With the rising cost of healthcare in our country, health insurance is an essential investment in ensuring our family’s critical healthcare needs. Healthcare costs in India are increasing at a distressing rate. Based on some estimates, the annual healthcare inflation is the range of 15 – 25%. In the absence of health insurance, a serious illness in your family can cause financial distress or leave big hole in your hard earned savings, at a time when you least expect it. However, health insurance as a financial product is still widely misunderstood due to the general lack of awareness about health insurance in India. In this article, we will try to address some myths with regards to health insurance plans.
Myth 1: If you are covered under your company’s group health insurance scheme, you do not need to buy additional Mediclaim.
You should check what kind of benefits your employer’s group insurance policy offers. Check what is the total amount and nature of illnesses that your company’s group insurance covers. Does the policy cover your spouse, children, parents and other dependents? If your company’s group insurance is not adequate for your needs, then you should buy additional health insurance to protect your family’s healthcare needs. You should also consider buying additional healthcare as a security for your family’s health protection, in case your employer suddenly decides to cut down the benefits or if you leave your current employer for better job prospects.
Myth 2: You should always check the empanelled hospitals when you buy your Mediclaim policy.
Hospital Network in a health insurance or Mediclaim plan changes from time to time. Health Insurance Companies often blacklist defaulting Hospitals and they are not contracted throughout your policy term. The network of empanelled hospitals can change any time, even during your policy term. Similarly, hospitals can refuse cashless transactions of your Third Party Administrators for delayed payments, even if the hospitals are empanelled with your health insurance company. Therefore, there is no fixed or contracted list of hospitals between your health insurance Company and you.
Myth 3: Mediclaim is always cashless.
Many people believe Mediclaim is always cashless. Cashless is undoubtedly a great value added feature, since it saves the insured from financial distress in the event of a sudden hospitalization. However, many health insurance customers would have found out, much to their great dismay, that emergency hospitalization under Mediclaim is not always cashless. Health insurance buyers need to understand that, the cashless arrangement is only for authorized claims, and not for all claims. Third Party Administrators and Health Insurance companies need to assess every claim received, against the policy terms and conditions, to authorize payment. Such an authorization could require additional information as well as documents and hence can take anywhere for 4 hours to 2 days of time, no matter how urgent hospitalization or medical treatment is. Moreover, cashless admission in many hospitals only works during fixed hours, when the insurance desk is open. If you or your family members need to get hospitalized on an emergency basis, it may not always be cashless, even though your Mediclaim policy may have a cashless arrangement with your hospital.
Myth 4: You need to be hospitalized for 24 hours to get a Mediclaim.
It is true in many cases, but not always. Why? Most procedures, which do not need overnight hospitalization, is treated as an out-patient procedure and therefore do not qualify for Mediclaim. However, some procedures which require hospitalization may not require the patient to stay for 24 hours in the hospital. The keyword is hospitalization, not the length of time the patient is hospitalized. A case in point is my mother’s cataract surgery last year. She was hospitalized but was discharged much before 24 hours had elapsed from the time she got admitted. She qualified for Mediclaim and did receive her claim. With advances in medical science, length of stay in the hospital is reducing and therefore, hospitalization is important for Mediclaim and not the length of stay. On the other hand the reverse is also true. Sometimes for diagnostic tests, the patient may need to stay in the hospital for more than 24 hours, but since no treatment is carried out, it does not qualify for Mediclaim. For example, my father had to get his colonoscopy test, for which he had to stay overnight in the hospital. Since, the purpose of his stay was purely diagnostic testing and no treatment, he was not eligible for Mediclaim, even though he stayed in the hospital for more than 24 hours.
Myth 5: Buy the cheapest Mediclaim policy. They are all the same.
The cheapest policy may not be the best one. Premiums should be commensurate with the benefits offered by the health insurance policy. There are a number of policy features that you should review:-
- Treatment wise limits and co-pay policy
- Day wise Cash limit
- Maximum renewal age
- Network of empanelled hospitals
You should understand the benefits and carefully review the policy wordings, and then compare the premiums. Health insurance is a complex contract. You should engage a good financial adviser, experienced in health insurance, to help you select a health insurance policy which is suitable for you. Finally, you should do a credibility check on the health insurance companies you are considering. You should read online reviews or find out from your financial adviser, about the claims experience, policy changes, and customer service of the health insurance companies.
In this blog, we have discussed some common myths about health insurance. Health insurance is an essential investment in ensuring our family’s critical healthcare needs. You should educate yourself about health insurance, whether it is offered by your employer or you buy it yourself. If you have a good health insurance that meets a wide variety of medical needs, you will be free from health related financial concerns and focus on other important financial goals.