Thursday, August 16, 2012
Fixed Benefit Health Plan can keep Claim Surprise at Bay
It is surprising to know that health insurance penetration in India is as low as 5%. The common man is either unaware or often confused while opting for a health insurance plan.On the other hand, the costs of healthcare are rising by the day, making health insurance almost mandatory for an average Indian. Technology and treatments have improved, no doubt. Evolving technologies in medical sciences has offered better treatments. However.it has made access tothese treatments more expensive and oftenunaffordable for the Indian middle-class.
The customer is faced with a vast array of health insurance plans with complicatedbenefit structures. The choices are huge with benefits, exclusions andrenewability, creating a confusing number of options. In such a scenario, customers are often at a loss at making achoice, and rely on the advice of theiragent or broker. A large number of people actually buy a health insurance planwithout fully realizing what they haveactually bought.The moment of truth occurs at themost inappropriate time that is when aperson is in the hospital and needs money to pay the bills. Typically, there are anumber of charges included in the billlike - room rent, doctor’s consultation,surgery, medicines, tests, food, etc. All ofthese put together amount to almost emptying the wallet.
Unfortunately, that is very often thetime when people discover the exclusionsin their health insurance plan and thecomplex way in which the payouts pertaining to the claim are calculated. Theactual claim paid is very often, much lessthan the actual expense incurred. Thisleaves the customer feeling shocked andlet down. Hence, the key concerns facedby buyers ofhealth insurance are worriesabout getting the full claim amount andcoverage ofall surgeries.In truth, it is not the intention of theinsurance company that customers havea poor claim experience and be out-of-pocket.The lack ofcustomer knowledge, at the time of purchase, is one ofthe major reasons for this gap.
What ¡s a fixed-benefit health plan?
Keeping this factor in mind, a few insurance companies have launched fixed-benefit health plans to take the ‘surprisequotient’ out of the claims process. Afixed-benefit plan is a health insuranceplan that is focused on helping customersmeet the cost of two major heads of medical expenses that are hospital roomcharges and cost ofsurgery. Such plans paya fixed per diem amount to cover roomcosts and pay a fixed amount dependingon the category of surgery. These plans donot, as a rule, cover the cost of consultation, medication, pathology, and radiology.
Now does it work?
As the plan covers just two elementsof medical expense, that is the hospitalroom rent and surgery, the insurancecompany is able to fix the benefit payableto the customer in the case ofany of these two events. Hence, the plan will have afixed payout for each day of hospitalization and a fixed payout for different categories ofsurgeries. These are called fixedpayouts because the customer, in the caseofa valid claim, will get this amount from the insurance company. Irrespective ofthe actual expense incurred. That means,a customer can calculate the approximatelevel ofclaim allowable even before stepping into the hospital. This takes the surprise element out of the claims process. A market research conducted showsclaims to be the number one factor forcustomer dissatisfaction in the case ofhealth insurance.
In addition, a fixed-benefit health planusually does not require the original documents to lodge a claim. Copies of the original documents can be submitted to process claims. This makes it an ideal supplemental health plan. In case the coveragefrom employers insurance or a customer’sex health plan is inadequate, this kindof health plan can be used to fill the gap.
A fixed-benefit health plan is meant forcustomers who want to buy an unambiguous product with clarity in terms ofthe claim process as well as exclusions.Furthermore, people looking for a supplemental health plan would be well advisedto consider a fixed-benefit health planrather than another indemnity product.
How to choose
Fixed-benefit health plans are available with differing levels ofcoverage. Customers should choose a plan that suits theirneeds best. Before opting for a fixed-benefit healthplan, other factors that are worth considering are:
Coverage of a maximum number of surgeries
Have a wide network of hospitals
Important riders like critical illness
Flexibility in terms of covering the entire family or gift it to siblings or in-laws.
Quantum of family coverage that is floater versus individual member’s coverage.
Least waiting period for claims and renewability
Keeping all these factors in mind while choosing a fixed-benefit health plan willensure that customers have a genuine no surprises experience.