To say that health insurance is essential would be an understatement. Given the rising cost of medicine and the increasing incidence of illnesses, a health insurance policy has become a must in order to afford quality healthcare.
However, there are technical details to the plan that many policyholders either overlook or are unaware of regarding health insurance. This causes confusion at the time of claims. Even when buying the health plan, many individuals overlook the finer details of the policy, increasing their out-of-pocket expenses on healthcare. In fact, according to WHO’s database, India has the highest out-of-pocket expenditures on healthcare. Have a look –
One of the primary factors to reduce out-of-pocket expenses is knowledge. If you are fully aware of the terms and conditions of your policy and its coverage benefits, you can make an unambiguous claim. You can also opt for a comprehensive plan, maximizing the coverage and reducing your out-of-pocket expenses.
So, here are six lesser-known facts about health insurance that are often overlooked but essential:
1. Increase in health insurance premium
The health insurance premium increases for multiple reasons. The most common reasons are:
Age:
Unlike life insurance plans, where the premium remains constant throughout the policy tenure, health insurance premiums rise regularly. Even if the sum insured remains constant, the premium will increase with age. Some insurers increase premiums on a yearly basis such as Digit, Max Bupa, etc. However, some insurers fix the health insurance premiums based on age brackets. For example, if you check the premium table, you might find the premiums listed as per the following age slabs:
- 0 to 18 years
- 19 to 25 years
- 26 to 35 years
- 36 to 40 years
- 41 to 45 years, and so on
Every age bracket has a different premium. As you progress from a lower age to a higher one, the premium would increase given the increased probability of health risks. So, if you buy a plan at 35 years of age, they would charge you the premium corresponding to the age bracket of 26-35 years. Next year, as your age progresses to 36 years, the age bracket would change, and the premium would increase.
- Overall claim experience of the company:
Even if the insurance company incurs many claims in a financial year, they might revise their premiums and charge a higher amount. For example, with the COVID pandemic wherein insurers are hiking their premium rates for maintaining profitability following an increased number of claims.
Also, if the re-insurers revise their cost, insurers might increase their premiums to adjust the cost.
So, your health insurance premium would increase on renewals, for one or more reasons mentioned above.
2. Pre and post hospitalization claims are always on a reimbursement basis.
Modern-day health insurance plans allow ease of cashless claims. However, with pre and post-hospitalization expenses, a cashless claim is not possible. It is because the costs can be determined only when you have recovered. After recovery, your medical expenses stop, and then you can estimate the pre and post-hospitalization expenses that you incurred on the illness or accident. After you aggregate the expenses and collect the relevant bills, you can submit them to the insurer. The insurer would verify the invoices and reimburse you for the medical costs incurred.
So, even if your insurer offers easy and hassle-free cashless claims, claims for pre and post-hospitalization expenses will be settled on a reimbursement basis only.
3. Domiciliary expenses are for home ‘hospitalization’ only.
When your health plan talks about domiciliary treatments, many confuse it with home care treatments or home nursing expenses. Domiciliary coverage is available under your health plan only when you are ‘hospitalized’ at your home. So, if you get a home nurse to oversee the sick or recover at home, it would not form a part of domiciliary coverage. Unless you are hospitalized at your home, domiciliary coverage would not be available. Hospitalization at home means getting the same treatments that you would have gotten in a hospital if you have been admitted to one.
Moreover, domiciliary treatments are covered only if any one of the following conditions is fulfilled:
- There are no hospital beds.
- Your medical condition is not stable enough for you to be transferred to a hospital.
- Most plans stipulate that your home hospitalization should exceed 3 days for the claim to become eligible as a domiciliary claim.
A prevalent example is the current second wave of the COVID pandemic, where there has been a shortage of hospital beds in many cities. In such a scenario, if an individual suffers from COVID and becomes severely ill, he should be admitted to a hospital. If, however, no hospital bed is available, the individual can opt for home hospitalization. Here, the health plan would cover the cost of home hospitalization, as it would be called domiciliary hospitalization. On the other hand, if an individual suffers from COVID and is home quarantined, it would not qualify under domiciliary coverage.
4. Consumables are not covered in your health plan.
Your health plan might boast of a high coverage without sub-limits on room rents and inpatient coverage up to the sum insured. However, the cost of consumables is not covered in most plans. Consumables include expenses incurred on single-use medical items like gloves, cotton, antiseptic solution, etc. Of your total inpatient hospital bill, about 5% of the cost consists of the cost of consumables. The health insurance plan would not pay these costs, and they would constitute your out-of-pocket expenses.
However, some insurers might provide an add-on benefit, which if opted for, could cover the consumables.
5. Daycare treatments can be availed on a cashless basis.
Daycare treatments are those treatments that do not require 24-hour hospitalization, such as appendicitis, chemotherapy, cataract operation, etc. These are payable under cashless only if planned and approved ahead of time.
6. Health insurance claims cannot be denied after 8 years
If your health insurance policy has been continued without any break for a moratorium period of 8 years, then the claim cannot be rejected on grounds of non-disclosure or misrepresentation of material facts other than proven fraud or permanent exclusion case, according to the new ruling of the IRDAI starting April 1st, 2021. This is a part of the continuity benefits and holds true even if your policy has been ported to another health insurer!
So, don’t be a novice when it comes to your health insurance policy. Instead, understand these hidden details to have the proper knowledge when buying a plan and handling the claims. After all, knowledge is a powerful thing, isn’t it?
Read about A complete guide for health insurance claims: Types of claims here.