Medical bills too heavy? Bring down your out-of-pocket costs

In India, out-of-pocket medical costs such as doctor consultation, pharmacy bills and other OPD costs have dramatically increased in recent years. Various reports indicate that out-of-pocket healthcare spending can go as high as over 50% in India. Although this percentage is gradually coming down due to increased awareness and adoption of health insurance policies that financially guard the insured against medical and surgical expenses, the numbers are still remarkably higher than the worldwide average.

Therefore, with health insurance becoming vital for everyone across demographic lines and geographies, and insurance companies devising healthcare policies to meet the evolving needs of the changing consumer, let’s assess some new-age features that will help you bring down your out-of-pocket costs.

Stay fit and avail of wellness benefit

If you have been considering delaying your health insurance policy until your later years, when the possibility of developing diseases increases, you might want to reconsider. The reason is that the new-age wellness benefit in health insurance incentivises policyholders to prioritise their health and fitness. The insurance provider does this by monitoring fitness information, such as steps taken, exercise minutes and heart rate control, to ascertain whether policyholders satisfy their predetermined standards for good health. Those who fulfil the criteria are rewarded with benefits such as a renewal discount of up to 100% on premiums or reward points that can be used to reduce the premium at the time of renewal.

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Savings on doctor consultation

Recent months have seen an increase in visits to the doctor for mild to severe illnesses due to the changing seasons and the XBB1.16 Covid-19 variant, which also exhibits symptoms comparable to the flu. This means an upsurge in overall medical expenses, which in the last few years have skyrocketed due to medical inflation of 14% in the country. For instance, on average, the minimum consultation fees of doctors range from Rs 600 to Rs 1,500 per visit in a metropolitan city. This might seem manageable for an individual, but if two family members seek consultation in a month, it might affect a family’s household budget. But with an OPD cover that includes doctor visits, diagnostic tests, pharmacy expenses, etc, such fees remain shielded despite increasing rates of these treatments during the policy term.

Buying younger

People most often consider purchasing health insurance at a later stage in life. But, if you opt for this policy before age 35, many health insurance companies give bonuses or discounts on the premium at the time of policy renewal. This is mainly because younger customers fall under the lower risk bracket of acquiring severe, life-threatening ailments, which decreases the overall risk for the insurer. Consequentially, take the cost advantage by investing in a robust healthcare plan that adequately protects against unanticipated medical contingencies.

Tax rebate

Where financial protection is one aspect of medical insurance policies, tax savings is another. Section 80D of the Income Tax Act offers policyholders a tax advantage against premiums paid for health insurance. The insured can avail a maximum benefit of Rs 25,000 for themselves and family members under 60 years. However, the claim amount increases to Rs 50,000 if the parents are elderly. The additional deductible limit further increases to Rs 1,00,000 in cases where the policyholder and parents are 60 years of age or older.

Savings on yearly medical check-ups

Being safe is preferable to being sorry. This adage aptly applies to preventive healthcare or taking steps to either prevent the occurrence of disease or detect it at an early stage by undergoing routine testing, screenings, etc. This results in lower OPD expenses and hospitalisation, which can lead to astronomical bills. Hence, with many health insurance policies also encompassing annual medical check-ups, policyholders can get coverage of Rs 2,500-5,000. Moreover, in this case, the insured can also claim for payments made in cash.

To sum up, having a health insurance policy with new-age features is paramount for individuals, especially in today’s time when an unpredictable medical crisis can lead to enormous bills and, thus, severe financial setbacks. Therefore, compare the features, benefits, exclusions and inclusions of different policies online. Also, always read the terms and conditions carefully.

(The writer is Business Head - Health Insurance, Policybazaar.com)