Knowledge of health insurance terminologies helps in better selection of coverage, features and benefits best suited for one’s needs.
By Vijay Sinha
The rapidly increasing cost of healthcare in India has become a challenge for many. It is alarming to know that majority of the Indian population do not have a Health Insurance policy. The primary factor is arguably a lack of awareness about the importance of health insurance. Even among those who recognize its importance, most consider it to be an expense. Instead of buying health insurance in advance, many Indians either dig into their savings or opt for loans at the time of medical emergency.
People also find it very perplexing to understand the jargonized world of Health Insurance. This leads to a perception about Health Insurance being an opaque Cocoon, which is difficult to look through or impregnate, to understand the nuances.
Here is a ready reckoner for deconstructing this Cocoon:
Any Health Insurance Policy has numerous features, which are usually built around the inference that any medical emergency would lead to a hospitalization. This covers expenses related to room rent, doctor fees, medicines, laboratory investigations, etc. incurred for hospitalization of more than 24 hours.
Usually in case of medical emergencies, there are situations or treatments, which may fall outside the purview of Inpatient Hospitalisation. To cover such costs, many of the contemporary Health Insurance companies provide additional coverage over and above the Inpatient hospitalization coverage.
Domiciliary Hospitalisation Coverage – Coverage for the expenses related to medical treatment taken at home for more than three consecutive days as recommended by the Treating Doctor/s in instances where the patient cannot be transported to the Hospital or there is unavailability of room in the hospital.
Day-care Hospitalisation Coverage – Coverage for the expenses related to surgical treatment and procedures where admission and discharge happen on the same day.
Pre–Hospitalisation Coverage – Coverage for the expenses related to consultations, medicines and diagnostics before admission to the hospital for a certain number of days ranging from 30 to 90 days.
Post-Hospitalisation Coverage – Coverage for the expenses related to consultations, medicines and diagnostics after discharge from the hospital for a certain number of specified days ranging from 30 to 180 days.
In addition to the above coverage, some health insurance plans provide the following broad choices:
Choice 1 – Enhancement of Features/Coverage:
A- Waiver of mandatory ‘Copay’ – ‘Copay’ is a feature in which the customer must pay a percentage of the claim payable amount. Under this feature, the customer has the option to waive the Copay with a marginal increase in the premium amount.
B- Reduction of the waiting period for pre-existing diseases – If one has a pre- existing disease like Diabetes, there is an inbuilt waiting period for this disease to be covered. Under this feature, one can reduce the waiting period with a marginal increase in the premium amount.
Choice 2 – Lowering the premium amount by reducing the coverage
A- Deductible – Deductible, as an option, helps reduce the premium. Deductible is the amount chosen as the expense of hospitalization the customer is willing to bear. Higher the deductible, lower is the premium.
B- Voluntary Copayment – ‘Voluntary Co-Payment’ is a deductible, which is a percentage of the claim amount and not a fixed amount. One can choose a Co-Pay percentage to reduce the premium.
C- Room Rent Capping – In most of the hospitals, the expenses are linked to the category or type of the room, viz. General, Shared, Private, Deluxe etc. By capping the room rent, the insured/patient fixes an upper limit to it payable under the policy. As a result, the Inpatient expenses that are linked to the room rent also get capped. Hence, lower the room capping, lower is the premium. Based on the city of residence, one can decide to cap the room rent.
Choice 3 – Add – on coverage over and above the core coverage
A. Organ Donor Expense Coverage – This benefit covers the medical and surgical expenses of the organ donor when harvesting for a major organ transplant for insured.
B. Critical Illness Coverage – If diagnosed with any of the listed Critical Illnesses during the policy period, a lump sum equal to the Critical Illness Sum Insured selected will be payable.
Knowledge of Health Insurance terminologies helps in better selection of coverage, features and benefits best suited for one’s needs. A health insurance plan should have the option to choose one’s own covers. This enables in opting the essential coverage only that will also increase or decrease the sum insured. Many of the new- age contemporary health insurance products provide the above-mentioned choices on the features, which empower the insured with the flexibility to choose. Hence, it is recommended to avoid the risk of buying pre-packaged health insurance.
(The author is MD and CEO, COCO by DHFL General Insurance)