Essential Reading About Medical Insurance for You

 

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A question often asked by seniors is “As a Senior can I get Medical/Health Insurance?”

Or sometimes more specifically like “I am 66 years or I am over 70 years old, can I get Medical Insurance?

Health conditions are usually directly proportional to age. As we age health problems increase.

Is Medical Insurance necessary for seniors in India?

Medical expenditure is increasing and will continue to increase in the years to come. It would be challenging for senior citizens who are living on their savings or pension to bear the high cost of medical treatment entirely on their own.

How many retired employees are fully covered by medical insurance?

Government employees continue to have health care covered by the Central Government Health Scheme (CGHS) after retirement. It is mostly provided for the retired Government employee and spouse. However, many times the CGHS “approved rates” are far below the rates charged by private and corporate hospitals.

Some of the larger public sector companies and multi-national companies continue to provide medical care for their retired employees. Large manufacturing companies have their own hospitals too. But in case the employee prefers to take treatment elsewhere, then the cost of the same would have to be taken care of by the employee.

A friend who worked in a relatively small public sector company continues to be covered by the company’s Group Health Insurance scheme post-retirement too. The coverage is limited to hospitalization costs. Other expenditures incurred on health as doctor consultation fees, laboratory tests, and scan costs, etc. have to be borne entirely by the individual.

Changing Healthcare Scenario in India - In some developed countries health care for all citizens is taken care of by the government. In some countries like the USA, it is not possible to get medical treatment at many hospitals if you do not have health insurance. However, in India, the government does not provide health care for all

In India Health Insurance has come of age now we may say.

About 40 to 50 years ago there were few Government hospitals, many Government-run Primary Health Care centres and few private hospitals. Since then the situation has changed drastically. Now there are many private hospitals and few government hospitals. Corporate hospitals are available even in small towns. With the passage of time, there has also been a steep increase in healthcare costs. Health Insurance has become important for all, irrespective of age.

Hence when it comes to senior citizens there is a definite need for seniors to have some medical insurance cover. Seniors should explore the options available and try to get a health insurance policy for themselves. The sooner, the better.

  Can seniors get medical/health insurance & which are the medical insurance schemes we may take?

According to Mr. Melvin Joseph, Insurance Expert & Financial Advisor, “Insurance companies are a bit skeptical in issuing health insurance policies to aged persons. This is because of the probability of higher claims in that segment.  But most insurance companies are offering policies to that segment with some restrictions/ limitations. There can be copayment, waiting period, and exclusions in such policies.”

So that’s Good News!

It may be noted that “copayment”, “waiting period” and “exclusions” are all common terms in health insurance. In layman's terms, copayment means the insured person bearing a certain percentage of the hospitalization costs.

The Waiting Period is the time period for which one has to wait before the insurance company provides coverage. For seniors, the waiting period is higher than compared to younger people. A 64-year-old friend who took a health insurance policy at the age of 58 which came with a 3-year waiting period. Her 28-year-old son who took a policy at the same time had no waiting period incorporated in his policy

According to Mr. Melvin, the following are the more popular Health Insurance Schemes for seniors in India:

1. Varistha mediclaim from National Insurance Company -Though the premium rate is one of the lowest in this category, the maximum cover is limited to 2 lakhs. 

2. Senior Citizen’s mediclaim policy from New India Assurance Company.-This policy is also good for seniors, but the maximum sum assured is limited to 1.5 Lakhs. You may click the link below for more details.

3. Red Carpet policy from Star Health Insurance Company. -This policy can be purchased by those in the age group 60-75. The main attraction of this policy is that you can buy it without undergoing any pre-medical tests. There is a co-pay of 50% for all pre-existing diseases and 30% for all other diseases. The policy allows a sum assured of up to 5 Lakhs. You may get more details from the below brochure.

4. Silver Health policy from Bajaj Allianz General Insurance Company- This policy offers insurance cover up to 5 Lakhs for those up to age 70. For details click on the link below.

Should Seniors take Medical Insurance from a Government Company because it is “safer”?

A question that came to my mind when I was considering taking health insurance was “Are there any Government medical insurance schemes?” To my mind, a Government Health Insurance Scheme may be a safer bet. Just as post-retirement, we are cautioned to invest our savings in government-guaranteed or government-backed schemes for the sake of the safety of our investments, I assumed there would be safer avenues in health insurance too.

