Healthcare insurance: Demystifying coverage for the modern consumer

Healthcare insurance is a vital tool for managing medical expenses and ensuring financial stability during unforeseen health crises. Healthcare insurance also helps you deal with the financial repercussions of an accident or emergency. Medicare or medical costs are rising year on year. Inflation in Medicare is higher than inflation in food and other articles. While inflation in food and clothing is in single digits, medicare costs usually escalate in double digits. To maintain economic balance, it becomes very important for every middle-class family to have healthcare insurance.

Understanding Healthcare insurance

Healthcare also helps you deal with the financial repercussions of an accident or emergency. Let's take a look at how healthcare insurance works. The process starts when you apply to purchase a plan. Depending on your age, medical background, sum insured required and the type of plan you have selected, you will be provided with premium quotes. A few times you might be asked to do a few medical tests before the insurance provider decides whether they'd like to provide you with the required cover. Healthcare insurance is a contract between you and an insurance provider. You pay a monthly premium, and in return, the insurer covers a portion of your medical expenses, depending on the terms of your policy. When the terms and conditions are finalized between you and the provider you will be provided with a policy. Each policy comes with a few waiting periods.

There are a few terms that must be known before going for healthcare insurance:

Add-on Covers/Riders/Optional Covers: Add-on covers in healthcare Care are insurance are additional features that policyholders can add to their basic health plan on the payment of an extra premium. Some add-on/optional covers that you can choose to enhance your base health insurance plan are critical illness coverage, maternity coverage, room rent waiver, hospital cash benefit, etc.

Automatic Restoration: Nowadays most health plans offer 'restoration benefit'. It is the facility of refiling the sum insured amount before the policy renewal date when the original sum insured is exhausted due to one or multiple claims in a policy period.

Bariatric Surgery: Bariatric surgery, also called weight-loss surgery, is done to treat obesity or help reduce weight. Some healthcare insurance policies include coverage for this surgery.

Coverage: Coverage is the range of benefits included in a health insurance plan. The more coverage a plan offers, the more benefits you will get.

Premium: This is the monthly amount you pay to maintain your insurance coverage. Think of it as a subscription fee for accessing healthcare services at reduced costs.

Deductible: This is the amount you must pay out-of-pocket for medical services before your insurance begins to share the costs.

Co-pay: A fixed amount you pay for specific services, such as a doctor’s visit or prescription medication, after meeting your deductible.

Out-of-pocket maximum: The most you will pay for covered healthcare services in a year. Once you reach this limit, your insurance covers 100% of eligible expenses.

Claim: A health insurance claim is a request made by the policyholder to the insurance company to pay for medical expenses covered under their policy. If the claim is not approved, policyholders have to cover the costs themselves.

After becoming friendly with these terminologies it becomes easier to understand health insurance.

Types of most common Healthcare Insurance plans in India

Individual Healthcare Insurance

An Individual Health Insurance plan is only for a single person and it can be bought by a single individual. The individual who gets himself insured with this plan is compensated for the expenses incurred for illness and medical expenses. Such types of medical insurance plan cover all the hospitalization, surgical, pre and post-medication expenditures till the insured limit is reached. However, if you get insured for any existing illness, there is a waiting period of 2-3 years for claiming the benefits.

Family Healthcare Insurance

Family Health Insurance Policy secures the entire family under a single cover. Health insurance plans for families cover all the members of the family including spouses, children, and elders. Only one member of the family has to pay the premium, and the entire family gets insured with a single premium.

Critical Illness Insurance

The Critical Illness Insurance plan insures the person by offering a lump sum amount of money for life-threatening diseases. At the time of buying the insurance, the chosen health problems are included, and if you get affected by any of the pre-selected conditions, you can claim your insurance. Hospitalization is not required to file a claim under this type of insurance policy. Here are some examples of diseases that are covered in Critical Care Insurance.

• Major organ transplant
• Cancer
• Kidney failure

Senior Citizen Healthcare Insurance

This type of Healthcare Insurance in India provides coverage to people who are 65 years and above. This plan offers you coverage for the cost of hospitalization and medicines, whether it arises from a health issue or any accident. It covers hospitalization expenses as well as post-treatment costs.

Factors to be considered while choosing insurance plan

Age: There are various plans that depend upon the age of a buyer, and their premiums, waiting periods and renewability also play a role.

Medical History of Family Members: One must consider and discuss the medical history of the family members as it can impact the premium of the policy. If any of the family members is already suffering from a health problem, then the possibility of claiming the insurance rises.

Exclusions: A few common exclusions in most of the Healthcare Insurance Policies include pre-existing diseases, pregnancy, cosmetic treatment, medical expenses to treat injuries, alternative treatments, lifestyle-related diseases, limitations on hospital costs, and diagnostic tests. Therefore, the buyer has to discuss these exclusions with the insurance provider.

Waiting Period: The waiting period refers to the amount of time you have to wait to benefit your insurance policy’s benefits. 

Network Hospitals: While buying any Insurance Policy, a buyer must choose the insurance company that covers the widest network of hospitals in their list.

Claim Settlement Ratio: The individual should pick up the insurance company that provides a fast claim settlement ratio.

Demystifying Common Myths about Healthcare Insurance

Healthcare insurance is often misunderstood, leading to myths that can discourage people from getting the coverage they need. Let’s address some of these misconceptions:

Myth 1: Insurance is only for the sick. Even healthy individuals benefit from insurance through preventive care and protection against unexpected accidents or illnesses.

Myth 2: All policies are the same. Plans vary widely in terms of coverage, costs, and benefits. Always review the details before choosing a policy.

Myth 3: Insurance is unaffordable. Subsidies and employer-sponsored plans can make insurance more accessible. Additionally, the cost of being uninsured during a medical emergency often outweighs the premiums.

India is the fifth largest life insurance market in the world's emerging insurance markets, growing at a rate of 32-34% each year. In recent years, the industry has been experiencing fierce competition among its peers which has led to new and innovative products within the industry.

Conclusion

Healthcare insurance is required as the expense of medical operations rises, and individuals require additional protection while dealing with disasters in the healthcare industry. People can pick individual coverage, family coverage, or a critical illness policy for a variety of reasons, but the coverage must be appropriate for the individual. This is because understanding the meaning of terms like premiums, deductibles, and exclusions is quite useful when making a decision. Contrary to popular belief, insurance is not just important for the sick, but it is also affordable through government subsidies and workplace programs. India's insurance sector is also growing, and there are numerous options for obtaining the necessary insurance for life and property, which can assist in providing security and a reasonable level of protection.