7 Health Insurance myths busted

A study conducted by Bigdecisions.com, a personal finance advice platform, says about 95% of Indians are without adequate health insurance cover to meet some of the most common procedures and ailments. It goes on to state that healthcare inflation is seeing double digit inflation in India*. Health insurance can no longer be viewed just as a tax saving tool, it is a necessity today. As such, the time is ripe to clear the various myths that abound about health insurance. 

Listed below are some of the common myths and the reality regarding them:

1)      I am young and healthy, so I don’t need health insurance.

Well, you could be right about the first part of the statement but the same cannot be said about the latter part. Here’s why:

·      Your health insurance policy also covers accidents. After all, anybody irrespective of age can meet with an accident. Especially if you are young and with insufficient savings, an accident related hospitalization and recovery can be a big setback financially. Similarly, ailments such as dengue, chikungunya etc can strike at any age and may need hospitalization (depending on the severity and complexity one can end up spending Rs 40,000/- to Rs 1,00,000/- or more for dengue related hospitalization). A health insurance policy can come handy during such times.

·       Being young also means that certain chronic ailments such as diabetes, hypertension etc have not reared their ugly heads. In the absence of any pre-existing disease during policy issuance, you are exempted from the waiting period. A waiting period (usually 36-48 months from inception of the policy) is the period during which any claims arising from pre-existing diseases and their complications are not covered.

2)      My Employer already provides health insurance, so I need not bother to buy separate cover.

Some facts to erase this illusion are:

·    As premiums are rising steadily, employers are trying to rationalize the cover provided by adding restrictive factors such as co-payment (payment of some % of the bill by the employee), partial payment of premium by the employee and not covering parents.

·    Most group health insurance plans have modest coverage amounts ranging from Rs 1,00,000/- – Rs 3,00,000/-. As healthcare costs are soaring you need to realistically assess whether your employer’s policy will be sufficient to cover costs of treating critical ailments, major surgeries, procedures such as angioplasty, dialysis etc.

·       If you are between jobs, you will be without cover. In current times, with job security being a concern, buying your own health plan and not relying only on employer’s cover may be a smart move.

·       On retirement, be prepared to foot all medical expenses from your own pocket. At this juncture, buying health insurance may be a very costly due to your advanced age. Also, in case of any pre-existing ailment there will be a waiting period and the policy cannot be used optimally in the initial years. You may even be denied cover in case of adverse health.

3)      Hospitalization is a must for making claim

This is no longer the case. Due to medical advancements, for certain surgeries such as cataract removal or procedures such as angiography, radiography, dialysis, chemotherapy, kidney stone removal etc, the patient can go home after a few hours. These are referred to as day care procedures. Every insurer has a list of day care procedures they cover. Day care procedures are those treatments which can be administered without requiring 24-hour hospitalization.

Further, out-patient treatments such as dental treatment, doctor’s consultation fees, alternative medicine treatments such as ayurveda, unani etc are covered by health insurance plans (varies across plans).

4)     All hospitalization expenses till the sum assured amount can be claimed.

Well, you are sadly mistaken. There are sub-limits on specific treatments, doctor’s consultation fees, pre-planned surgeries such as cataract removal, knee replacements etc. There are room rent limits and other charges such as surgery charges, doctor’s visits, medical tests (even ICU charges in some cases) are at times linked to the room rent and payable in same proportion as room rent.

5)     Pregnancy related claims are not paid.

This is a myth today but was true until a few years back. Health insurance policies now cover pregnancy related claims. Most plans usually have a waiting period of 24-48 months for pregnancy related claims and generally cover only the first pregnancy.

6)     My health insurance coverage begins from day one.

Only accidents are covered from day one. No diseases are covered in the first 30 days of the policy. Other than that, in following scenarios the insurance cover begins at a later date.

Pre-existing ailments – As stated in point one, a waiting period is applicable for all pre-existing diseases and cover starts only after the waiting period is over.

Pregnancy expenses – As stated in point 5, pregnancy expenses are usually covered only after 36-48 waiting period.

Exclusion for specific ailments – Certain ailments such as hernia, tonsillitis, piles, cataract, knee replacement etc are covered after a waiting period of 12 – 24 months.

Thus, it is best to buy health insurance early in life so that you can avail the benefits when you need it the most.

7)     More no. of network hospitals and day care procedures is best.

The network hospital list is not static and sees additions and deletions. There are certain parameters that the hospitals need to fulfill to remain in the list. Sometimes even hospitals deny cashless claims for certain insurance companies/TPAs in case of delayed payment or due to other issues.

Similarly, plans which offer a long list of day care procedures and minutely state what is covered may also have an exhaustive list of restrictions and conditions which in turn can result in high claim rejections. As such you may be better off with a plan that provides broad treatment categories rather than specific ones.

Hope the article above has helped in clearing various myths that you may have on health insurance and helps you in taking a judicious decision regarding your health insurance needs.

*http://www.rediff.com/business/report/perfin-middle-class-indians-do-not-have-adequate-health-insurance/20151125.htm