In today’s scenario medical care is expensive and costs are zooming upwards day-by-day. A person acquires medical insurance for the same reason as other kinds of insurance – to protect oneself financially. By going in for medical insurance, you can protect yourself and your family if struck by disease. While no one wants to fall ill, the last thing one wants to worry about when is whether one will be able to afford good medical care. On the other hand, if you have been prudent enough to obtain insurance, many of your costs can be covered by a third-party payer, namely, the insurance company, thus relieving you of considerable anxiety and concern.
The traditional form of health insurance is called indemnity insurance (also known as fee-for-service), in which the insurer pays for the cost of covered health care services after they have been provided. In most indemnity insurance plans the patient is free to choose his own doctor or hospital.
In India, the insurance business is still a monopoly, so that, for all practical purposes, the only medical insurance policy available for most of us is MediClaim, through the subsidiaries of the General Insurance Corporation (GIC). The government does have special schemes for its employees: the ESIS (Employee State Insurance Scheme) and the CGHS (Central Government Health Scheme). Many employers now provide medical insurance as a standard perquisite to many of their employees – this is called group insurance – and the premium is less than a stand-alone personal insurance policy. In many cases, the employer pays part of the cost or all of it. Not all employers, however, offer health insurance. Your employer may not subscribe to a health insurance scheme, especially if you work for a small business or work part-time. In such a situation, you might still be able to obtain group insurance (and thus save money) through a labor union, a professional association, club, or any other organization you belong to. However, if this is not possible, then you will need to obtain coverage for yourself (and your family) on your own by taking out a personal policy.
Given the fact that the insurance business in India is still a monopoly, the only decisions one will need to make are very simple: whom to insure (some or all the members of the family); and how much to insure for. This situation is in sharp contrast to that in the USA, where there are a wide variety of medical insurance schemes on offer — and choosing between HMOs (health maintenance organizations) and PPOs (preferred provider organizations) can leave most patients very confused! While taking out a policy is a simple matter ( after all, the insurance company is happy to earn the premium you pay!) getting reimbursement for the expenses you incur can be a tedious process; the company does not want to part with their money.
In the future, with increasing liberalization, as the insurance business in India is opened up to the private sector, many more options will become available for patients to choose from.
Ram Sharma was content he was retiring after he had saved enough for his daughter’s marriage and his son’s higher education that would land him a plum job abroad. Despite his happy frame of mind he couldn’t help but notice the sharp chest pain. He complained to his son who rushed him to the nearest hospital that diagnosed the acute angina and recommended the cardiac bypass urgently. The surgery was successful .The cost: Rs two lakh! Mr. Sharma’s wonderful dreams for his family are shattered into nightmares.
Though this is fiction, a similar situation is quite possible in any family that has not planned for sudden hospital expenses that are not negligible any more. For some the tragedy does not end there. Unable to arrange the huge amounts required for hospitalization the poor man resigns himself to his fate.
In this tragedy lies a great paradox. India is blessed with the best of hospitals having the most sophisticated equipment with our doctors having acquired skills abroad and yet the common man from India is unable to access this type of medical care only because of one reason, and that is money. The solution to this lies in the form of Mediclaim policy.
Medical insurance is commonly known as mediclaim in India. This type of policy covers, up to the limit contracted for, expenses with respect to hospitalisation and treatment. The expenses covered by mediclaim are room and boarding expenses, nursing expenses, fees for the surgeon, anaesthetist, medical practitioner and consultant, fees for specialists, charges for anaesthesia, blood, oxygen and the operation theatre, charges for surgical appliances, medicines and diagnostic materials and charges for X-rays, dialysis, chemotherapy and so on.
The policy works in a slightly different manner as compared with other life insurance policies. This policy can be taken for one year at a time. When you pay the premium for one year, you get a medical insurance for that year. You can renew the policy every year as per your needs. For instance, let us assume that a person buys a Rs one lakh mediclaim policy for this year by paying a premium. In case the person is hospitalised, the insurance policy will cover the expenses. There are two ways in which the policy amount is paid. In some cases, the insurer may have a tie-up with the hospital concerned and in such cases, the expenses are settled between the insurance company and the hospital. This is called cash-less settlement. In other cases, you will have to first pay the expenses and then claim a reimbursement from the insurer.