We secure our future with many financial plans like children’s education, housing, automobile, Life insurance and so on. All we have built up can evaporate with a major hospitalization bill if not protected by a suitable Health insurance policy. More than 70% of Indian population does not have health insurance protection and has driven many families to financial disaster and collapse. Mediclaim insurance is for financial immunity.

Mediclaim Insurance as a commercial insurance product came into the Indian market in the year 1986. As on day it is the  fastest  growing portfolio in General  insurance with premium  share of  30% , behind  motor  which is at 38% (2018-19). In 2020 the health is likely to overtake motor portfolio, thanks to Covid 19   role and demand for health cover.

Mediclaim insurance is not a welfare or charity product as many believe. It is a regular indemnity insurance to compensate for unforeseen sudden illness, sickness, disease, accidents and health issues which is not known to the insuring person at the time of availing the policy.  It follows the same principles of   property insurance, so it is a product with the promise to compensate for expenses of hospitalization as per the contract of insurance, subject to the terms, condition and exclusions of the policy. So let us not talk about the human touch or welfare from the underwriters.  As a commercial product it need to bring some underwriting surplus, so the pricing and conditions also need to be fair. It is   true, on a long run a well-covered population gets health and financial protection so that it can be a social security as being the case in US and western countries. In India also Government is implementing many Universal health insurance schemes to protect the multitude of downtrodden population.

Need for Health Insurance

While India might be a developing country based on socio-economic development parameters, in terms of our lifestyle and health, India has the same morbidity profile of Developed countries. Lifestyle diseases like cardiovascular, diabetes, hypertension, asthma and respiratory as well as cancers are on the rise. India has over two million registered cancer patients. The country has been undergoing a rapid transition in health over the past several decades – a shift from infectious diseases to non-communicable diseases (NCDs). India has the highest number of diabetics at 50.8 million according to the World Health Organization. This figure is set to increase to 73.5 million by 2025. Twenty-five million suffer from cardiovascular diseases which amount to 60% of the global figure.

Economists estimate about 30% of Indians are middle class. And with rapid urbanisation people are adopting a more sedentary lifestyle. This increases number of lifestyle diseases.

There is a steady increase in old age population where one is more susceptible to diseases. As per Census 2011 there are nearly 104 million elderly persons (aged 60 years or above) in India. A report released by the United Nations Population Fund suggests that the number of elderly persons is expected to grow to 173 million by 2026.

Another rising health concern is global pandemics. The pandemics of the past decade have clearly demonstrated the speed at which infections spread across the globe. Ebola, SARS, MERS, and H1N1—to name but a few and now the Covid19, demand coordinated and agile healthcare responses. Pandemics will in all likelihood exert periodic and significant disruptive pressure on health systems

Exorbitant Hospital Bills- It is known to all that getting effective and good health care in hospitals have become out of reach for an average citizen. Corporate hospitals and business venture five star hospitals squeeze the patients and the insurance companies. The bills are much higher for insured patients.  No wonder the claims outgo for most of the insurance companies is more than 100% and it is reflected in the high price for buying health insurance. At the prevailing premium rate even middle class families cannot afford to buy health policies. IRDAI has come out with instructions to allow installment facility, but it is yet to be implemented.  There should be a system in place to regulate the hospitals and rationalising the fees structure. Unfortunately parliament has failed in instituting and enforcing laws in this regard

All the above said facts makes it sensible to avail a suitable health insurance cover to secure, hassle free and cashless treatment in case of hospitalisation.

Why it is life support - It is your healthcare wallet   and should carry all through your   life.  People think of Mediclaim at old age only after retirement. By then the insurance companies are reluctant to offer cover and insist on pre acceptance medical checkup report. For senior citizens the sum insured offered is also very less and limited to say maximum of Rs. 3 lakh and the premium payable is also very high as it is linked to the age. Again these policies will become fully operational only after 2/4 years as the waiting period is applicable on new policies for pre-existing diseases/conditions including Hypertension and Diabetes. Some companies offer Senior citizens policies as a positive gesture but the terms do not offer immediate financial relief. The purpose of focusing on this point is to call upon younger generation to avail Mediclaim cover for the self and family including old parents in their policy. This will also broaden the insurance premium pool with more healthy young insured persons, thereby reducing the portfolio claim ratio and in turn premium on Mediclaim Policies. The health portfolio of most of the companies show loss of more than 100%. This trend has to be reduced to keep the premium low at   affordable rate.

