Life for Gopal was sipping tea in the mornings with his newspapers. His balcony, overlooking the park, was an ideal retreat to soothe frayed nerves, although Gopal seldom had those.
His office was nearby and being in a small town, he could reach either way in 20 minutes. A picture of contentment, if there was one.
But these days, Gopal has turned jumpy. He is irritable very often and gets into arguments with his colleagues. His bosses have noticed his change of demeanour and have mildly brought it to his notice too. But, Gopal can’t help it.
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It all started when his wife had a heart attack. Gopal refused to believe the news when his neighbour called around 3 pm that afternoon to say his wife has been admitted in the hospital and the doctors suspected a heart attack. Mohini and heart attack? After all, she was always so strict about her diet and had a lean frame, and there was no prior indication whatsoever of any malady.
But, it was. Gopal almost had an attack himself when the doctor said she might have had more than one attack in the past couple of days. It was diagnosed later through angiography that there was one severely blocked artery and one that was partially blocked. Angioplasty had to be done. Gopal consented, somewhat relieved that it would be a non-invasive procedure.
But a bolt from the blue came with the bill the hospital presented —- a whopping Rs4.15 lakh. And they hadn’t even conducted an operation (he learnt later that the cost was so high precisely because it was non-invasive)! The medicated stent cost Rs1 lakh; the doctors’ fees were Rs1 lakh more; there were so many other charges that brought in the rest.
Gopal’s medical insurance would pay him only Rs2 lakh. So he would have to bear the rest.
He rued ignoring his agent’s advice that the cover was very low and he should increase it. Given the cost of medical treatment these days, it helps to have a bigger medical cover —- typically, Rs5 lakh for adults and Rs3 lakh for children — Dinesh had said.
With all his family members in good health, why waste it on insurance, Gopal had asked himself then. Only if he had factored in an emergency of this order!
In fact, Dinesh had also suggested a critical illness cover, which he turned down. That would not have covered Mohini’s condition. But, it would have certainly come in handy if an open-heart surgery had become necessary.
Much as Gopal wishes Mohini would not require any further medical attention in future, he can’t help cursing himself for being under-insured. Not only did he have to shell out Rs2.15 lakh from his pocket, but has also got to continue spending on the medicines which she must continue to take.
Many came forward to help, though he quickly paid them back by taking a personal loan at an interest of 15% per annum. Now, the loan has become a burden. He has to pay Rs5,115 every month for 60 months.
Worse, Dinesh has told him it would not be possible to enhance the insurance cover immediately, though the existing cover has been renewed.
No wonder, Gopal has become irritable. The morning tea doesn’t taste as good any longer. The newspapers have failed to grip him. The park in the foreground, which he used to gaze at endlessly, has no appeal left.
In the mornings, he just paces up and down the hall, thinking how to make up the extra expenses of about Rs7,000 a month (towards EMI and medicines). He has started giving lectures after work, which saps him of whatever energy he has left. He hates the evenings.
And the last few days, he has started hating the hospital ceiling, for that is all he is able to see. He had passed out in the office and they admitted him here. The doctor fortunately diagnosed it as just stress and high blood pressure. He would be discharged this afternoon.
Published in DNA Money on 30/12/2010
Showing posts with label medical insurance. Show all posts
Showing posts with label medical insurance. Show all posts
30 December, 2010
28 August, 2009
Get medical cover to avoid a hole in the pocket
Taxes and death are the only certainties in life - we have heard that before. And one more to that – Medical situations, that include a stay in the hospital, is also almost a given for everyone, at sometime in life. The problem is that we do not know when that may happen. Medical insurance comes in there.
But, which kind of medical insurance is appropriate? Most people go with a medical insurance policy, which again goes by the generic term “mediclaim”, though it a product of the PSU insurance companies. Let’s see what a medical insurance from a General Insurance company covers.
What it covers?
1) Hospitalisation for more than 24 hours, which will cover room & board, doctor’s fees, ICU charges, nursing expenses, surgical fees, Operating Theatre expenses etc.
2) Pre-hospitalisation expenses on medicines. It is typically between 30-60 days.
3) Post-hospitalisation expenses on medicines. Typically between 60-90 days.
4) A number of daycare procedures ( over a hundred in most cases ) – that require less than 24 hours of hospitalization. Due to medical advances many treatments do not require hospital stay and hence would not have been otherwise covered under medical insurance.
5) Most policies also allow complimentary health checkup once in a few years, upto a certain limit, subject to conditions like certain number of claim-free years.
