Go over and above corporate insurance

Approach anyone for advice on choosing the right health plan for an individual/family and they would undoubtedly suggest you consider one with either low or no deductibles. But is that the right approach?

Today, lifestyle diseases are increasingly cropping up making it a ticking time bomb with an alarming rise in cardiovascular disease, diabetes, hypertension, asthma and respiratory diseases as well as cancer among Indians.

The Indian Council of Medical Research (ICMR) reported an estimated 14.5 lakh new cancer cases in 2016 alone. Indians today are facing more health issues given the hectic, stress filled lives they are living. 

It’s not just the health concerns that are inching upwards but also the healthcare costs. While a common Heart Valve Surgery would cost anywhere around Rs 1 lakh to Rs 3.5 lakh, the cost of a liver transplant will easily reach Rs 30 lakh and up. Even the annual cost for a diabetic comes to Rs 10,000 and a regular full body health check-up is anywhere between Rs 12,000 and Rs 15,000.

Almost every company these days provides healthcare benefits to its employees, with 96% providing for at least hospitalisation cost.

With the increasing healthcare costs and health risks, the cost involved in recovery is a concern for many people when they approach a medical expert. In this situation, does a corporate cover adequately protect you in case of an expensive medical treatment?

While a corporate cover offers the security of being protected from illnesses, it does not cover you across all medical situations. It’s important that one is fully covered in order to combat any unexpected medical circumstance.

Let’s explore this with an example.

Suppose A is diagnosed with a condition that requires him to undergo a sudden Heart Valve surgery, the cost for which comes to Rs 3 lakh. Will his standard group health insurance of Rs 1 lakh be enough to cover him?

Not ideally. In order to cover a treatment of Rs 3 lakh, he will have to take another health insurance policy, the premium for which would come to approximately Rs 6,000 per year.

Or he could take a high deductible health plan of Rs 3 lakh with a deductible of 1 lakh, on his existing plan. In which case, his premium would be nominal.

And since a high deductible cover can be taken on any existing health insurance plan from any provider, it is a smarter and more convenient option to secure yourself for a higher amount with minimum efforts.

What is a high-deductible plan and how it works?

More often than not, your insurance is not enough because it provides cover only up to a fixed amount, whereas, if you have a top-up plan alongside, it can cover you for higher costs as well.

A high deductible top-up plan, which works with your pre-existing insurance plan, requires you to decide a limit called deductible amount.

In case of a medical emergency, the expense up to the deductible amount is paid by you or your company’s health insurance policy and the rest is covered by the top up plan.

A high deductible policy brings down the amount you pay in premium while covering expenses that you may incur towards hospitalisation and other costs. The deductible applies each time you file a claim.

Your company’s insurance policy can come in handy when you pay off the hospitalisation expenses and all other major expenses will be covered by the high deductible policy.

Thus, by investing in an additional, a high deductible plan, you become eligible to receive the below benefits/coverage and thereby ensuring a complete coverage in case of a medical emergency.

n You are prepared to meet any expensive medical emergency

n You save on accruing extra premiums as high deductible plans cost less

n On a personal front, you proactively manage your health and the healthcare cost since you know you will have to bare a share yourself

n One can avail a health deductible cover on an existing policy from any provider.

n You pay less from your pocket because in a high deductible plan the premium is low and the deductible is covered by the existing policy

(The writer is Chief Underwriting Officer at Bharti AXA General Insurance)