Are you covered enough to fight Medical Inflation?

Last Updated: Apr 20, 2022 | 2,236 Views
During my last visit to the hospital, I realized how much medical attention we need! This is one of the only costs that cannot be ignored, delayed, or even compromised. Are we equipped enough to pay for the healthcare expenses? If not, then why are we delaying or compromising when it comes to transferring risks in the form of Health Insurance?

"It was unacceptable that almost 80% of the expenditure on healthcare by people was met by personal, out-of-pocket payment. I am shocked to note that as many as 4 crore people of our country plunged into poverty each year due to expenses on medical treatment," President Pranab Mukherjee had said while addressing the 40th convocation function of All India Institute of Medical Sciences (AIIMS) in New Delhi.

One of the primary concerns of the nascent health industry in India is the low penetration of insurance vis-à-vis medical inflation. Even if regular inflation is about 7-8% p.a., medical inflation has overshot the figure by far. It is about 20% while only 5% of healthcare expenses are paid by Insurance. The worrying fact is that basic awareness of healthcare needs and insurance is still considered an expense despite the fact that 95% of healthcare expenses are still borne out of pocket!

Medical inflation includes hospitalization, OPD benefits, diagnostics, etc. and it increases due to the rising cost of treatments and medicines in our country along with advanced medication and higher mortality. The average mortality rate has gone up to 70 years from 64.19 years in the last 3 years. This is a sharp rise of 5.81 in just 3 years. It simply means that the number of older people has increased in our country and adequate healthcare provisions are missing for them. Thus, supply to demand has reduced which has further helped the rise in cost.

Hence the fright of Medical Inflation has been a big concern. If you check a simple hospitalization bill, you will realize what I am saying. Ignoring medical cover can easily set one back by Rs. 8 to10 lakhs during any hospitalization. When your near and dear ones are in need of the best medical services, the last thing you want to worry about is how to incur the medical expenses. Irrespective of your profession, caste, or creed, each and every person needs adequate health protection. Even if you can afford to pay the bills, why do you want to deplete your savings in one go? Why not be a smart investor and transfer the risk of your health by securing coverage and also getting an additional tax rebate for doing the same? If you think working hard is important, managing your portfolio, both investments and health, are also of importance.

Points to consider:
  • Are you adequately covered for yourself and your family, beyond the cover provided by the office?
  • What have you planned for your healthcare requirements post-retirement?
  • Are your parents covered?
  • Consider these points, reassess your health requirements and take adequate coverage right now, instead of waiting till the need actually arises, when the insurance company might not even extend the coverage!

Deepak Yohannan
Deepak Yohannan is the CEO of MyInsuranceClub. He enjoys writing on Personal Finance and contributes regularly on sites like Reuters & Moneycontrol. He is a strong proponent of online insurance and is often found pointlessly babbling about it!