Gopabandhu Mohapatra
“Health is wealth” is a common phrase. Yet we understand the true meaning of the expression only when we fall sick or get hospitalised, resulting in medical expenses, physical pain, emotional distress, and financial strain. Surveys have shown that ill health and its related costs are the biggest causes of indebtedness in rural India, with one-fourth of the rural population in the poorest groups falling into a debt trap to pay for healthcare.
In India, public healthcare facilities are never adequate to meet the healthcare requirement. Generally, patients have to rely on the more expensive private healthcare services. Lifestyle-related ailments are common these days. Healthcare is becoming increasingly expensive. It is difficult for a family to quickly arrange for huge amounts of money required for treatment. Most savings of a family are in the form of fixed assets, which cannot be liquidated quickly. Moreover, in certain critical illnesses, the cost of treatment can be exorbitant, causing severe strain on family finances and their savings are rarely sufficient to meet such expenses. Due to liberalisation of economy and general awareness, the health insurance industry, launched in 1986, has brought tremendous improvements in the quality of life and affordable healthcare to many, and it is popularly known as Mediclaim. The purpose behind buying health insurance is that if you or a family member needs medical treatment, at least the need for immediate finances are met through medical insurance. Usually, the minimum age for entry is 5 years and maximum is 60 years, whereas the proposer must be over 18 years of age. One can avail the facility up to old age by renewing the policy every year.
It is advisable to buy a single policy for all members of the family. It gives cover for the entire family, which could be utilized by one or more members failing sick. Please note that pre-existing diseases are not covered for a certain period, depending on the terms of the policy. Usually, medical cover of Rs 3 lakh to Rs 10 lakh will keep you free from financial anxiety on the medical front. There is no need to carry cash to the hospital because one can avail cashless treatment. Mediclaim usually has features such as reimbursement of expenses or cashless treatment by paying directly to the hospital towards charges for doctors and nurses, OT charges, medicines, blood, donors expenses towards organ transplant, oxygen, diagnostic materials, x-ray and so on for 30 days or so and certain pre-hospitalisation and post hospitalisation charges are also reimbursed, but you cannot make a financial income from the process. While claiming the expenses, please remember to submit every document that is relevant and do not miss to collect the discharge certificate and all medical documents with doctor’s seal and signature.
The basic requirement is reimbursement for treatments that requires hospitalisation for a day or more, for disease or accidents. It covers all expenses even before and after the actual hospitalisation period. Ideally, with cashless settlement you should be able to walk into a network hospital, give them your card number and get treatment without paying a paisa. In case of pre-planned hospitalisation, you should get it pre-authorised from third-party administrators (TPA). A TPA is an important intermediary between the insurance company and the hospital. It verifies your policy details, on behalf of the insurer, and gives clearance for the cashless services to be processed. The insurance company will examine the claim and will settle the claim as per eligibility and will settle the claim with the hospital directly.
In case of an emergency, you can avail cashless treatment through a network hospital by showing your health card. Buying a cashless settlement mediclaim policy would be of no use if the insured has to either pay the hospital himself, and get it reimbursed later, or run from pillar to post for the ‘pre-paid’ facility.
Under the Income Tax Act, (Section 80D), the insured person who avails the policy can claim tax benefit of Rs25,000 for self, spouse and dependent children and Rs50,000 for parents, who are senior citizens.
With so many features, the demand for health insurance has grown at 25 per cent per year, driven by rapidly increasing awareness, and is going to develop even more rapidly in the future. But, there are reports of fraud and manipulation by clients and providers, which have implications for the growth and development of this sector. Monitoring systems are weak and there are chances that if the doctor and patient collude, they can do more harm to the system. Various mechanisms such as identity issues, masking, bundling, unbundling and upgrading are used by providers to charge insurers more and defeat the purpose of providing access to good quality healthcare with adequate facilities and skilled personnel at an affordable cost. While buying a policy, people don’t find out the expenses and surgeries it covers. So, when a TPA rejects their request, the customers feel cheated.
In the present day hospitalization treatment, the first question the patients face at the time of admission in a hospital is not about their illness, but whether they have insurance. The price for a patient without insurance is usually less than for a person with insurance. Hospitals in their defence say that the differential pricing is done as insurance companies take up to six months to clear bills.
The Insurance Regulatory and Development Authority of India will need to evolve mechanisms by which it puts some kind of statute in place to ensure that private insurance companies do not skim the market by focusing on rich and upper-class clients, in the process neglecting a major section of India’s population.
The writer is a retired banker. e-Mail: gopabandhumohapatra@yahoo.co.in