In our busy lives, there is always the possibility of falling ill unexpectedly and necessitating costly treatments. There are chances that someone close to us may be suffering from a chronic ailment that needs long-term care. In such situations, health insurance is necessary. Health insurance ensures that long-term treatment does not put a family’s finances at risk. A complete health insurance plan may be obtained by paying a small charge to the insurer. This will protect your finances against the unexpected costs of medical procedures. In this way, health insurance serves as a safeguard for both funds and healthcare.
However, exclusions are common in health insurance coverage. In the case of excluded conditions, the insurer will not pay claims. There are some circumstances in which cashless treatment is not possible. In this case, you must pay for the treatment. This is why you should also establish a healthcare fund.
Before discussing further the need for healthcare funds, let’s first understand the difference between health insurance and a medical claim policy.
Most people get confused between health insurance and mediclaim. Even though both provide financial protection during a medical emergency, mediclaim is not synonymous with health insurance.
A mediclaim policy is a type of health insurance policy that reimburses the policyholder for medical expenditures incurred while treating their medical condition. If you have medical insurance, you can submit your invoices for payment to the insurance company. You can also choose cashless treatment, which makes the insurance company and hospital administration liable for settling medical expenditures.
The main difference between the two is that health insurance is comprehensive and covers several medical expenses, including hospitalisation, while Mediclaim typically only covers hospitalisation-related costs.
The coverage offered under health insurance extends to pre- and post-hospitalisation costs, daycare treatments, ambulance charges, domiciliary care, and AYUSH treatments, while mediclaim insurance pays/reimburses bills incurred during hospitalisation, be it due to an accident, chronic illness, or surgery.
However, the coverage amount of a healthcare policy can go up to crores while in mediclaim, coverage amount is limited.
Insurance for Alzheimer’s Disease
Critical illness insurance that covers Alzheimer’s disease is not the same as a traditional indemnity-based health plan. The insurer pays the money covered in a lump sum upon diagnosis of the specified critical illness covered under this policy.
If your doctor suggests a particular course of medical treatment, you can use the sum insured to pay for care, treatment, and recuperation. The funds can also be used to pay off debts, compensate for lost income, and, in some situations, adjust to lifestyle changes.
Why do you need a separate healthcare fund?
Pre-existing diseases are not covered under health insurance for almost four years from the date of purchase of the policy. A situation could occur wherein an individual is admitted to a non-network hospital in an emergency, and the patient has to pay their bill first and then claim reimbursement.
The situation can become worse for retirees who have developed serious ailments and need regular care from medical assistants. Health insurance policies have their own limitations, and to overcome these limitations, everyone needs a separate healthcare fund.
Commenting on the need for a healthcare fund, Sanil Basutkar, co-founder of Bharatsure, told Zeebiz.com, “Diseases like Alzheimer’s are covered under critical illness riders of a health insurance policy. Generally, the insured gets a lump sum amount on detection of these diseases, which ensures that the insured does not have to worry about filing claims. There are also standalone critical illness policies that can be purchased. They are also bundled with certain life insurance products. Based on the coverage you select, you may even get coverage up to Rs 2 crore, which will be paid out in the event you get diagnosed with such diseases. In the absence of these products, it would be very difficult to manage treatment expenses. It is thus very important to ensure that these riders or products are bought along with your policy. However, medical expenses can be unpredictable, and it would still be wise to set up a healthcare fund to manage any emergencies.”
However, there are also a few plans available in the market which don’t cover expenses related to hospitalisation. But these plans are always on the higher side of purchasing costs. Besides, the treatment for diseases like Alzheimer’s is quite expensive, and it may exhaust your policy claim fund.
Now, the question is: how much of the healthcare fund should be kept aside? The total sum required for a healthcare fund will differ based on the level of care required. In the event of a metropolis and a Tier-II town, the charges will be staggered. The costs of skilled resources are similarly considerable. A skilled nurse, for example, may charge between Rs 1,000 and Rs 1,200 for a day shift at the patient’s house. If you have to buy or rent modest equipment, the expenses quickly pile up. Healthcare inflation must also be considered.
Commenting on this, Sharad Mathur, MD & CEO, Universal Sompo General Insurance Company Ltd, said, “In the contemporary landscape, Alzheimer’s disease exerts a deep impact, not only on individuals’ emotional well-being and that of their families, but also on their financial balance. The monthly expenditure for therapy, medication, and travel outlays alone approximates to Rs 72,000. The exigencies of Alzheimer’s often involve a range of medical services fluctuating between Rs 5,000 and Rs 14,500 per session, inclusive of consultations with neurologists, psychiatrists, physiotherapists, speech therapists, music therapists, and occupational therapists.”
“While grappling with the financial outages required for Alzheimer’s care, it is imperative to accept that conventional insurance schemes may fall inadequate. Specialised Critical Illness policies, offer a predetermined benefit upon confirmation of diagnosis. This disbursement can be allocated towards obtaining essential equipment, settling outstanding debts, and accommodating substantial lifestyle adaptations brought by the disease. Critical illness policies are subject to annual renewal, with premiums inclined to rise in tandem with advancing age. This emphasises the prudence of availing such policies at earlier part of life, for it to ensure affordability and also long-term advantages. Establishing a healthcare reserve for elderly parents, supplementing the emergency fund designated for routine expenditures. This reserve assures access to optimal care while mitigating financial pressures,” Mathur added.