Is Your Health Insurance Policy Covered Enough to Fight Medical Inflation?

We all keep hearing about inflation and how it is affecting our daily lives,making bread and butter costlier. It is also affecting household budgets and disturbing a million lives.

However, what nobody talks about is the medical inflation that is even more dangerous given the state of medical & health facilities and infrastructure in our country. While buying health insurance plans for family, medical inflation is something that is not discussed even by the sellers of the policies.

You will be shocked to know that unlike inflation that hovers in the range of 5-6%, medical inflation usually grows in double digits. As per latest estimates, it is elevating at a faster pace. This means that the cost of getting medical treatment is increasing faster than the expense of any other thing in the country. And this is at a time when incomes are not rising fast enough, while insurance policies are also not being bought keeping in mind the medical inflation.

When purchasing a family health plan or an individual insurance policy, we tend to consider only the premium and the coverage amount, but seldom have we followed the methodology to arrive at the coverage amount. The best way to do that is to be aware of medical expenses for various kinds of procedures and treatments undertaken in a hospital.  With advancement in technology, the prices of various surgical procedures are also rising, even though technology should bring down the prices. Wonder why?

The answer is inadequate medical infrastructure and shortage of talented doctors. Add on to this the increase in private hospitals rather than government run facilities and this becomes a recipe for costly medical expenditure. You’ll be alarmed to know nearly 80% of the medical cost is paid by people from their personal pockets. Even if there is a in Health insurance policy in effect, the cover is not in tune with medical inflation. The situation is such that the insurance provider pays only minimal amount of the medical cost and the major chunk has to be borne by the individual from his personal resources.

What is the solution then?

There are a few things you can keep in mind while buying insurance.

Firstly, have a general idea of medical expenses for acute illnesses. It would be a good option to understand how much a cardiac bypass costs or the expenses incurred in getting dialysis or the cost for treatment of cancer including chemotherapy and medications.

Secondly, check out the cover you currently have. Whether an individual or a family health plan, the cover should be in tandem with medical inflation. If you think it is not enough, you can buy a separate health insurance policy for a larger coverage amount, or you can get a top up on your existing plan. Getting a top up is a preferred option as the extra premium will be less than the premium you have to pay for a new policy. Since you’ll be dealing with your current insurance provider, the paperwork as well as the time taken for the policy to be issued will be considerably reduced.

Also, do remember that even if you have an insurance cover provided by your employer, having a separate insurance policy is always preferable to safeguard your interests. You can invest in either an individual health insurance plan or can buy Health insurance plans for a family with adequate cover.

Investing in health insurance has to be thought of decision and shouldn’t be taken in haste. Both direct, as well as indirect costs, have to be considered before buying a health insurance policy. Apart from researching about the best insurance plans and the best insurance providers, an equal amount of effort has to be put in to understand and calculate medical inflation. Once you’re aware of it, then finalize your financial requirements and select the right plan accordingly with the right cover for you and your family members.

Make sure that you have the best family health plan with maximum cover, to live a relaxed and stress-free life.

Harjot Singh Narula

Harjot Narula is founder and CEO of ComparePolicy.com, an IRDAI approved insurance web aggregator focussed on selling online insurance for companies. Harjot has more than a decade of experience in software development and has also spent 5 years in US working for the mortgage and risk management industry.

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