A table to illustrate the premium payable for individuals per year at various age bands for sum insured of Rs. 5 lakhs

Sl.no

Age band

Premium (Rs) plus 18% GST

1

< 35years

5420

2

36-45

5747

3

46-50 years

9532

4

51-55years

14418

5

56-60 years

18954

6

61-65years

25253

7

>65 years

35693

Tax rebate-For those who are interested in tax saving the premium paid is fully exempted under section 80D. Rs.25,000 on insurance for self, spouse and dependent children. An additional deduction for insurance of parents is available up to Rs 25,000, if they are less than 60 years of age and Rs.50,000, if the parents are aged above 60.

What is covered under Mediclaim policy-   The hospitalization expenses for all the diseases   (including Covid19) other than Pre Existing Diseases is covered under the policy up to the limit of sum insured.

Pre -existing diseases - The policy indemnify for the unexpected sickness not existing to the knowledge of the insured.  Pre-existing conditions could be ie. Cataract, Prostate Hypertrophy, piles, Hernia, cancer, chronic illness and so on. It is an exclusion under the policy.

This condition and rejection of claims have led to many disputes. To put an end to this confusion, IRDAI came with the ruling that all pre- existing diseases declared by the insured will stand covered under the policy after the period of forty eight months.  

What are the covers – The health insurance policy compensate for expenses incurred in an approved hospital as admitted in- patient for more than twenty four hours. However considering the advanced medical technology and nature of certain procedures (there are about 136 procedures as per list) admission in hospital for less than twenty four hours is admissible under day care procedures which would have otherwise required a Hospitalization of more than twenty four hours. Treatment normally taken on an out-patient basis is not included in the scope of this definition.

Age of entry- 3 months to 65 years

Watch out for following catches/condition which would spring surprise at the time of claim

  1. Two years/4 years waiting period for pre-existing diseases/conditions.
  2. Waiting period first 30 days for diseases. This exclusion shall not apply if the Insured person has Continuous Coverage for more than twelve months.
  3. OPD and domiciliary hospitalization
  4. Congenital Internal and External Disease or Defects or anomalies. However, the exclusion for Congenital Internal Disease or Defects or anomalies shall not apply after twenty four months of Continuous Coverage
  5. PROPORTIONATE DEDUCTION in bills - Reimbursement/payment of Room Rent, boarding and nursing expenses shall not exceed 1% of the Sum Insured per day. In case of admission to Intensive Care Unit or Intensive Cardiac Care Unit, reimbursement or payment of such expenses shall not exceed 2% of the Sum Insured per day. In case of admission to a room/ICU/ICCU at rates exceeding the aforesaid limits, the reimbursement/payment of all other expenses incurred at the Hospital, with the exception of cost of medicines, shall be effected in the same proportion as the admissible rate per day bears to the actual rate per day of Room Rent/ICU/ICCU charges.
  6. Co-pay clause - CO-PAYMENT is a cost-sharing requirement under a health insurance policy that provides that the Insured Person will bear a specified percentage of the admissible claim amount. A co-payment does not reduce the Sum Insured. There are companies applying up to 50% co-pay.  Look for this condition when some companies offer Mediclaim at lower premium.
  7. Disease /procedure wise sub limits irrespective of higher sum insured i.e. Cataract limits say limited to 20% of the Sum Insured subject to a maximum of Rs. 50,000. For each eye, Maternity limits( where it is covered )
  8. Expenses of Diagnostic expenses only not in consistence with the positive existence of disease ( not payable)
  9. Cost of braces, equipment or external prosthetic devices, non-durable implants, eyeglasses, Cost of spectacles and contact lenses, hearing aids including cochlear implants, durable medical equipment. (Covid 19 PPE kit has become an issue of contention, however IRDAI has instructed the companies to admit as it is a part of treatment protocol as per ICMR directive.)
  10. Dental treatment or Surgery of any kind unless necessitated by Accident and requiring Hospitalisation.
  11. TREATMENTS UNDER AYURVEDIC / HOMEOPATHIC / UNANI SYSTEMS Expenses incurred for Ayurvedic / Homeopathic / Unani Treatment are admissible up to 25% of the Sum Insured provided the treatment for Illness or Injury, is taken in a government Hospital or in any institute recognized by government

