The coronavirus pandemic has rattled the world’s heath industry and India is no exception. With only 14% to 16% of Indians having health insurance and the Indian federal government spending on health at roughly 1.13% of the GDP as of 2019, the case for opting for health insurance as a must-have financial service is impregnable.
A population of 1.38 billion people requires tailor-made efforts to fill significant gaps that exist in the healthcare facilities available to Indian citizens.
The Government’s National Health Protection Mission, called Ayushman Bharat Prime Minister’s Jan Arogya Yojana, is aimed at providing insurance to the underserved.
Another popular project of the government is the Rashtriya Swasthya Bima Yojana for insurance to the workers in the unorganized sector which too attempts to cover the twin challenges of affordability and accessibility.
While the two government programmes are works in progress, the citizens out of the purview of the two have private health insurance as their only resort to protect themselves.
Let’s look at what health insurance does in times such as the COVID-19, and what your policy should look like.
Benefits of a Health Insurance Policy
Health insurance is a kind of policy that helps you cover medical expenses by paying a pre-decided sum called a premium that you pay in defined time intervals to ensure benefits of a medical cover.
Amid uncertainties surrounding unforeseen medical exigencies, getting a health insurance policy to help you aid payments of your medical expenses could be a wise choice because of reasons like:
Health Insurance Helps Identify Diseases Early
COVID-19 is a disease that takes its own course of time to reveal the presence of infection. People who have pre-existing medical conditions or comorbidities have a bigger health risk and are having to take extra precaution to avoid getting infected.
In such times, a health insurance policy helps you take medical tests without costly payouts to calm down your fears and rule out possible infections. Timely medical tests can also help you timely treat comorbidities, which would otherwise prove to be lethal if you get the coronavirus infection.
A health insurance plan that helps you take multiple medical tests can be useful during the COVID-19 such that you don’t end up ignoring minor symptoms to avoid costly medical tests. This is especially useful in the cases of your elderly parents or spouse and children are most susceptible to risk.
Health Insurance Helps Combat Medical Inflation
The coronavirus medical emergency has caused anarchy in the healthcare sector in India as hospitals struggle to admit high volumes of patients and testing or treatment do not have definite costs detailed.
With each passing week, a new medical innovation is experimented. Such trials require high expenditure also on the consumer’s side and they need to factor in the cost of this medical inflation to ensure their budget does not get dented.
For treatments besides the coronavirus too, health insurance policies work well to safeguard consumers from the inflation arising out of the spurt in innovation and development in the medical technology space.
Mayank Batwal, the CEO of Aditya Birla Health Insurance, cautions consumers to not treat hospital expenses as their only medical expenses.
“The expenses for a doctor’s consultation, diagnosis tests, ambulance charges, operation theatre charges, medicines, room rent, etc. are also constantly increasing and all of these together can put a substantial strain on your finances if you are not adequately prepared,” says Batwal.
A health insurance policy that allows you to pay an affordable premium to avail advanced medical treatments could ensure costs associated with your health are not too heavy on the pocket. This is especially useful in times of globalization owing to the uncertainty you and your entire family faces.
Health Insurance Protects Your Savings
A medical predicament causes panic and in an attempt to ensure best services, your savings could get drained. A health insurance policy addresses this problem in two ways:
Health insurance policies have different criteria for what services can be cashless and what needs to be paid for. This proves to be especially important at a time when you’re battling life and death situations such as COVID-19.
Among the 30 health insurance companies in India that are allowed to sell insurance, most provide health cards that help track your policy details at the time of availing medical services of a hospital. Depending on which services are permitted by your insurer to be cashless, your hospital can help you evaluate your expenses, pay timely and at the same time protect your savings.
Health insurance policies help you save taxes depending on some factors detailed by the Income Tax Department of India. Consumers can avail tax deductions under Section 80D by paying via demand draft, cheques, net banking, a debit or credit card payment and claim tax exemption.
Some exceptions to these benefits are:
- Health insurance premiums paid in cash are excluded from the tax exemption clause.
- Health insurance premiums cannot be claimed by a third party.
- Tax exemptions are valid only on the premium and not on charges such as the Goods and Services tax or processing fees, etc.
- Add ons to your health insurance can be claimed for tax deduction depending on the terms and conditions of your insurer.
What Should Your Health Insurance Policy Look Like?
Aditya Birla Health Insurance’s Batwal agrees the majority of Indians are considering health insurance as an “essential” post-pandemic.
Here’s what you should look for:
COVID-19 Specific Health Insurance Plan
Most insurers are offering coronavirus standard health insurance policy, the Corona Kavach.
In June, the Indian insurance regulator mandated all general and health insurers to offer a short-term individual COVID-19 standard health policy with the objective to have a standard product with common policy wording across the industry to facilitate consumers.
The Insurance Regulatory and Development Authority of India set the Corona Kavach policy to have one basic mandatory cover with one optional cover within the sum insured. The premium payable towards this optional cover would be specified separately to enable policyholders to choose and pay based on their needs.
The IRDAI guidelines detailed the policy cover to provide COVID-19 hospitalization charges, home care treatment charges, medical expenses under AYUSH (the Indian government’s alternative medical treatments department turned into a Ministry) and post hospitalization.
However, healthcare is a long-term commitment and the coronavirus pandemic has reinforced the need for Indians to embrace their healthcare needs by protection measures beyond conversation.
Affordable Health Insurance Policy With Incentives
Timely and Affordable Insurance
The pricing of any insurance product is based on the benefits it offers. The insurer needs to choose a policy based on affordability and health status, thinks Upasana Kamineni Konidela, the MD of Family Health Plan Insurance.
She advises opting for a regular health check and understanding your health risk to better your health status. Once that is established, she recommends people choose an optimum cover in terms of sum assured based on affordability.
Kamineni Konidela categorizes timing as key and suggests taking a policy at an early age than pursuing one at a time when you require hospitalization.
Insurance Offering Comprehensive Cover
The cover of the policy being looked at should be comprehensive in terms of no sub limits, lower waiting periods and should be sufficient for the family or an individual, think Pankaj Arora, the MD and CEO of Raheja QBE General Insurance.
One should look at non-medical items being excluded from the coverage and alternatively the policy should offer a fixed daily allowance to cover such out of pocket expenses at a reasonable additional cost, he suggests.
Insurance with Incentives
Batwal thinks while this is an ideal time to opt for a health insurance policy, it is advisable to look at it from a larger perspective and ensure you maximize the value for the investment you make in these financial testing times.
Several products in the market offer a comprehensive cover to aid in prevention, protection, and recuperation. He advises looking for products that provide good financial and other incentives or engagement for you and your family to stay healthy and also support in recovery and recuperation.
Arora recommends looking at incentives such as Cumulative Bonus where the sum insured benefit under the policy increases by a certain percentage for each claim free year.