Be prepare for huge medical expenses or opt for health insurance

Insurance | admin | March 18, 2011 at 11:31 am

If onion prices didn't make you cry, your hospital bills will definitely make you shed a few tears — thanks to rising headline inflation, which is not only about Wholesale Price Index (WPI), Consumer Price Index (CPI) or food inflation. There are various aspects to this simple economic indicator, which simply reflect the value of money at this point of time. Soaring headline inflation has not even spared healthcare expenses.

For example, the increase in average claimed amount for circulatory diseases, which mainly includes cardiac problems and paralytic stroke, increased by 56.99% in 2009-10 compared to 2007-08 , according to the Insurance Information Bureau (IIB) data.

The spurt in healthcare expenses is not in your hands, as it is a necessary expense. If you have to undergo a certain treatment, you have no choice but to foot the bill. At the same time, you don't want to compromise on the quality of the treatment just to save a few bucks. You can definitely take certain proactive measures, which can help you tackle healthcare costs in an effective manner.

Go for a bigger medical cover

You should look at the annual limit of your policy. According to experts, if you hail from a small- or mid-sized town, you should take a cover of Rs 2-3 lakh. If you live in a metro, then you should not look at a cover of less than Rs 4-5 lakh.

Don't skip the fine print

Insurers have introduced sublimits in mediclaim policies to tackle the rise in healthcare costs. The most common sublimits are room rents, doctors' fees and diagnostics. If you have a sum insured of Rs 1 lakh and the insurer has capped your room rent at 1-1 .5% of the sum insured , then your room rent cannot exceed Rs 1,000. If it exceeds the specified amount, then you have to pay the balance from your pocket.

"If there is a sub-limit on the room rent or the doctors' fees, the ultimate pay out will be much lesser than the sum assured ," says Sanjay Datta, head, health insurance, ICICI Lombard General Insurance. Similarly , insurers also impose a sublimit on doctors' fee at 25-30 % of the bill amount. Check the date from when the policy will begin paying (some have a waiting period before the cover begins) and what all is covered or excluded from the cover.

Take individual mediclaim

It helps if you distribute your healthcare expenses between two covers. In case you have a major expense and exhaust your limit on the group cover, then you can have an alternative product to cover the rest of the expenses. Says Rahul Aggarwal , CEO of Optima Insurance Brokers, "I advise my clients to go for a standalone health policy over and above the employee health cover, which would cover his family as a whole.

The need for this cover will be felt, especially , in case of a job loss or a job transition. In such cases the employer's cover will lapse and the new individual mediclaim will be expensive, especially if the customer is over 40-years old." The same logic also applies at the time of retirement. It is difficult or rather impossible to get a health cover at that age as you would be covering almost all the pre-existing diseases mentioned in any of the health insurance policies.

Source: Economic Times