Frequently UnAnswered Questions: Health Insurance

One recent survey shows that about 400 Million people in India do not have health insurance.

Health insurance coverage is a financial protection plan that helps cover the costs of medical expenses, such as doctor's visits, hospital stays, surgeries, and prescription medications. You pay a premium (monthly fee) in exchange for the insurer's promise to pay a portion of your medical bills.

Types of Health Insurance Plans in India

India offers a variety of health insurance plans to cater to different needs and budgets. Here are some common types:

#1 Individual Health Insurance Plans

Individual Mediclaim: This is the most basic type of health insurance plan. It covers hospitalization expenses and related medical costs for an individual.

Family Floater: This plan covers hospitalization expenses for the policyholder and their family members under a single policy, often offering discounts on premiums.

Critical Illness Plans: These plans provide a lump sum payment if the policyholder is diagnosed with a critical illness listed in the policy.

Personal Accident Plans: These plans cover accidental death or disability.

#2 Group Health Insurance Plans

Employer-Provided: Many employers offer group health insurance plans to their employees.

Association Plans: Professional associations or groups may offer group health insurance to their members.

#3 Government-Sponsored Health Insurance Schemes

Ayushman Bharat Pradhan Mantri Jan Arogya Yojana (AB-PMJAY): This is a government-sponsored health insurance scheme that provides free healthcare to families below the poverty line.

Pradhan Mantri Suraksha Bima Yojana (PMSBY): This offers accidental death and disability cover for individuals aged 18-70.

Central Government Health Schemes (CGHS): This offers provides healthcare services to central government employees, pensioners, and their dependents.

Rastriya Swasthya Bima Yojana: This scheme is for the unorganized sector, for people below the poverty line.

Mahatma Jyotiba Phule Jan Arogya Yojana (MJPJAY): The Mahatma Jyotiba Phule Jan Arogya Yojana (MJPJAY) is a health insurance scheme in Maharashtra, India that provides financial assistance to families for quality healthcare. 

State-Specific Schemes: Several states in India have their own government-sponsored health insurance schemes like MJPJAY.

#4 Other Health Insurance Plans

Senior Citizen Health Insurance: These plans are specifically designed for senior citizens, often offering additional benefits or discounts.

Travel Insurance: This type of insurance covers medical expenses incurred while traveling abroad.

Key Terms in Health Insurance

Deductible: This is the amount you must pay out-of-pocket before your insurance coverage kicks in. For example, if your deductible is Rs. 5,000, you'll need to pay the first Rs 5,000 of your medical expenses before your insurance starts covering costs.  

Co-pay: Co-pay in India is a common feature in health insurance plans. It's a fixed amount that you pay out-of-pocket each time you receive a covered medical service. This amount is typically lower than the full cost of the service.

Co-insurance: Co-insurance is another common feature in health insurance plans. It's a percentage of the cost of a covered medical service that you're responsible for paying after your deductible has been met.

Out-of-pocket maximum: This is the maximum amount you'll have to pay out-of-pocket for medical expenses in a given year. Once you reach your out-of-pocket maximum, your insurance will cover 100% of your covered medical expenses for the rest of the year.

Note: Understanding these terms can help you better understand your health insurance plan and manage your healthcare costs.

Factors to Consider When Choosing a Plan

1. Coverage:

• What is included in the plan? Ensure the plan covers the medical services you're likely to need, such as hospital stays, doctor's visits, prescription drugs, mental health services, and preventive care.
• Are there any exclusions or limitations? Some plans may exclude certain conditions or treatments.

2. Cost:

• Have a good understanding of terms like Premium, Deductible, Co-pays, Co-insurance, Out-of-pocket maximum.  

3. Network:

• Who is in the plan's network? The network determines the healthcare providers and facilities you can use without paying extra costs.
• Are your preferred doctors and hospitals in the network? Consider your location and the availability of specialists within the network.

4. Pre-existing Conditions:

• How does the plan handle pre-existing conditions? Some plans may have waiting periods or exclusions for pre-existing conditions.
• Are there any coverage limitations or exclusions for pre-existing conditions?

5. Quality of Care:

• Research the health insurance company: Look for reviews and ratings from independent organizations.
• Evaluate the reputation of the network providers: Consider factors such as patient satisfaction, experience, and board certifications.

6. Additional Considerations:

• Customer service: Look for a company with a good reputation for customer service.
• Flexibility: Consider whether the plan offers options for customizing your coverage.
• Portability: If you may need to move or change jobs, ensure the plan is portable.
• Mental health coverage: If mental health is a concern, check the plan's coverage for mental health services.
• Dental and vision coverage: Some plans may offer dental and vision coverage as separate options.

Health Insurance Marketplaces

Health Insurance Marketplaces are online platforms where you can compare and purchase health insurance plans. These marketplaces are typically run by government agencies.

Key benefits of using a marketplace:

Comparison shopping: You can easily compare plans from different insurers.

Eligibility for subsidies: You may be eligible for government subsidies to help lower your premiums.

Simplified enrollment: The enrollment process is often streamlined through the marketplace.

Assistance: Marketplace representatives can provide guidance and support.

Health Insurance Tax Benefits

Health insurance in India offers several tax benefits under the Income Tax Act. These benefits can significantly reduce your taxable income and, consequently, your overall tax liability.

Under Section 80D, you can claim a deduction of up to ₹25,000 per annum for health insurance premiums for yourself and your family, with an additional benefit of up to ₹50,000 for premiums paid for your parents.

Additionally, under Section 80DD, you can claim up to ₹75,000 (₹1,25,000 in case of severe disability) for a disabled dependent, and under Section 80U, you can claim a deduction for disability certified by a medical practitioner.

Conclusion

In conclusion, having a healthcare insurance is a necessity to protect yourself and your family from any mishaps that may demand a large sum of money. If you don’t have one already, prioritize taking one and also reduce your taxes.