6) Again, ambulance charges are also paid by some policies
7) Some policies give a cash allowance for the days of hospitalization, to cover various incidentals like travel, out of pocket expenses & stay of relatives etc.
Other features & benefits
• Medical insurance is typically a yearly renewable contract. There are however policies which can be taken for upto three years, at a go too.
• No medical tests are required for upto 45 years of age. Application processed based on one’s health status declaration.
• Now Sum Assured of upto Rs.10 Lakhs is available in most policies
• Individual & floater policies are available, with most companies
• Cashless hospitalization is a reality in most cases today, giving unprecedented benefits to the policy holders.
• 5% bonus for claim free years, allowable upto 1.5 times of the Sum Assured opted for initially
• Family discount of upto 10% is applicable
• One can take treatment from a non-network hospital in which case the expenses will be reimbursed. But, most companies impose a co-pay option of between 10- 20%, as in these cases the insurance company would not have the advantage of negotiated, better rates like in a network hospital.
• Claim settlement has now been taken over by the companies themselves in many cases, to ensure better service & exercise better control. In others, it is done through a Third Party Administrator ( TPA).
Exclusions & conditions
• There is no-claim period of 30 days ( typically ) when one goes for a policy.
• Pre-existing illnesses are not covered in the first year. Most policies cover pre-existing illnesses only after 2-4 years
• Only Allopathic treatment will be considered for claims
• Certain conditions ( like hernia ) & surgeries/ procedures which can be planned ( like Angiogram etc. ) are excluded for a much longer period – typically a year. There are policies which have upto 4 year waiting periods for specific conditions – like joint replacement surgery
• Only treatments within India are covered
• In some policies, there are sub-limits on how much can be claimed as room rent, ICU expenses , doctor’s fee etc. This can limit the amount of claim, even though the expenses are well within the Sum Assured
• Renewal of policy till a certain age. This can be between 70-80 years, depending on the policy.
Policy renewability
Policy renewability was a contentious issue for Medical Insurance policies. However, IRDA has issued a circular that a company cannot deny renewal or force the policy holder to move to another policy, just because there was a claim in the prior years. This is com
Income tax benefit
Premium paid for medical insurance comes under Sec 80D ( as a deduction). Upto Rs.15,000/- pa can be claimed by an individual and Rs.20,000/-pa can be claimed by a Senior Citizen. Additionally, a medical insurance premium paid for ones’ parents, upto Rs.15,000/-pa can also be claimed under the same section.
Discussion
For most people, this kind of policy will be good enough, since it covers hospitalization, pre & post medications, daycare procedures & other facilities. Policy renewability is a positive development. When taking a policy one should not go by the premium alone. A proper understanding of the benefits offered is a must – for instance, if one policy covers pre-hospitalization of 60 days & post hospitalization expenses upto 90 days, it may be better suited over a cheaper policy that covers these for a lesser number of days. One needs to look at the offering in totality, before deciding.
There are however certain things a typical medical insurance may not address. A) If one wants to enhance the coverage, it may still pose a problem ( due to claim history ). B) Also, if the policy term is only till 70 or 75 years, it poses a problem - as beyond that period one has to remain without any cover at all and be vulnerable. This is probably the time when medical attention will be most required. C) In many diseases and conditions, medication and attention will be required on an ongoing basis. In extreme cases, it could diminish the person’s ability to earn.
The other aspect that is quite common is the overcharging by doctors & hospitals, which is detrimental to the insurer & insured. It is detrimental even to the insured as the coverage amount in real terms diminishes. Many insurance companies have addressed this by entering into a contract with their network hospitals and fixing rates. However, the doctors, surgeon, anesthetist charges vary and in such situations they are prepared to engage only if the patient is from the first / premium class room. So, issues exist even today which would probably get sorted out in future. As of now, one needs to be alive and aware of all the benefits a medical insurance offers, limitations & the problems.
Could some of these be eliminated? Can it be addressed through some other product? Will some other type of offering be more cost effective? There are many other insurance options available today – for Critical illness, senior citizens accident related, hospital reimbursement , top-up. How will these help? Watch this space.
But, which kind of medical insurance is appropriate? Most people go with a medical insurance policy, which again goes by the generic term “mediclaim”, though it a product of the PSU insurance companies. Let’s see what a medical insurance from a General Insurance company covers.
What it covers?
1) Hospitalisation for more than 24 hours, which will cover room & board, doctor’s fees, ICU charges, nursing expenses, surgical fees, Operating Theatre expenses etc.
2) Pre-hospitalisation expenses on medicines. It is typically between 30-60 days.
