Medical inflation: Is employer-provided health insurance adequate?

Apr 02, 2018 | 1 year ago | Read Time: 2 minutes | By iKnowledge Team

According to a survey report, medical inflation in India has shot up by 12.5% in 2016, which means your employer provided insurance coverage is not adequate.

A coronary artery bypass graft (CABG), including other expenditures, could knock you back by Rs 1.5–5 lakh. But, did you know that 48% of employer-provided health insurance covers only up to Rs 2 lakh?

So, how do you tackle a situation if the treatment cost outstrips the health insurance amount provided by your employer?

Before we delve into this, let’s look at how much insurance coverage do you need. This will help you gauge what your insurance coverage should be.

A 2017 Global Medical Trends Survey Report stated that medical inflation in India shot up by 12.5% in 2016. This means that if the medical inflation continues to grow at the same rate, then in the next 10 years, you could predict today’s Rs 4 lakh single-stent angioplasty medical procedure to cost you close to Rs 13 lakh, while a Rs 36 lakh-transplant would be around Rs 1.17 crore!

Don’t panic! This is what you can do to protect your future

Relying on a company-provided health insurance shouldn’t be your sole option. Instead, buy a health insurance or a comprehensive life insurance with riders that can cover your medical expenses if you are diagnosed with a critical illness, like cancer.  

How can they help you in times of crisis?

Let’s understand this with the help of Ashok’s example. Ashok took a health insurance of Rs 10,000 every year since he was 27. At the age of 41, Ashok was diagnosed with severe coronary heart disease and, therefore, needed a coronary artery bypass grafting surgery.

This could’ve set his savings back by around Rs 5 lakh. However, he had a health insurance that took care of the bypass costs.

Thus, by just paying Rs 10,000 for 15 years (Rs 1.5 lakh), Ashok managed to save Rs 5 lakh.

Ashok also saved tax every year by claiming deductions under Section 80D of the Income Tax Act. 

This is how you can get the right health insurance

Step 1: Compare benefits provided by different health insurance plans.

Step 2: Determine health coverage and premium amount.

Step 3: Check if the insurance company has a robust resettlement ratio. A healthy ratio will ensure you don’t have too much difficulty in claiming insurance benefits from the insurer.

Step 4: Confirm the number of illnesses covered by the insurer.

Step 5: Ensure you get premium facilities like cashless treatment and reputed network hospitals

Step 6: Know about the number of alternate treatments covered under the insurance.

To sum up

Solely depending on an employer-provided life insurance can be a risky. Instead, better be financially safe and buy a health insurance policy, so that your medical emergencies, and hospitalization fees are taken care.

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