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How to ensure there is no out of pocket expense in health insurance

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Hospitalization costs because of medical inflation are rising. On buying a health insurance plan, a small fraction of the coverage amount goes as premium to the insurance company. A policyholder, therefore, expects the insurer to pay the entire hospitalization bill amount to the hospital. However, there could be instances when the insurer pays only a partial amount and the policyholder has to bear the balance as out-of-pocket expenses. In spite of having a medical insurance cover, a policyholder may have to pay a portion of the bill to the hospital.

Also read: 26% growth in health insurance premium recorded; 12% of claims related to covid-19 – ICRA

“According to SecureNow’s internal research based on a sample of over 500 recent claims, approximately 20% of the bill amount is not reimbursed,” says Kapil Mehta,Co-Founder, SecureNow Insurance Broker.

Mehta shares three instances when cashless health insurance policies do incur out of pocket expenses:

a. When expenses are higher than the sum insured, the difference is paid out of pocket by the patient. As per SecureNow’s research, certain diseases such as cancer and medical occurrences such as maternity are pocket-heavy, have high per-day costs, and can reach the ceiling sum insured limit very quickly.

b. There are certain non-payables listed by the insurer that includes consumables and other administrative expenses. These are usually required to be paid out-of-pocket by the patient.

c. Insurance usually covers OPD costs for 30 days prior to the admission (pre-hospitalization) and until 60 days after discharge (Post hospitalization). Beyond this, the expenses are incurred out of pocket.

While purchasing a health insurance policy, keep a few important things in mind to make sure there are no out-pocket expenses or they are kept to the minimum.

There is no fixed rule to decide on the amount of health cover. Based on the city where you reside, type of hospital, your medical history etc, decide on the amount of coverage. “It’s advisable to choose a higher sum insured if one can afford a higher premium. In metro cities, a sum insured of Rs 15 to Rs 20 lakh is suggested,” says Mehta.

Further, there are OPD plans available with health insurance companies that cover Doctor consultations, Diagnostic tests, Pharmacy expenses amongst other coverage.

Remember, between the cashless and reimbursement health cover plans, the out-of-pocket expense could be more in the case of the latter.

Most health plans do not cover consumables and administrative expenses incurred during hospitalization. “Consumables could make up anything from 5% to 15% of your hospital bill, depending on the services available. One can avoid this cost by considering a small add-on rider to your health insurance plan,” says Mehta.

Lastly, the most important feature in health insurance covers that could pinch your pocket is the existence of sub-limits in them. All the expense heads such as doctor fees, ICU charges etc of a hospital bill are pegged to the room-rent of the hospital. If you exceed the room-rent as applicable to your policy, the claim will get proportionately reduced. Therefore, make sure either you hold a plan without any sub-limit on room rent and other expenses or stick to the room rent applicable as per your plan.

“The room- rent sub limits help keep costs down. However, if it is important for you to stay in a single room with no caps then you should buy insurance without this restriction – many products are available. Here I would suggest that you buy insurance with minimal disease or procedure related sub-limits,” adds Mehta.





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