You may know someone who battled a serious illness like cancer. You saw them struggle with fear and pain and watched them overcome fatigue and nausea. Hopefully, they had health insurance and did not have to worry much about the medical bills.
But is that usually the case in India?
A recent study published in The National Medical Journal of India concluded that out-of-pocket expenses on healthcare are a burden not only for the poor but also for the middle classes in India.
It found that among rural respondents, 51.3% were employed before a serious illness but only 24.4% were employed after. For urban respondents, these figures stood at 65.6% and 23.4%. A significant decrease was also found in the mean number of earning members per family after the illness.
You may think that this financial burden results from hospitalization expenses. You would be wrong. Data compiled by the Public Health Foundation of India indicates that 55 million Indians were pushed into poverty due to out-of-pocket health expenses, and 38 million (69%) of them were impoverished due to expenditure on medicines alone.
A recent report by Towers Watson stated that India has the highest rate of medical inflation in the world. Another study published by Mercer Marsh in 2018 found that medical inflation in India is likely to be twice the general inflation in the economy. While the medical advances made over the last decade mean you are more likely to survive a serious medical condition, it has also made accessing the best healthcare costlier.
As the out-of-pocket expenses are high, most households must either dip into their savings or borrow to meet these. Surprisingly, the trend holds across all economic classes and the rural-urban divide. The table below shows the percentage of hospital expenses that were made by dipping into savings and borrowing, according to the NSSO date:
While group insurance plans are useful, they hardly provide sufficient coverage.
On average, the cover provided through such plans is around Rs. 2 lakh. The escalating healthcare costs, as outlined earlier, mean that the amount will be exhausted quite fast during an emergency.
For example, a single cycle of chemotherapy can cost between Rs. 63.500 and Rs. 1.9 lakh. The cost of angioplasty (one stench) can run over Rs. 4 lakh.
Even when you do have a high sum insured through corporate health insurance, you should remember that the cover is in force only as long as you are in employment with the current employer. You will have no cover between jobs. Further, the cover may not extend to your family.
The primary benefit of health insurance is the ability to access the best medical care without straining your finances. A typical health insurance plan would cover you against hospitalization expenses including pre- and post-hospitalization expenses arising from the same cause, daycare procedures, domiciliary expenses, and ambulance charges at the very minimum. With the expenses taken care of, you can focus on a speedy recovery.
Have you ever had to scramble for cash in the middle of the night because a loved one needs to be hospitalized? Have you had to reach out to your friends and family to arrange for the monies in the time of a medical emergency?
Cashless hospitalization helps you avoid such a situation. Most insurance providers partner with a network of hospitals around the nation to help you receive health services without having to pay any cash out of your pocket. The service is available for both emergency and planned hospitalization.
As stated earlier, group insurance cover provided by employers is hardly sufficient. Further, it does not allow you to tailor the cover to your particular needs. With an individual health insurance policy, you not only enjoy a higher coverage but can ensure that you are sufficiently covered for any conditions that you may be susceptible to.
Last, but not the least, is the income tax benefit you can claim on the health insurance premium you pay. Under Section 80D of the income Tax Act, you can claim deductions for:
Remember that even if you have enough monies saved to cover all your medical expenses, burning it away during an emergency is not a viable option. This is because it will take you years to build the same level of savings again.
Buy a health insurance policy today to ensure that your finances are secure during a medical emergency. It would also ensure that you and your loved ones can access the best available medical care in the hour of need, without having to worry about the escalating costs.
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