How To Keep Healthcare Costs Down
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Living expenses have hit an all-time high due to rising headline inflation. Soaring headline inflation means that even healthcare expenses are not exempt. For example, the increase in the average claimed amount for cardiac problems was to the tune of 50-plus percentage points in 2009-10 compared to that in 2007-08, according to the Insurance Information Bureau (IIB) data. This is important to note because, if you have to undergo a certain treatment, there is no alternative to footing the bill. However, one can take certain proactive measures to reduce the hit and tackle healthcare costs in an effective manner as follows:
Medical Tourism
An economical option is to consider shifting to a lower rank hospital in a Class B town rather than opting for a tier-I hospital in a Class B town. This does not mean lesser or inferior medical facilities, though. Moving to a branded hospital chain will not result in significant savings as branches across the country are most likely to follow a standardised tariff structure. There are local hospitals that offer good medical facilities in Class B towns.
Since there is no grading system for hospitals in India, a customer should exercise due diligence by getting an approximate quote from the TPA and the likely cost of treatment. If the difference is significant, one can opt for a Class B town hospital.
Individual Mediclaim
Experts advise going in for a stand-alone health policy over and above the employee health cover, which would cover his family as a whole. The need for this cover is likely to be felt especially in case of a job loss or a job transition. In such cases the employer’s cover will lapse and a new individual mediclaim will be expensive, especially if the customer is over 40 years old. It also helps in case you incur a major expense and exhaust your limit on the group cover. In such an emergency you can have an alternative product to cover the rest of the expenses. Last but not the least, such policies are very useful during retirement because it is difficult, nay, impossible, to get a health cover at that age.
Taking Care of Parents
Mediclaim covers for senior citizens come with a heavier price tag, whether it is a new policy or renewal. Industry experts justify the rise in premium cost as accounting for the risk factor. For example, if you paid 1.5 per cent of the sum assured as premium at the age of 25 years, this premium amount can shoot up to 7.5 per cent of the sum assured when you turn 60. If you don’t have a financial constraint, then you should sign up for a mediclaim. Even if you exhaust the limit on one cover, you will have a back-up option, although it is an expensive affair. The second option is to build an emergency fund just to take care of your healthcare expenses. If senior citizens don’t want to rely on their children, they should ideally build a corpus for healthcare expenses over and above the planned retirement kitty.
Size of Cover
You should look at the annual limit of your policy. According to experts, if you hail from a mid-sized town, you should take a cover of about Rs 3 lakh and if you live in a metropolis, you should consider a cover of not less than Rs 5 lakh.[PAGE BREAK]
Recognise the Caps
Insurers have introduced sub-limits in mediclaim policies to tackle the rise in healthcare costs. The most common sub-limits are room rents, doctors’ fees and diagnostics. If you have insured a sum of Rs 2 lakh and the insurer has capped your room rent at one per cent of the sum insured, then your room rent cannot exceed Rs 2,000. If it exceeds the specified amount, then you have to pay the balance from your pocket. If there is a sub-limit on the room rent or the doctors’ fees, the ultimate payout will be much lesser than the sum assured. Similarly, insurers also impose a sub-limit on doctors’ fee at 25-30 per cent of the bill amount.
Take-home
The gap between the mediclaim and the actual bill amount widens as an individual grows older. Moreover, the policy becomes more expensive. That does not mean you can avoid taking a mediclaim. Maybe you should supplement that policy with additional savings, if required. Clearly the message is: do not let your wealth erode on account of health reasons.