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    Basics of Health Insurance

    Health Insurance By S. K.Sethi , Expert Content / Dec 06, 2010
    Basics of Health Insurance

    Learn the Basics of Health Insurance through expert help.

    Basics of Health insurance

    Why do I need Health Insurance?

    If you have lots of money then maybe you do not need any insurance as you are in position to pay out of your savings or wealth to Doctors / Consultants / Hospitals/ Physiotherapists for their fees/charges / medicines / surgery etc.

    If you believe in monthly or yearly budgeting, believe in savings for your child education or for your retirement then you must buy Health Insurance.

    In case you are covered for health coverage by your employer (own scheme or health insurance policy issued by an Insurance Company) then it is you call whether you should buy additional coverage or not.

    In case you are not covered by your employer then by buying health insurance you are buying peace of mind as well as protecting your savings because health Insurance in India is really very economical.

    For a person of age 25 years most of the Insurance companies give coverage for Rs. 1 lakhs for full year and that too by charging Rs. 1400 (it can be as low as Rs 900 also)only.

    This coverage will take care of you hospitalization needs due to illness / accident in a hospital for sum of Rs. 1.00 lakhs.

    Assuming you do not have any health insurance coverage then you will have to pay Rs. 1.00 lakhs yourself and it can be out of you savings / selling units /shares/mutual funds or use the credit card or even by going to Chit Fund. In most of the cases either you will lose money or pay high interest in one form or another.

    Health Care Inflation

    The cost of health care is increasing year by year at of 15%. Some treatment which was costing Rs. 20,000 to Rs. 35000 three years back is now costing Rs. 60,000 to Rs. 85,000.When your age goes up then may be the Insurance company will not be keen on insuring you. In most of the cases it has been seen that significant sum is spent on health care during last 6 to 12 months of life. If you will have the coverage –may be you will get the treatment.

    Modern life style / work pressure / increased traffic and more time being spent on travel to and from office can result in certain diseases which we used to thing were diseases of 50 yrs + persons, and hence needed for hospitalization. We come across food poisoning or dehydration cases also being referred to hospitals and for that one may need 1 or 2 days stay in the hospital. Hernia /prostrate/knee transplant are age related diseases and one may have go for the same if one is blessed with long life. The choice is yours.

    It is always better to cover the unexpected risk of ending up in the hospital by having health insurance.

    Cashless Hospitalisation

    As the name suggests it means getting hospitalization services without payment of cash. It means some one else is making payment on your behalf and in this case it is Insurance Company from whom you bought the Health Insurance policy.

    If we go into details then we find a person may go is hospital under 2 circumstances;

    Planned Hospitalization

    When a parson has gone to family physicain, undergone some pathological tests /xray/ultrasound, may be CAT Scan or MRI and then it is decided by a surgeon that on a specified date and in a specified hospital surgery will be performed .

    Patient is advised that he will get admitted in the hospital on a specified for preoperative tests /preparations.

    Unplanned Hospitalization

    This arises due to accident or one may be admitted into a hospital to take care of emergency which has arisen due to case like appendicitis / heart attack /brain hamerroage /paralysis etc. In this case either a doctor or the family members decide that the patient should be rushed to the hospital to save his life.

    The methodology followed by Insurance company / TPA is that at the earliest they should be informed;

    •    Patient name
    •    Policy no
    •    Reason / disease /
    •    Doctor who has recommended hospitalization
    •    Name / Location of Hospital
    •    Treatment being given /to be given and by which doctor
    •    Estimated cost

    You can well imagine that Insurance company needs this information so that they can inform the hospital that such and such patient to be admitted on such and such date is covered unto Rs. xxxxxxxx and the bill be sent to insurance company / TPA for payment.

    In the case of planned surgery it is possible to go in for information and Insurance Company sends its instructions to hospital to provide cashless hospitalization.

    Now let us take the case of accidental victim now the hospital may ask for advance to start treating the patient as;

    •    Hospital is not on the list of empanelled hospitals with insurance company
    •    They do not know whether Insurance Company is agreeable to pay the bill

    The first objective should be to save the patient

    As early as possible the details as mentioned above can be communicated to insurance company /TPA and they can give instruction to hospital for cash less settlement.

    In case the insurance company does not give instruction for cashless settlement then the patient can pay the bills and submit the bills along with claim form/documents to insurance company or TPA for payment.

    Relevance of Health Insurance in India

    Most of the government /charitable hospitals have started charging for various services being offered by them like:

    •    Doctor fee
    •    Consultant Fee
    •    Pathological test charges
    •    X ray charges
    •    Surgery
    •    OT charges

    Swine Flu is expected to cover 1/3 rd of world population in next 2 years .Each and every one among us is prone to suffering from this.

    If you as an individual and wish that you should be treated in a good hospital ,if you catch swine flu that it is desirable that you should have health Insurance policy to take care of treatment.

    The common sense says that in the present days every one should have health insurance.

    Choose the Right Health Insurance Plan?

    For choosing Health Insurance policy you have to consider

    •    Who are all to be covered (age?).
    •    What is the sum assured for each one?
    •    How much sum you can allocate out of your budget for buying insurance.
    •    Once you have decided then you can look at options available to you.

    Broadly speaking the companies /rates is divided into;

    •    Those who are up to 45 years age.
    •    Those who are up to 45 year to 60 years.
    •    Those who are over 60 years.
    •    In case some family members are over 60 years then they may be eligible for senior citizen policy .Depending on company selected medical tests is to be conducted.
    •    Decide.
    •    Generally those who are 45 years + also need medical examination.
    •    A family where all the members who are less than 45 years then they have a wide choice and possibility of lover premium.
    •    As the age goes up the choice of insurance companies starts getting reduced and rates become more or less same.
    •    There is a wide choice of insurance companies and a member having pre existing disease may need extra coverage.
    •    At present 16 General Insurance companies and 2 stand alone Health Insurance companies offer Health Insurance as a product.

    S.K. Sethi, Vice President of Insurance Foundation of India answers most frequently asked questions about Health Insurance.


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