My comments on Shobhana Chadha news in Economic Times Sep 7,2008

Shobhana Chadha, has covered an interesting story in September 7, 2008 issue of
The Economic Times on HEALTH INSURANCE
BETTER SAFE THAN SORRY

Never let bad choices spoil your future. You surely cannot correct your past mistakes, but definitely secure future by taking right decisions now. Take, for instance, Ramakrishna Pandya who learned from a stumble. The 50-year-old PSU employee, despite covered under a health plan, had to shell out a hefty sum of Rs 2 lakh while undergoing treatment for a bypass surgery in a private hospital.

Pandya’s fault was that he had picked up a health insurance plan which had sub-limits imposed on room rent, doctors’ fee and diagnostics. He could have easily saved himself from such a huge financial loss if he would have opted for a right health insurance policy, which fulfilled his requirements. To make sure that you don’t suffer due to an inadequate cover, here’s an insight into how to select the right medical insurance.

How to choose

First and foremost, insurance experts advise you should make sure that the health policy you opt for provides the right kind of coverage, which is in line with your family history of ailments and professional hazards. It’s a daunting task, keeping in mind that there are a host of health insurance products available in the market that differs widely in coverage and cost.

Says Sanjay Datta, head, health and accident insurance services, ICICI Lombard: “Contact insurance companies call centre or ask your agent to show you policies from several insurers so that you can compare them. Make sure the policy protects you from large medical costs, and beware of single disease insurance policies.” According to Datta, there are some polices that offer protection for only one disease, such as cancer. Thus, if you already have health insurance, your regular plan probably already provides all the coverage you need. Do check for the coverage you have before buying any more insurance.

Must haves

The basic purpose of health insurance, according to health insurers, is to protect you against health problems that impact you financially. “Therefore, your plan must insure you for three major categories — critical illness, hospitalization and surgeries,” says Sitesh Prasad, vice-president, Tata AIG General Insurance. Another thing, points out insurance experts, you should look before buying a health plan is cashless facility, which gives you the freedom of not making any advance cash deposits in case of hospitalization.

Datta believes the cashless facility serves as a boon for those times when you need finance the most. You have to simply use your health ID card at any of insurance providers’ network hospitals to avail of cashless service. “It is important for you to know that all insurance companies do not provide this facility,” says Datta. According to insurance experts, an Rs 1 lakh plan for a 30-year-old that provides coverage for all the three categories (mentioned above) should result in premium of not more than Rs 3,000-5,000 a year.

Scan the riders

For starters, you must remember that not every disease comes under the purview of a health insurance plan. Generally, a health insurance plan covers major diseases or illnesses such as cancer, bypass surgery, myocardial infarction, kidney failure, paralysis and so on. But with a rider — they do not protect from illness/ injury existing before the inception of the policy for the first four years.

Other cases when you can not count on your health insurance are — allopathic treatment, pregnancy and childbirth-related diseases, cosmetic aesthetic and obesity related treatment; expenses arising from HIV or AIDS related diseases, use or misuse of liquor, intoxicating substances or drugs as well as intentional self-injury; any medical expenses incurred during the first 30 days of inception of the policy, except accidents; congenital diseases; war, riot and strike-induced hospitalization.

Further, you should review the room and boarding cost thoroughly before you opt for a plan. Most of the insurance policies cap room and boarding costs at 1% of sum insured a day and at 2% a day for those in an intensive care unit. Thus, when you sign up on the dotted lines, do check if the insurer has assigned a substantial sum for these expenses.

There’s also a chance that your company is providing a health cover under a group plan. Group health insurance is a benefit that companies, private bodies and trusts provide to their employees or a homogeneous group of people and enables them to receive private medical treatment quickly and at low cost. However, what you must make sure is that you are adequately covered under a group plan. If you are not, then you should buy a health policy immediately. Remember, penny wise, pound wise!

Some of the points where I find contradictions are;

Pandya Case: If he is working for a PSU the he is covered under Medical Rules of the company, which are very liberal. Full costs are borne by companies like Indian Oil or NHPC .Even Helicopter evacuation of the employees is covered by NHPC ,if employee
is to be evacuated from a remote dam site to a metro for treatment. Even the best health Insurance policy does not cover Helicopter evacuation .If Pandya had to pay Rs 2 lakhs then it is not because of sub limits but may be because of under insurance i.e. he was not covered for sufficient amount.

Sanjay Dutta suggests contacting Company call centre or agent: If you contact company’s
Call centre they are ready to give their rates /policy details. They do not have competitors data or they don’t want to reveal it. This means that you do not get choice. Same way agent also is handling only 1 company and does not give comparative quote. It is always better to go to site like http://www.healthinsuranceindia.org or consult an Insurance brokerage firm which is handling products of all insurance companies.
Sanjay mentions Rs 3000 to Rs 5000 for a person 30 years old for sum assured of Rs 1 lakh.This is possible for Rs 1400 or even less in case of Reliance General.

Allopathic Treatment: there is no policy which does not permit Allopathic Treatment.
In fact treatments which are not covered are Homeopathy, Naturopathy, and Magneto therapy.
Treatment by Magneto therapy has been accepted in USA. Homeopathy is widely practiced in Germany .We even have Homeopathy colleges and hospitals in India then why we are not covering it under Health Insurance Policy. Is it that we under pressure of
Allopathic lobby? Let us see who makes the beginning.