Additional benefits under the policy at no extra cost

  1. PRE and POST HOSPITALISATION MEDICAL EXPENSES mean Medical Expenses incurred during thirty days preceding the Hospitalisation of the Insured Person, and sixty days immediately after the Insured Person is discharged from the Hospital- Medical Expenses  incurred for the same condition for which the Insured Person’s Hospitalization was required only payable.
  2. Free HEALTH CHECK-UP - Reimbursement of the cost of Medical check-up at the end of a block of every three Claim Free Years. Such payment shall be restricted to Rs. 5,000 or 1% of the average Sum Insured of the Insured Person in the preceding three years, whichever is less. This benefit is available only once in three years.
  3. PAYMENT OF AMBULANCE CHARGES - charges for Ambulance services not exceeding 1% of the Sum Insured, Reasonably and Medically Necessarily incurred for shifting any Insured Person to Hospital for admission, or from one Hospital to another Hospital for better medical facilities
  4. MEDICAL EXPENSES FOR ORGAN TRANSPLANT - If treatment involves Organ Transplant to Insured Person, Hospitalisation Expenses (excluding cost of organ) incurred on the donor, provided liability towards expenses incurred on the donor and the insured recipient shall not exceed the aggregate of the Sum Insured and Cumulative Bonus, if any, of the Insured Person receiving the organ.
  5. HOSPITAL CASH - For those Insured Persons, whose Sum Insured is more than or equal to Rs. 3 lakhs, Hospital Cash at the rate of 0.1% of the Sum Insured, for each day of Hospitalisation admissible under the Policy. The payment under this Clause for Any One Illness shall not exceed 1% of the Sum Insured. The payment under this Clause is applicable only where the period of Hospitalisation exceeds twenty four consecutive hours. Payment under this clause shall reduce the Sum Insured.
  6. REINSTATEMENT OF SUM INSURED - If the Sum Insured is exhausted due to a claim admissible under the Policy, then the Sum Insured shall be reinstated to the Sum Insured stated in the Schedule, provided the policy liability under the Reinstated Sum Insured shall be subject to the following conditions: 1. Such Reinstatement of Sum Insured shall be effected only where the Sum Insured is Rs. Five Lakhs or more. 2. Such Reinstatement shall take effect only after the Date of Discharge from the Hospital for that claim which resulted in exhaustion of the Sum Insured 3. No Illness or Injury, for a Hospitalisation occurring during the Period of Insurance till the Date of Reinstatement, for which a Claim is paid or admissible, shall be considered under the Reinstated Sum Insured. 4. Such Reinstatement shall be available only once for each Insured Person during a Period of Insurance.
  7. DAY ONE BABY COVER - A Newborn Baby is covered for any Illness or Injury from the date of birth till the expiry of this Policy, within the terms of this Policy. Any expense incurred towards post natal care, pre-term or pre-mature care or any such expense incurred in connection with delivery of such New Born Baby would not be covered. Congenital External Anomaly of the New Born Baby is also not covered under the policy. No coverage for the New Born Baby would be available during subsequent renewals unless the child is declared for insurance and covered as an Insured Person.
  8. CUMLATIVE BONUS FOR NO CLIAM 25% for claim free year and maximum 50%. The sum insured will be added up to the basic sum insured for the benefits under the policy.

CASHLESS FACILITY means a facility extended by the Insurer to the insured where the payments, of the costs of treatment undergone by the insured in accordance with the policy terms and conditions, are directly made to the hospitals/ network provider by the insurer, to the extent pre-authorization approved. It is available with hospitals which are in the panel/ network of the TPA (Third Party Administrators) the IRDAI approved service providers to the insurance companies. For hospitals which are not in the panel the insured have to pay the bill and seek reimbursement. To avail this facility approach the insurance counter of the hospital. They will write to the TPA requesting for cashless approval. Normally approval is given within two hours. If there is any issues do not be worried, the claim can be reimbursed subject to the admissibility.

