While you can't avoid spending on health, there are several ways in which you can lighten the burden
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 . 2-3 lakh. If you live in a metro, then you should not look at a cover of less than . 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 1 lakh and the insurer has capped your room rent at 1-1.5% of the sum insured, then your room rent cannot exceed 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. We 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.
BUILD A KITTY FOR OLD PARENTS
Mediclaim covers for senior citizens come with a heavier price tag for senior citizens whether it's a new policy or renewal. The industry experts justify the rise in premium cost as accounting for the risk factor. For example, if you paid 1.5% of the sum assured as a premium at the age of 25 years, the premium amount can shoot up to 8% of the sum assured when you turn 60. If you don't have a financial constraint, then you should sign up for a mediclaim. Even if you exhaust the limit on one cover, you will have a back-up option although it is an expensive affair. The second option is to build a contingency fund just to fund your healthcare expenses. If senior citizens don't want to depend on their children, they should ideally build a corpus for healthcare expenses over and above the regular retirement kitty.
MEDICAL TOURISM HELPS SAVE BILLS
It's a viable option. Instead of sticking to a tier-I hospital in a tier-II town, it would be more economical to shift to a lower rank hospital in a tier-II town. But that doesn't imply a compromise on medical facilities. Branded hospitals, which have branches across the country, would most likely follow a standardised tariff structure. Hence, that will not result in significant savings. But there are local hospitals which would offer good medical facilities in the tier II town, which a customer would have to identify. Unlike in developed countries such as US or UK, hospitals are not rated in India. Hence, a customer sitting in Delhi is unable to compare the cost differentials of a four-star rated hospital in Delhi vis-à-vis a four-star rated hospital in Aurangabad. He has to depend on sources such as relatives, friends or the family doctor to make such decisions. A customer should do his due diligence by getting an approximate quote from the TPA and the likely cost of treatment. If the difference is significant, he could opt for a good hospital in a tier-II town.
Today, the insurance sector is flooded with a plethora of options for covering healthcare needs. Both life insurance and general insurance have launched a slew of health insurance products, which covers customers across different age categories. But there are various clauses and sub-clauses that come with such health covers. Also, the funding gap between the mediclaim and the actual bill amount widens as an individual grows older. That does not mean you can avoid taking a mediclaim. You have to take some form of personal health insurance as a base policy. Then you should augment that policy with additional savings if required. Health is wealth. So don't let your wealth erode because of health reasons. Be financially prepared to fight various illnesses.
