalization and out-patient treatment, such as routine and restorative dental treatment up to US$ 1000, full refund for vaccinations and inoculations, routine management of chronic conditions, pregnancy and childbirth benefits, newborn cover including congenital anomalies, HIV/AIDS treatment, hormone replacement therapy, home nursing benefits, transportation of mortal remains or local burial costs, and hospital cash benefits.

Like other Executive Healthcare Plans, policyholders have access to Aetna Global Benefits’ Global Health Databank as well as the Health and Wellness Centre. AGB’s Global Health Databank offers the ability to look up medical facilities, medical translation services, city profiles and safety and security information from around the world. The Health and Wellness Centre offers users educational information and resources on health conditions in the region.

Stuart Leatherby, the Aetna Global Benefits Managing Director for the Middle East and Africa said “We are extremely pleased to offer an additional medical plan for customers in the region that provides increased benefits and benefit levels. This demonstrates our continued commitment to providing employers and individuals with a wide range of products and services to address their specific benefit or economic requirements.”

Insurance Companies Mentioned:

Aetna Global Benefits

Aetna Global Benefits, the international business segment of Aetna, is committed to helping create a stronger, healthier global community by delivering comprehensive health benefits and health management solutions worldwide. AGB’s expatriate business is one of the industry’s largest and most prominent US-based international health benefits providers, supporting more than 400,000 members worldwide. The organisation’s health management business collaborates with healthcare systems, government entities and plan sponsors around the world to design and build locally-applied health management solutions to improve health, quality and cost outcomes.

Executive Healthcare Solutions

Executive Healthcare Solutions is a well established Kenyan medical insurance provider, with over 50 years of experience in dealing with international insurance arrangements. Executive Healthcare Solutions has been actively participating in the international private medical insurance market for over 10 years. The company is Aetna Global Benefits and subsidiaries’ principal representative for the Executive Healthcare Plan in Africa, and currently has approximately 10,000 members across Africa.