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Health Insurance

Healthcare inflation is close to 20% – plan accordingly

Healthcare inflation in India is close to 20% as compared to overall inflation of 8-9% per cent in the past few years. What it means is that if you need to plan for medical emergency then you need to factor tomorrow’s cost, today.

Says Mr. Mukesh Kumar - Member of Executive Management & Head Strategy Planning & Marketing, HDFC ERGO General Insurance Company Ltd. “One should be aware that the medical care costs are soaring high in-spite of new technology because the cost of super-specialty equipment and robotics is also passed on to patients. Additionally a shortage of super specialist doctors and surgeons adds on to the cost of medical care.”

The Insurance Regulatory & Development Authority report based on the 'amount claimed' reflects the actual expenditure incurred in case of major diseases, which shows rise in medical costs over the years. There has been close to 35% increase in the average claimed amount from FY 2007-08 to FY 2009-10. The industry saw an alarming 50% increase in the cost of cardiac ailments.

Health insurance is very well established in many countries, but in India it still remains an untapped market. Approximately; less than 15% of India’s 1.1 billion people are covered through health insurance.

And most of it covers only government employees or the non-urban population. At any given point of time, 40 to 50 million people are on medication for major sickness and share of public financing in total health care is just about 1% of GDP. Over 80% of health financing is private financing, much of which is out of pocket payments and not by any pre-payment schemes (Source :10th Global Conference of Actuaries).

The factors that are considered before buying insurance are typically the age, gender, requirement of Individual/Family Cover, any existing personal or employment cover, any Pre-Existing diseases, any prevalent Family History & the current finances & savings.

Although most insurance companies cover surgeries and accidents, they don’t include outpatient treatment, maternity benefits etc in the policy. So, it is better to find out if your insurance company covers these.

Age is a major factor that determines the premium, the older you are the premium cost will be higher because you are more prone to illnesses. Previous medical history is also a determining factor, which means, if you don’t have prior medical history, premium will be lower. If you have not claimed for a number of years, the company may give you a discount on the premium.


 
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