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Health insurance covers the medical expenses that arise due to illness and can include hospitalization expenses, doctors’ fees, and expenses for the medicines purchased. There are 30 health insurance companies in India offering health insurance products. Out of these 5 companies are standalone health insurance companies and 25 are general insurance companies. The health insurance policy lists the medical benefits that would be provided to a person in case of illness and is an agreement between him and the health insurance company. There are many things a person should consider before selecting a health insurance plan.
A person should buy a health insurance policy because any medical crisis would make the family helpless if they don’t have money for treatment. The only thing is he has to decide whether to buy the individual health insurance plan or a family floater plan.
The family floater plan covers the family members in a single plan while the individual health insurance plan covers only a single individual. In the family floater plan, a single premium is paid and generally depends on the age of the eldest member in the policy. In the individual health insurance plans, there are separate policies in the name of each individual, and the premium depends on the age of the individuals and the sum assured.
A family floater policy is cheaper and covers many persons in a single policy and is good when there are no medical claims. But when a claim is made it becomes difficult to get the amount of cover increased. If a person has less income and small children then a family floater would be useful but if any family member has a bad medical history then individual policies would be better.
A person can take two policies. The senior citizens (father, mother) can be covered in one policy and a family of 4 persons (husband, wife, and 2 kids) in another policy. Nowadays we have parents residing in one city and the children are employed in the other city. The residence is not an issue in the claim settlement. A family floater of Rs. 10 lakh can be considered for persons staying in a metro city and for those in tier-2 and tier-3 cities Rs. 5 lakh family floater would be just sufficient.
The factors on which the health insurance premium depends are–
- Policy duration.
- Past Medical History.
- Body mass index.
- Location where you stay.
- Smoker or not.
- Type of plan that you choose.
The cost of medical tests and doctor’s fees is always rising with time and it is very costly when a person is admitted to a hospital. Health insurance companies have many plans and a person should try to choose the best among these plans.
The factors that a person should consider before selecting a health insurance plan are-
- Credentials of the company-
Before selecting the insurance of a company check for the claims settlement ratio. It is the percentage of claims settled against the claims filed by an insurance company. This is one of the most important factors in selecting a company. As an example, if a company settles 95% of its customer claims in a year its health insurance claims settlement ratio is 95%, while if it settles 90% of the customers’ complaints its claim settlement ratio is 90%. The claim settlement ratio is important because if the insurer does not honor the claim the whole objective of financial security in a health emergency is defeated and if the claims ratio is good you can expect a trouble-free settlement. The insurer should also have a good customer support service so that all your queries are answered.
- Cashless hospital facility-
One of the most common inconveniences that a person faces at hospitals is completing the paperwork and handling the deposits and fees rather than spending time with their loved ones. Sometimes when the amount is big arranging for the cash is also a stress. The cashless claim tries to do away with these problems and makes the process quicker. The health company pays the treatment amount directly to the hospital. The claims settlement process can be long and tedious if you are not aware of the process.
- Inclusions and exclusions in a policy-
A person should always read the inclusions and exclusions in a health policy before finalizing it. There are certain expenses that are covered in the hospitalization of a person for 24 hours or more called in-patient hospitalization. There are medical expenses incurred before hospitalization and after being discharged from the hospital and there are certain things that are not covered in the plan called the plan exclusions. All the inclusions and exclusions should be read and understood so that there are right expectations from the plan.
- Waiting period-
Always check the waiting period in your health insurance policy before purchasing it. The waiting period is the time period after the purchase of a policy when a person can’t claim benefits for certain diseases. The waiting period is different among insurers. A new health insurance plan generally has a waiting period of 30 days which the insured has to wait before he can file for a claim. Some illnesses like hernia and cataracts have a waiting period of two years. The waiting period is applied to pre-existing diseases like diabetes, kidney-related ailments, where the waiting period is generally 2-4 years.
- Sub-Limits on treatment-
The health insurer puts a sub-limit on the policies; that is a percentage of sum assured or a fixed amount which is mentioned in the terms and conditions of the policy. The sub-limits are on room rents, treatment of certain diseases, and post-hospitalization treatment.
Insurers generally keep a sub-limit of 1% of the sum insured for room rent and 2% of the sum insured for ICU. If the room rent is more the policyholder will have to pay from his own pocket.
