But choosing cashless health insurance is easier said than done.

By Mathilde Giglio

In fiscal year 21, health insurance saw a 13.3% growth in gross direct premiums (GDPI). The online individual insurance market opportunity is expected to grow to $1.25 billion by fiscal year 25

Even people who didn’t trust insurance companies and relied on personal savings to pay for medical expenses before the pandemic learned that personal savings were massively insufficient for medical emergencies.

As such, there is a growing demand for cashless insurance that can provide adequate protection against unexpected medical costs. But choosing cashless health insurance is easier said than done. Besides the usual suspects like co-pays, discounts, sub-limits, and room rent ceilings, there is a curve that can expose your bank balance to plummet into the red.

Outpatient clinics

More than 60% of healthcare expenditures are attributable to outpatient department (OPD) expenses such as doctor visits and payment for prescriptions and diagnostic tests. According to reports, Indians visit the doctor three times a year on average and a diagnostic test is prescribed in every 3.5 consultations.

According to the 75th NSO Health Survey, there are 122 times more people who do not need hospitalization in urban India.

However, most insurance plans are still purchased to cover the costs of hospital treatment which means that you pay premiums while also spending a good portion of your savings on out-of-pocket health expenses.

Insurance companies now offer health coverages with outpatient clinics. But there are either annual expense limits or an advance to co-pay. All this with an increase in your premium versus your premium paid for IPD only. So choose a plan that gives you adequate outpatient coverage.

Not payable

IRDAI usually has a list of up to 200 items of non-credit or non-medical expenses that insurance companies are exempt from paying. For example, arm hanger, mask, urine bags, clean sheets, visitor permit, medical records etc. On average, this expense represents 10% of the hospital bill. But we’ve seen it go up to 50% during the pandemic.

Insurance companies are working to reduce the list of non-payable accounts to appeal to consumers and reduce the proportion of expenses incurred by the patient.

ambulance fee

The ambulance fee is payable by the insurance company but even the best insurance plans cover ambulance expenses only up to Rs 10,000. The cost of calling an ambulance in a city like Bangalore is around 2,000 rupees for the first 10 km and 120 rupees for each additional km with a waiting fee of 250 rupees per hour.

Uncontrolled hospital environment

No one can accurately predict what you will ultimately spend after being admitted to the hospital. A regular doctor’s visit may be followed by a series of unexpected tests, and surgery with a standard treatment line may face complications that add to the final cost.

An uncalculated decision in choosing a security deposit may lead you to pay a sudden hospital fee for which your insurance company cannot be held responsible.

You are buying worst-case scenario health insurance, so if you can afford a higher premium, you should get a higher insurance amount. Most personal finance experts recommend a minimum health coverage of Rs 5 lakh or at least 50% of your annual income.

Your active lifestyle

Ironically, an active lifestyle can negatively impact your hospital experience. But here’s why this happens. All health insurance plans have permanent exclusions for injuries resulting from sports or adventure activities. So if you are energetic and enjoy taking risks, it is best to keep some extra change in your pocket.

The devil is in the details when choosing a healthy cover for you and your family. Investing in a cover that can protect your money from medical inflation is more important than ever.

(The author is COO and co-founder of Even. Opinions are subjective and not necessarily those of Financial Express Online.)

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