Mr. Melvin Joseph answers it best “All insurance companies in India are regulated by the regulator, Insurance Regulatory and Development Authority of India (IRDAI).  Both government & private companies are safe” 

The Government of India has introduced the Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (JAY) to provide free medical care to citizens living below the poverty line.

Key Features of PM-JAY

·        It provides a cover of Rs. 5 lakhs per family per year for secondary and tertiary care hospitalization across public and private empanelled hospitals in India.

·        PM-JAY provides cashless access to health care services at the hospital.

·        It covers up to 3 days of pre-hospitalization and 15 days of post-hospitalization expenses such as diagnostics and medicines.

·        There is no restriction on family size, age, or gender.

·        All pre–existing conditions are covered from day one.

·        Benefits of INR 5,00,000 are on a family floater basis which means that it can be used by one or all members of the family.

PM-JAY is fully funded by the Government and the cost of implementation is shared between the Central and State Governments.

Who is eligible for the PM-JAY Health Care scheme? Ayushman Bharat PM-JAY  aims at providing a health cover of Rs. 5 lakhs per family per year for secondary and tertiary care hospitalization to over 12 crores poor and vulnerable families (approximately 55 crore beneficiaries) that form the bottom 40% of the Indian population. The households included are based on the deprivation and occupational criteria of the Socio-Economic Caste Census 2011 (SECC 2011) for rural and urban areas respectively

Source –National Health Authority (nha), Government of India.

Are there any Government Medical Insurance Policies besides the PM-JAY??

As per the government directions, all insurance companies are offering “Arogya Sanjivani Policy’. They offer health insurance coverage in the range of 1 Lakh to 5 Lakhs. It is mainly for the lower income group.”

Arogya Sanjeevani Policy -Arogya Sanjeevani Policy is a standardized health insurance policy introduced by the Insurance Regulatory and Development Authority of India (IRDAI). It is aimed at providing affordable health insurance coverage to individuals and families

The Arogya Sanjeevani Policy is available for individuals across age groups including senior citizens.

Arogya Sanjeevani policy is not offered by a specific government agency. IRDAI sets the guidelines and specifications for the policy and is provided by multiple insurance companies. The consumer can choose the company from which they want the buy the policy after studying its specific terms

Arogya Sanjeevani policy offers a minimum sum insured of Rs. 1 lakh and a maximum sum insured of Rs. 5 lakhs,

The premium may vary between insurance companies, but it generally aims to provide coverage at a reasonable cost compared to some other policies in the market.

NB: The specific Terms & Conditions under the Arogya Sanjeevani Policy may vary between insurance providers. It is essential to check with the insurer or refer to the policy documents to understand the coverage, premiums, and age-related restrictions if any.

I present below the Highlights of an e-Book on Medical/Health Insurance by Mr Melvin Joseph which begins with a definition of Insurance Terms you should be aware of. 

Ø  Sum Insured (SI) is the maximum amount that your insurance company will pay in a year in case you are hospitalized. It can be 2/3/5/10/50/100 Lakhs depending on how much sum insured you have opted for in your policy. Even without hospitalization insurance coverage is there for certain Day Care Procedures for example Cataract Surgery, where the patient is discharged the sa   

     Pre-existing Disease -Any medical condition or disease before purchasing the health insurance policy is called pre-existing disease. Any hospitalization due to pre-existing condition is covered only after 12 months - 48 months of your taking the health insurance policy as per the conditions in the policy.

Ø  It is advisable that you disclose all Health Issues and Medical Conditions in the past and present while purchasing the policy. Otherwise, it can lead to Claim Rejection and Policy Rejection in future

Ø  Inflation in Health Care is higher than general inflation of the economy making Health Insurance a must for everybody

Ø  There are two types of Health Insurance Policies a) Individual and b) Family Floater. The Individual Policy is suitable for seniors. It is not advisable to include seniors in the family floater policy as the Premium in a Family Floater policy is decided on the basis of the age of the oldest family member. Hence it is advisable to take a separate health insurance policy for the senior citizens in a family.

Ø  Health insurance premium is not a constant like term insurance/life insurance. Some insurance companies increase the premium annually, and some in an age band as once every 4 years or 5 years

Ø  Many health insurance policies offer additional superfluous benefits like daily allowance, and ambulance charges, for a higher premium. Go in for a basic simple policy if you are looking for value for money.

