Forewarned is forearmed in health insurance, says economist Priya Desai

 
The benefits and risks of medical insurance and the options available to you

The silver years creep up on us all, sooner than later. And no matter how hard one tries to maintain health and vitality, age-specific health issues begin to rear their head with greater frequency.

Very few silvers in India have medical insurance and that can become a major stress point. Contrastingly, those who have been wise and prudent enough to opt for medical cover find they are on more steady ground.

The simple fact is that age and medical expenses are two aspects that run on parallel tracks; and, in most cases, where one exists, the other follows. Many older people find themselves riddled with various illnesses, some of which are far more complex than rigid muscles and physical aches and pains.

To them, ageing becomes synonymous with escalating doctors’ fees, medication expenses and a string of medical tests whenever their health takes a turn for the worse. Considering this, it makes perfect sense for silvers to ensure that a certain portion of their annual income is channelled towards a comprehensive medical policy.

Medical policies: the cost-benefit factor

In an ideal world, people should obtain medical insurance before they reach the half-a-century milestone. It’s considerably less complex to obtain medical insurance at that age and it won’t burn too big a hole in your pocket either. As age is directly proportional to illnesses and medical conditions, it leads to higher medical claims from silvers. From an insurance company’s viewpoint, senior citizens are more of a liability.

The tax deduction under 80D for the premium paid up to ₹ 30,000 is a good attraction for buying a policy. Annual preventive check-ups are also permissible under this limit.

The providers

Though most companies may not be keen on providing substantial medical cover to silvers, several banks and companies do have medical cover plans for silvers. In fact, according to the new guidelines laid down by the Insurance Regulation and Development Authority (IRDA), health insurance providers will need to cover an individual up to an age of 65 years with lifetime renewability. If health insurance is denied on any grounds to senior citizens, it needs to be in black and white with reasons furnished and recorded, and the criteria of reasonableness and fairness fulfilled.

Public-sector companies that provide medical insurance include National Insurance Company, United India Insurance, New India Assurance and Oriental Insurance, while private-sector companies that provide medical insurance include Max Bupa, ICICI Lombard, Tata AIG, Cholamandalam DBS, Royal Sundaram, AG Health Insurance and Star Allied. Banks that have alliances with insurance companies include Andhra Bank, Indian Overseas Bank, Maharashtra Bank, Indian Bank and Canara Bank. Those who have accounts with these banks can apply for medical insurance for their parents. Despite the fact that the premiums seem pretty manageable, the claim processes are quite arduous and riddled with hurdles.

‘I am different’: competitive variables

Though the medical cover that many companies offer may be in the same range, there are a number of differentiating factors. This makes it very difficult to set comparison specifics. The different factors that can vary by insurer are:

• Age coverage
• Waiting period for pre-existing illnesses
• Requirements of pre-insurance medical tests
• Ailment coverage
• Premium amounts
• Claim payment records
• Claim amounts
• Payment modes
• Time taken for payments

For instance, National India Assurance Company restricts medical cover to ₹ 150,000 for senior citizens. While it loads premium in the range of 10-200 per cent in case claims have been made for two successive years, a renewal after the age of 80, too, attracts premium loading that increases with advancing age. ICICI Lombard has a high loading of 200 per cent.

Another variable is the waiting period for pre-existing illnesses. Max Bupa’s Heartbeat stands at four years while National Varishtha’s has a waiting period of one year. Most policies have an overriding period of two to three years for diseases that indicate no permanent exclusion. Apollo Munich’s Optima Senior Policy has a permanent exclusion for illnesses such as thyroid and asthma. Insurance companies tend to shun those who suffer from chronic diseases such as diabetes, and heart and renal ailments.

Circumventing technicalities

While the benefits of these medical policies hold a distinct sheen, the patina of limitations can make them far less attractive than they seem at a cursory glance. Silvers have a tough time trying to peruse and sift information, compare benefits and premiums, and make sense of the reams and reams of terms and conditions; and they become less keen or open to getting a medical policy in the first place.