3) Post-hospitalisation expenses on medicines. Typically between 60-90 days.
4) A number of daycare procedures ( over a hundred in most cases ) – that require less than 24 hours of hospitalization. Due to medical advances many treatments do not require hospital stay and hence would not have been otherwise covered under medical insurance.
5) Most policies also allow complimentary health checkup once in a few years, upto a certain limit, subject to conditions like certain number of claim-free years.
6) Again, ambulance charges are also paid by some policies
7) Some policies give a cash allowance for the days of hospitalization, to cover various incidentals like travel, out of pocket expenses & stay of relatives etc.
Other features & benefits
• Medical insurance is typically a yearly renewable contract. There are however policies which can be taken for upto three years, at a go too.
• No medical tests are required for upto 45 years of age. Application processed based on one’s health status declaration.
• Now Sum Assured of upto Rs.10 Lakhs is available in most policies
• Individual & floater policies are available, with most companies
• Cashless hospitalization is a reality in most cases today, giving unprecedented benefits to the policy holders.
• 5% bonus for claim free years, allowable upto 1.5 times of the Sum Assured opted for initially
• Family discount of upto 10% is applicable
• One can take treatment from a non-network hospital in which case the expenses will be reimbursed. But, most companies impose a co-pay option of between 10- 20%, as in these cases the insurance company would not have the advantage of negotiated, better rates like in a network hospital.
• Claim settlement has now been taken over by the companies themselves in many cases, to ensure better service & exercise better control. In others, it is done through a Third Party Administrator ( TPA).
Exclusions & conditions
• There is no-claim period of 30 days ( typically ) when one goes for a policy.
• Pre-existing illnesses are not covered in the first year. Most policies cover pre-existing illnesses only after 2-4 years
• Only Allopathic treatment will be considered for claims
• Certain conditions ( like hernia ) & surgeries/ procedures which can be planned ( like Angiogram etc. ) are excluded for a much longer period – typically a year. There are policies which have upto 4 year waiting periods for specific conditions – like joint replacement surgery
• Only treatments within India are covered
• In some policies, there are sub-limits on how much can be claimed as room rent, ICU expenses , doctor’s fee etc. This can limit the amount of claim, even though the expenses are well within the Sum Assured
• Renewal of policy till a certain age. This can be between 70-80 years, depending on the policy.
Policy renewability
Policy renewability was a contentious issue for Medical Insurance policies. However, IRDA has issued a circular that a company cannot deny renewal or force the policy holder to move to another policy, just because there was a claim in the prior years. This is com
Income tax benefit
Premium paid for medical insurance comes under Sec 80D ( as a deduction). Upto Rs.15,000/- pa can be claimed by an individual and Rs.20,000/-pa can be claimed by a Senior Citizen. Additionally, a medical insurance premium paid for ones’ parents, upto Rs.15,000/-pa can also be claimed under the same section.
Discussion
For most people, this kind of policy will be good enough, since it covers hospitalization, pre & post medications, daycare procedures & other facilities. Policy renewability is a positive development. When taking a policy one should not go by the premium alone. A proper understanding of the benefits offered is a must – for instance, if one policy covers pre-hospitalization of 60 days & post hospitalization expenses upto 90 days, it may be better suited over a cheaper policy that covers these for a lesser number of days. One needs to look at the offering in totality, before deciding.
There are however certain things a typical medical insurance may not address. A) If one wants to enhance the coverage, it may still pose a problem ( due to claim history ). B) Also, if the policy term is only till 70 or 75 years, it poses a problem - as beyond that period one has to remain without any cover at all and be vulnerable. This is probably the time when medical attention will be most required. C) In many diseases and conditions, medication and attention will be required on an ongoing basis. In extreme cases, it could diminish the person’s ability to earn.
The other aspect that is quite common is the overcharging by doctors & hospitals, which is detrimental to the insurer & insured. It is detrimental even to the insured as the coverage amount in real terms diminishes. Many insurance companies have addressed this by entering into a contract with their network hospitals and fixing rates. However, the doctors, surgeon, anesthetist charges vary and in such situations they are prepared to engage only if the patient is from the first / premium class room. So, issues exist even today which would probably get sorted out in future. As of now, one needs to be alive and aware of all the benefits a medical insurance offers, limitations & the problems.
Could some of these be eliminated? Can it be addressed through some other product? Will some other type of offering be more cost effective? There are many other insurance options available today – for Critical illness, senior citizens accident related, hospital reimbursement , top-up. How will these help? Watch this space.
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