PREFERRED PROVIDER NETWORK (PPN) means network providers in specific cities which have agreed to a cashless packaged pricing for specified planned procedures for the policyholders of the Company. The list of planned procedures is available with the Company/TPA

To be called a total protection without financial hassles the hospitalisation should be 100% cashless.

Type of Policies

  1. Individual Mediclaim - For an individual. The details as given above. Might vary from company to company. What is given above is the basics. Check up with the companies before planning to buy a policy.
  2. Family floater policy - This is a single policy with single floating sum insured for the entire family. The premium out go will be much less and a suitable policy to save on premium and cover all the members of the family. There is only remote probability of all members getting hospitalized simultaneously.  So one sum insured will take care of the requirement of all the members of the family.
  3. Policy for senior citizens – For persons above 60 years. Once entered the scheme can be renewed up to 90 years with age band premium loading. Regular pre – existing disease exclusions applies for 2/4 years.
  4. Cancer care policy - The policy cover treatment for Cancer treatment only and no other diseases. Treatment  covered  are Chemotherapy , Radiotherapy , Organ transplant, as part of Cancer treatment , Onco-surgery (Surgeries for excision of cancerous tissue or removal of organs/ tissues), Proton Treatment, Personalised & Targeted therapy, Hormonal Therapy or Endocrine manipulation, Immunotherapy including immunology agents, Stem cell transplantation and Bone marrow transplantation (check up with the underwriters for more information and premium payable).
  5. Critical care policy for named chronic diseases only like Major Medical Illnesses and Procedures, heart CABG, kidney, cancer, organ transplant etc.
  6. Group policies and corporate tailor made policies – To cover large number of employees of large companies.
  7. Top up Mediclaim Policy - Top up health insurance plans offer additional coverage, beyond the threshold limit of the existing health insurance policy .In simple terms it is an extension to the regular health insurance policy in which the customers can have higher limit of protection at a lesser price. The cover starts when per hospitalization expenses exceed the primary health insurance policy sum insured.
  1. The Super Top Up  plans are similar to top up  plans, except that top up plan covers a single claim  above the threshold limit, while the super top up plan covers the total of all hospitalisation bills above the threshold limit during the entire policy year. This policy provides additional coverage, over and above the threshold opted by the proposer. But it is not compulsory that the insured should have another health insurance policy in order to avail this policy.

Illustration to understand Top up and Super top up

Basic health insurance policy of Rs.2 lakhs and Top up/ Super top up plan of Rs. 10 lakhs with a threshold of Rs. 5 lakhs

Claim amounts in a year

Top up

Super top up

First claim Rs.6 lakhs

Will pay Rs.4 lakhs( as the amount of 1st bill is more than threshold limit of Rs. 5 lakhs

 Will pay balance Rs.4 lakhs

Second claim Rs. 2 lakhs

Not paid

Will also pay next two bills of Rs.2 lakhs and Re.1 lakh, since the total expenditure of hospitalisation exceeds the threshold limit of Rs.5 lacs that year

Third claim Rs.1 lakh

Not paid

This is a floater policy; thus there will be a single sum insured and single premium for the whole family at reduced premium as compared to health policy of higher sum insured. Sum insured options of Rs.3 lacs to 50 lacs. Pre -existing diseases will be covered after 1 year from the first Super Top up Policy. Also offers additional benefits of 1. Emergency road ambulance cover 2. Option to opt for Air Ambulance Cover 3. Free health check-up 4. Maternity expenses including complications of maternity