The insurance agents of many companies are overly persuasive and sometimes threateningly aggressive in their approach to selling policies; when it comes to meeting their sales targets, they are unstoppable. But once the policy is bought, you need to remind and chase them even to get the hospitals covered and the rules/regulations booklets they are supposed to include with the mediclaim policy.

During meetings with prospective customers, they paint a pretty picture and speak volumes about the benefits of the different policy offerings. Unfortunately, they tend to sideline the comparative view and don’t say much about what other companies may or may not be offering. Most silvers have little or no inclination to thoroughly study all the policies that are currently available to them from different companies.

The loopholes in the medical policies come to light only at the point of a claim and policyholders realise they have been left with the short end of the stick, so to speak. It is a must to scrutinise the details and categorisation in various mediclaim policies. As you need to process your claims through third-party administrators (TPAs )—the TPA is indicated in your policy—you may face hurdles in getting your dues in time unless you have opted for a cashless mode if available.

Cross-referencing

It’s always a good idea to cross-reference the details agents provide, with information displayed on the health insurance company’s official website. Online information like customer reviews and complaints help to arrive at a sound decision about which medical policy you should opt for. The sites listed below and many others can be a mine of medical insurance-related information:

• www.healthinsuranceindia.org
• www.myinsuranceclub.com
• www.mediamanage.com/health-insurance-store.aspx
• www.mediclaimindia.co.in
• www.medindia.net
• www.coverfoxcom
• www.policybazaar.com
• Individual insurers’ websites

You will find that arming yourself with as much information as you can find is the best way to reduce the hassles when you actually need to file a claim.

Pitfalls are avoidable

Getting medical insurance cover represents a significant investment. This is why it’s crucial for you to pour some effort and time into getting as many details as you can about the different medical policies available, and the companies that are offering them. Some common questions you should pose are:

• What are your reasons for getting health insurance cover and what do you expect from it?
• What kind of annual financial obligation are you goingto be looking at?
• Will my future income support escalation in future premium?
• Have you gone through the fine print with a fine-toothed comb and minutely compared the policy details?
• How will I complement the policy coverage in case of a need?

Before arriving at a final decision about the policy you want to get, a few more aspects need attention:

• Type of policy: There are a number of policies including floater, individual, surgical benefits and critical illnesses, etc. Identify your needs and a matching policy.
• Policy coverage: You cannot avoid tooth-combing the details such as exclusions, coverage of different diseases and any pre-existing diseases or health conditions. For example, certain policies will cover knee operations only after four years of buying a policy. It is also desirable not to hide pre-existing diseases.
• Terms and conditions: This one can be quite a toughie, but it’s vital that you check whether the company provides a reimbursable or cashless option. Check the timeframe for the pre and post-hospitalisation expenses, the room rent coverage, extent of the co-payment, deductible and sub-limits.
• Credibility: Insurance companies are very stingy when it comes to claim payment and use all the fine print to delay or avoid a claim. This is why you should check the company’s track record with reference to policyholders’ claim payments. You should not fail to crosscheck the insurer’s reputation in claim payment while being meticulous if filing a claim.
• Avoid discontinuation: Make careful note of the company’s renewal and expiry rules, and whether they have a grace period for making premium payments. Under new guidelines, changing an insurer if you are dissatisfied is permitted but extreme care needs to be exercised to avoid heartbreaks while using the portability option.

In conclusion

Illnesses always come unannounced and when they do surface, the financial demands in their wake can be extremely taxing. These can become a serious drain on your finances, especially at a point of time when you need them the most. Healthcare inflation is galloping at about 20-25 per cent per annum. Most silvers have no medical insurance and find their savings evaporating in a single illness and hospitalisation. Thus, a mediclaim policy is a necessity today. However, it will still be inadequate to cover total costs.

When it comes to medical policies, being forewarned is being forearmed. In short, become an information sponge and assimilate all the details you can. It’s best to stop and check before you make your final decision about the medical policy you want to take, rather than falter and fall at the time of filing your claim.

The author is an economist based in Mumbai

Photos: 123RF.com
Featured in Harmony — Celebrate Age Magazine
April 2017