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Govt's medical insurance initiatives will reduce out of pocket expenses over time

In India, rate of medical inflation is higher than national average, due to which treatment costs tend to be higher. Health insurance helps lessen financial burden, says PolicyBoss.com’s Apaar Kasliwal

Apaar Kasliwal, Executive Director, PolicyBoss.com
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Apaar Kasliwal, Executive Director, PolicyBoss.com

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Recent initiatives for government backed health insurance schemes have shown focus on extending the benefits to the masses and at the same time, generated higher public awareness for the need of having a health insurance cover. "As there is maturity in practice of these schemes, one can expect better coverage, better facilities and ease in ensuring financial aid towards medical treatment expenses. Given our country's medical inflation, these initiatives will, over time, help ensure lesser out of pocket expenses, especially for hospitalization up to Rs 5 lakh that forms a large part of overall numbers," says Apaar Kasliwal, Executive Director, PolicyBoss.com in an exclusive interview with Bizz Buzz.

With rising medical costs and higher treatment costs, how does health insurance stand to benefit policyholders?

In India, rate of medical inflation is higher than national average, due to which treatment costs tend to be higher. In case of emergencies, families tend to get burdened with sudden need of money for treatment. Health insurance helps lessen the financial burden in such cases by accounting for whole or portion of the insured's hospital bill. Today, most insurance companies offer cashless hospitalization, hence, all related expenses are accounted for by the health insurance policy, basis its scope. Even in case of planned hospitalization, health insurance helps ensure a hassle-free experience by helping plan for the treatment and ensuring there are no hidden cost elements.

Today's new age plans offer multiple benefit and coverage options, using which one can opt for international coverage, increase sum insured, better cover risk of critical illnesses being diagnosed and more. What's most important to note is that with age, health insurance premiums tend to increase. So it's strongly recommended you start early, as with a healthier body, chances of getting higher value cover at relatively lower premium, are higher.

What are the top considerations while purchasing a health insurance policy for parents?

While purchasing health insurance for parents, it is important to note the list of pre-existing diseases and conditions that are included in the policy. Make sure any pre-existing disease and / or existing medication is duly declared, as a wrong declaration or concealment of a health condition can have a detrimental impact at time of claim. Additionally, today there are plans with deductible of Rs 1-5 lakh offering higher sum insured ranging between 20-50 lakh and more. It is recommended that you opt for a higher or highest possible sum insured with deductible, rather than choosing a high sum insured base cover.

Lastly, to ensure that the health insurance company has all necessary medical details of your parents at the time of policy starting, and to reduce chances of claim being denied, it's best to avail of the health check-up offered by insurer, and not avoid it under the presumption that it's not mandatory.

For existing policyholders, what are the available options to enhance both quality and coverage of health insurance?

Existing policyholders should look at enhancing their cover value, thereby increasing the amount of risk protection using super top-up plans. It's a smarter way of ensuring considerable risk protection at relatively lower premiums, thus beating inflation over time. Additionally, one can enhance coverage by opting for speciality covers or riders offering benefits like high value personal accident coverage, disease specific protection viz. critical illness cover or standalone cancer, heart care, daily hospital cash and more. Depending on age, current lifestyle and existing health conditions, one should take a balanced approach in improving the overall quality and scope of coverage of health insurance periodically so that at time of need, your insurance cover value is enough to account for any medical emergency, without any financial or coverage scope constraint.

What new product features/enhancements have been made to enhance coverage under health insurance?

Overall, there has been an increase in cashless treatment tie-ups by all insurers across India. This means more options for policyholders, especially in case of an emergency. In recent times, room rent caps, which have been a point of concern in the past, have been eased. Overall the claim process has been simplified for policyholders using technology, thus leading to higher customer satisfaction. Today, one can benefit from top-up plans with lower deductibles using which higher sum value can be achieved without burning a hole in your pockets. Some plans offer benefits like coverage of critical illness, OPD and Ayush treatments, using which one can make overall risk preparedness a lot better.