Some tips to avail optimum coverage at reasonable cost

  1. Avail health insurance at a young age. Start with a reasonable sum insured and keep increasing the sum insured as the age progress and your premium paying capacity improves.
  2. If parents not covered include them in your policy, keeping you as proposer. Bring wife and children as the family expands. (Take the benefit of IT rebate also under Sec.80D)
  3. Take family floater policy with single sum insured. That will save on premium as the rates are lesser compared to individual policy
  4. Even if you are covered under a   corporate group policy, have a policy of your own. Claims if any make it with the corporate group policy and let your personal own policy run without claim to maintain NCB. This will give continued health insurance cover even if you leave the company or laid off.
  5. If you need to propose for sum insured above Rs.5 lakhs, a Top Up/ super top up Mediclaim policy can save on premium. This top up policy does not cover Hospitalisation cost by itself. It compensates only when claim amount exceeds the sum insured under the regular Mediclaim policy or exceed the opted thresh hold limit in the super top up policy.
  6. Maintain the continuity of the policy without break. There is grace period for renewal. If the policy breaks all waiting periods and time exclusions will apply again. You may also lose No claim Bonus up to 50% which amount accrue to the sum insured for claim free policy years.
  7. Buying health insurance from your Banks will be also cheaper as they get the benefit of reduced premium due to the large numbers. Look for the company offering Mediclaim policy and their terms before committing. If you are above 60 years banks may allow entry into the scheme without medical examination report.
  8. Elders who have a long running policy do not stop renewing the policy for reasons of being included in the working children corporate group policy. If they leave the company the senior citizen will be left without medical cover and getting a cover at old age is difficult and all waiting period and exclusions will apply afresh. I consider health policy as an oxygen cylinder, always carry it.
  9. Porting the policy to another company - policyholders faced disadvantages in terms of losing their benefits such as the ‘waiting period for pre-existing diseases’ and no claim bonus when switching insurance companies and were regarded as new policyholders by the new insurer. However, the portability rules by IRDA now enable policyholders to opt for their preferred insurer without worrying about losing the benefits.  Both the old and new insurer must complete the porting in accordance with the timelines specified in the IRDA. Written application to the existing insurer must be submitted at least 45 days prior to the premium renewal date.
  10. Majority of the agents selling health insurance may not have required product knowledge leading to selling wrong policy at higher cost. Never shift the running policy to a new company on promise of better terms.   If you need to shift ask for porting the policy to the new company as per the IRDAI norms Otherwise it becomes a new policy/contract and the waiting periods and exclusions will apply afresh.
  11. Portal and online policies – Don’t be tempted to take the policy from web aggregators and mailer offering cover for much higher sum insured (as high as one crore) on family floaters on any number of members. Compare the premium, policy conditions, limits for room rent and procedures and co- pay provision and any policy excess (amount not payable up to certain limits).
  12. Those who are very optimistic about their health and only worried about uncertainties like cancer and major illness can confidently go for cancer care and critical illness policies to save on premium outgo. However Standard Mediclaim is advisable as it covers all conditions including the periodical pandemics like Nipah, Covid19, Chikungunya, Ebola, Zika virus, rat fever and so on.
  13. Covid19 - Many have doubts whether Covid 19 is covered under the Mediclaim policy. All the diseases are covered including any future pandemics except the exclusions shown in the policy. Some insurance agents also create confusion to sell the newly introduced exclusive Covid19 protection policy. The regular Mediclaim policies do not pay for disposable items as stated in the policy exclusions. The PPE kit was the major component of the bill by the way of  treatment protocol and also exploitation by the hospitals by overcharging and showing many numbers of PPE  for single patient though one PPE per staff is used for many patients. However IRDAI has clarified that the PPE kit should be paid and is essential as per the ICMR advisory on treatment protocol.
  14. Covid19 specific policy – To help the people who cannot afford huge premium to buy standard Health insurance policies IRDAI the regulator instructed the insurance companies to make available Covid19 specific policy at affordable premium even for short term.‚Äč
  • Corona Kavach policy is an indemnity policy reimbursing Hospitalisation Expenses from bed-charges,   nursing charges, blood tests, PPE kits, oxygen, ICU, and doctor consultation fees. This policy can be bought with tenures of 3.5 months, 6.5 months and 9.5 months, payable with a single premium. With fifteen days waiting period.  Sum insured is available in multiples of Rs.50,000/ up to Rs.5 lakhs.
  • Corona Rakshak cover - a benefit-based policy - Under this policy, the insurance company will pay a lump sum amount, which is the sum insured, if the policyholder is hospitalized for a minimum of 72 hours after testing COVID-19 positive.

Now having learnt about the basics of health insurance policy and the need for the life support go for this policy for your entire family. Wishing all very healthy life especially at this time of pandemic. However wishing happy, hassle free hospitalisation with a cashless health insurance card in your wallet in case of unforeseen sickness.

(Disclaimer: The details of the Mediclaim scheme given above is of a standard product and might change from company to company. Please verify the prospectus and whatever quoted here cannot be assumed as benefits under all policies)