Ø  Increasing Sum Assured as you age may not always be possible. Hence it is advisable to Purchase a high-value policy when you are relatively young and gradually increase it to ensure decent health cover for the long post-retirement days.

Ø  Corporate Group Insurance Health Cover for the employee and dependents may be available while you are employed. But, after you retire and leave the company, you cannot transfer this cover to an individual health insurance policy, which you need to purchase at that time. Post Retirement Insurance Cover may not be continued indefinitely by your company. Purchasing an independent personal policy will be always worthwhile because you need not worry about complications in the future.

Ø  Major concerns in Health Insurance – Waiting Period and Exclusions- A policyholder will not get coverage from day one of the policy and in order to make any claim over the policy, the policyholder needs to wait for some time known as “waiting period”. During the waiting period, no insurer will consider any claims from the policy. The clause has been provided in order to prevent any false claims.

Ø  Exclusions in Health insurance- Cosmetic and Dental Surgery are normally not covered in a health insurance policy unless it is required due to an accident. Normally, Homeopathic and Ayurveda treatments are not covered. Few policies cover it but within certain limits. There are some permanent exclusions like injuries due to war, HIV, intentional injuries like injuries due to suicide attempts, diseases since birth (congenital diseases), etc.

Ø  Paying Insurance Premium On Time is of Utmost Importance – To receive continuity benefits from your health insurance policy, you need to pay the Annual Premium by the Due Date. Insurance Companies do give a Grace Period ie a specified period of time immediately following the premium due date during which the premium can be paid to renew a policy in force without loss of continuity benefits such as waiting periods and coverage of Pre-existing Diseases. But Insurance Cover is not available during the grace period. If there is a claim during these 30 days, it will be rejected. So, renew your health insurance policy before the due date.

Ø  Super Top-up Health Insurance is a cost-effective option in health insurance – Most Health Insurance companies are offering super top-up policies. It is a relatively low-cost option to enhance Insurance Coverage. However, an important point is that you should buy it from the same insurer where your base policy is purchased, as it is easy for cashless claims.

Ø  Avoid health insurance with room rent limits - A small fine print in the policy condition states that, in the case of a sub-limit in room rent, all expenses other than the room rent will also be paid proportionately on what you would have incurred, had you stayed in the room as per your eligibility. Hence there would be a significant increase in your Total Bill Amount because of taking a room higher than your eligibility

Ø  Portability in health insurance -Health insurance portability was introduced by the IRDAI in 2011. Portability makes it possible for a policyholder to transfer the credit gained for pre-existing conditions and time-bound exclusions when switching from one plan to another of the same insurer, or from one insurer to another. The Transferee Insurance Company will collect the details of your policy and claim history from the Transferer Company and decide on your application.

Ø  Health Insurance policy from Life Insurance Companies Few Life Insurance Companies are offering health insurance policies with many restrictions and limitations. In most of these policies, insurance coverage is available only up to a particular age like 65 years, that too with many restrictions. It is in your interest to avoid such policies. Purchase health insurance policies from general insurance companies or a standalone health insurance company only which offers lifetime renewal.

Ø  Critical Illness policy - You can think of supplementing your existing health insurance cover with a Critical Illness policy. In this policy, the insurance company pays the lump sum cash amount (insured amount) when the specified disease is diagnosed irrespective of the amount spent on the illness. While your normal health insurance policy reimburses the actual amount spent in the hospital, a critical illness policy will give you a lump sum amount, as per your policy value. The most common diseases covered are - Cancer, Major Organ Transplant, Heart Valve Replacement, Total Blindness, End Stage Renal Disease, and Kidney failure. A major exclusion is that the policyholder should survive for a minimum period of 30 days after having a critical illness.

Ø  Health Insurance Premium - Tax benefits Under Sec 80D, you can get an exemption of up to Rs. 25,000 in a year for health insurance premiums paid for yourself, your spouse, and your children. This limit is Rs 50,000 if you are a senior citizen. You can claim another Rs 25,000 as a health insurance premium paid for Parents. It is 50,000 if one of the parents is a senior citizen. 

      Do  go through the e-booklet on Health Insurance in detain and choose the most appropriate Medical Insurance Scheme