Will cashless treatment at preferred hospitals under health insurance get any better, in wake of the recent regulatory announcements?

As a result of recent regulatory announcements, it should become easier for insurers to empanel more and more hospitals and health service providers to their preferred partner networks, thus boosting cashless hospital network, especially in tier-III and IV cities.

This will ensure policyholders have wider range of hospitals to choose from, with much higher chances of their preferred hospital being a part of insurer's hospital network. This should encourage all those who are planning to buy health insurance as the network of cashless hospital tie-ups will increase for all insurers over time.

At the same time, insurers will have to ensure better quality and standardization of their services and claim expertise. This should offer more opportunities in future for insurers to add new products specific to diagnostics, primary health care and OPD.

If one wants to get a medical treatment done overseas, can health insurance bought in India help?

Yes, it's possible. One needs to be clear of the coverage scope as there are some plans that offer coverage only in case you are travelling overseas and there is a medical emergency while there are others who offer coverage of both emergency as well as planned treatments. So make a selection basis your needs.

Top-up Vs super top-up: How does one decide what's relevant?

Let's understand the biggest difference between the two. A top-up plan covers only a single hospitalization claim above deductible amount limit whereas a super top-up plan covers all hospitalization claims above deductible amount limit, under a single policy term.

Let's understand by an example - Ajay and Vijay both buy health insurance top-up. Ajay took top-up plan of 20 lakh with five lakh deductible amount limit while Vijay opted for super top-up plan of similar deductible and cover value.

Both make a claim of Rs 8 lakh each. Ajay paid deductible amount of Rs five lakh while insurance company paid the remaining Rs 3 lakh. The same applied for Vijay as well. After two months, both make another claim of Rs 10 lakh amount. Now, Ajay had to again pay the deductible amount and insurance company accounted for the remaining amount. On the other hand, Vijay didn't have to pay anything now as his super top-up policy accounted for entire amount. So in case multiple hospitalizations due to any chronic ailment or in case of frequent medical procedures, super top-up is recommended.

What are the most popular riders to add further value to your health insurance cover?

One of the most popular rider is critical illness. This helps reduce the financial burden in case the insured is diagnosed with any of the pre-specified critical illnesses and at the same time, provide better disease wise coverage. Given the hectic lifestyles and higher stress levels overall, this is a very relevant cover to consider. In case your existing policy doesn't offer any No Claim benefits, you could consider a No Claim Bonus rider, which will help enhance your cover value for each claim free year, at relatively lower premiums. Do refer the terms and conditions of cover you select so as to make an informed decision. Other riders to consider are hospital cash and AYUSH treatment.

How does one decide what sum assured value is right to offer adequate coverage?

While there is no set formula, one should opt for as high a cover value as one can afford.

It is also recommended to balance between base and top-up/super top-up cover, rather than opting for a high value cover, thereby improving overall affordability. Lastly, basis family medical history, lifestyle and current health conditions of person(s) to be insured, set a cover value that's future proof.

Is longevity of life impacting premiums for health insurance?

India is today witnessing higher life expectancy and as you live longer, you pay premiums for a longer duration. That being said, with age, there are higher chances of hospitalization or being diagnosed with a chronic ailment / critical disease. Given higher probability, health insurance premiums tend to be higher for elder age groups. Longevity of life is one among several factors that determine health insurance premium and should not be looked at in isolation.

Is portability a right choice for consumers?

A health insurance cover purchased 10 years ago had coverage and benefits far lesser in scope and efficacy as compared to new age plans today that offer a host of value-added services and benefits allowing for better coverage scope and disease specific preparedness. So if you are an existing policyholder that doesn't enjoy most of available benefits today, portability is a great option to enhance your coverage and be better equipped to handle a medical emergency. It's important to declare all existing health conditions and ailments while porting, so as to ensure a hassle free claim experience.

Kumud Das
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