The insurers have sub-limits for medical treatments like kidney stones removal, tonsils, cataract removal, etc. which is a fixed amount based on the geographical location of a person. The cap of treatment costs differs from insurer to insurer. There are also the sub-limits for after treatment when a person stays at home under medical supervision. The post-hospitalization expenses also have a sub-limit and for the exceeding amount, the person has to pay from his own pocket.
- The Sum insured-
The sum insured is the maximum cost that a person is covered for in any unfortunate event. If it is high the company will pay a higher claim amount and in this case, the premium outgo will be higher too. It is important to choose the right sum insured failing which you will have to pay the balance from your own pocket. A policy with insufficient sum assured defeats the whole purpose of insurance. When the hospital bills are huge it causes stress to the already troubled family. With a reasonable sum assured you are financially relaxed during the troubled times.
- Day care procedures-
Due to the advancements in medical technology the treatments have become much shorter. The daycare treatments require hospitalizations for less than 24 hours and cover treatments like cataract surgeries, dialysis, chemotherapy, radiation therapy, corneal incision, and many others. Daycare treatments involve expenses like diagnostics, medications, hospital admission, and post-hospitalization expenses also. The daycare procedures covered vary from insurer to insurer but most of them cover over 100 daycare treatments.
- Availability of Network hospitals near your location-
All the insurance companies have network hospitals across many places in the country. The hospital with which the insurance company has tie-up is known as a network hospital. Check for the ones that have a hospital near the place where you stay. This would save you the trouble of traveling long distances. A person can claim cashless treatment at the network hospitals and the non-network hospitals do not offer cashless facilities.
- The availability of Add-ons-
The add-ons are the additional benefits that can be availed in a health insurance policy by paying an extra cost in the premium at the time of policy purchase. They are an affordable way to enhance the benefits or the sum insured. The add-ons that you get with the policy are; room rent waiver, maternity cover, critical illness rider, and hospital cash at the time of hospitalization.
- Copayment clause-
When the health insurance has a copayment clause, a person agrees to pay a part of the medical expenses from his own pocket and the remaining is paid by the insurer. Say your insurance policy has a copay clause of 10% and the medical expenditure is Rs 60,000 then you will have to pay Rs. 6000 from your own pocket.
The copayment clause discourages people from making unnecessary claims as they have to pay a part of the money from their own pocket. It also discourages people from going to expensive hospitals for treatment. The disadvantage is that if the copayment amount is huge it would discourage people from seeking medical attention when necessary. A person who understands the coinsurance clause would prefer not to choose such a policy.
- Good customer service-
Healthcare is an industry that is meant for customer service. The aim is to meet the customer expectations and if you don’t meet their expectations even with the presence of good doctors they will not return back. If the customers are happy they would like to return to the same company and are likely to recommend the same to their friends and relatives.
The excellent customer service includes minimum wait time during appointments, a well-trained staff, good service delivery by nurses and technicians; follow-up on appointments, efficient settlement of billing and insurance claims. The staff should be emphatic and caring with the records well maintained and the processes that save time.
What is health insurance portability?
Portability is the process of switching an insurance policy to a new health insurance company from an existing company without losing the benefits like a waiting period, no claim bonus, and free medical check-ups. Any individual or a family policy can be ported and the new insurer has to ensure at least equal to the sum insured of the old policy.
The insurers have to complete portability according to the guidelines of the IRDA. The old policy can be ported only at the time of renewal. A person should at least 45 days before the renewal, write to the old insurance company requesting for a shift specifying the company where he wants to shift the policy and renew the policy without a break.
Health insurance Tax benefits-
The health insurance premium offers benefits under section 80D of the income tax act. The benefits are as given below-
Government health insurance schemes-
There are many schemes of health insurance of the Central and State governments in India. These are available to people of lower-income group and maximum sum assured is up to Rs 5 lakh.
- Ayushman Bharat Yojana.
- Pradhan Mantri Suraksha Bima Yojana.
- Aam Admi Bima Yojana.
- Central Government Health Scheme.
- Employment State Insurance Scheme.
- Universal Health Insurance Scheme.
- Yeshasvini Health Insurance Scheme.
- West Bengal Health Scheme.
- Mahatama Jyotiba Phule Jan Arogya Yojna.
Health insurance is a must and financially helps the person and his family during a medical health emergency. The person should read the terms of the policy carefully before taking the policy and declare his medical history correctly. Choose a health insurance policy from a reliable company and the plan that suits the needs of the family.