Heath insurance
All human beings are naturally prone to different diseases and ailments, the propensity of which increases with the increase in age. So at some point of time in life, everybody requires the protection of Health Insurance under which the insurer agrees to cover the medical and ancillary expenses related to the treatment of any disease contracted during the policy period [including accidental damages and infirmities] which includes Hospital charges [including domiciliary hospitalization], Surgeons or physicians charges, cost of medicines, diagnostic tests, blood, oxygen, ambulance charges, cost of appliances like Pacemakers, artificial limbs and so on.
Whereas some insurers cover the domiciliary treatment also subject to some conditions of deductibles or co-payments, some insurers totally exclude this. To differentiate domiciliary treatment from Domiciliary Hospitalization, we should remember that the treatment outside a Hospital or Nursing Home, which should have been taken only in a hospital but could not be taken due to some valid reason, is known as Domiciliary Hospitalization. The reason could be non-availability of cabin in the hospital or the condition of the patient is such that he/she can not be moved to the hospital or so. In that case, it is desirable that all amenities available in a hospital should be made available to the patient outside also. All other normal treatment outside hospital or even in the out-patient department of a hospital is known as domiciliary treatment.
The coverage under a Health Insurance policy varies widely under one plan to another, from one insurer to another, from one country to another. So anybody willing to take this cover should first decide on the extent of cover one requires. Necessary consultation with the familys primary care physician may help to decide the extent. Then the prospective buyer may contact an Agent or Broker of an insurer for information on the plans available to have the desired coverage and affordable cost of the plan. The cost of the plan is the consideration in money payable to the insurer which is known as premium. An agent or broker can explain the detail benefits available under different plans of different insurers so that the prospective buyer of the insurance can decide a plan which maximizes the benefits for a minimum or desired level of costs. Alternatively, a number of insurance service portals are available on the internet which may offer the same help. Further you should take into consideration the different options available to you under Credit Card Insurance, policy of the employer or that offered by the spouses employer and their extent of coverage.
Let us now have a cursory look at the different types of insurers available in the market. There are both private and state-owned insurers who operate with a profit motive. Then some Health Insurance plans are available from non-profit organizations which are known as Blue Shield or Blue Cross services benefit plans in USA, Canada, UK and some other countries. There are self insured companies or voluntary or professional organizations which offer Health Insurance benefits to their employees or members and their family members. There are some prepaid health service plans which offer medical covers either after a certain age in future or subject to certain conditions. Further, there are primary Health Maintenance Organizations [HMOs] or Professional Provider Organizations [PPO] who offer various health insurance covers. The responsibility of administration of sales of Health Insurance plans lies with the State Insurance Department of various states in USA and other regulatory authorities in different countries.
After having knowledge of different types of insurers offering health insurance benefits, let us now examine the various types of insurance plans available. Basically, Health Insurance benefit plans may be divided in two groups, one is Group Coverage plans and the other is Individual Coverage plans. The group coverage is, as the name suggests, for a homogeneous group of persons, say a community, members of an association, and employees of an organization or any section of public in general having a common criteria like a selected income group. The coverage is normally wider with less deductibles and lesser premium due to availability of Group Discount depending on the size of the Group. Individual coverage is formulated depending on the individual need and requirements of a particular person.
Further bifurcation is possible on the basis of coverage. The plan may offer benefits under Hospital Indemnity Coverage or Domiciliary Treatment coverage or a combination of both. The wider the coverage, the higher is the cost of cover. As explained elsewhere, many insurers in many countries do not cover the domiciliary treatment at all or only in a limited range with high deductibles or co-payment.
Co-payments or Coinsurance payments are the percentage of cost of medical treatment incurred which the insured or buyer of the insurance has compulsorily to pay, say 20%, while the rest 80% is paid by the insurance company. Whereas the deductible is fixed sum to be borne by the insured, say $5 per each consultation with the physician, while the balance is settled by the insurer.
Generally there are four levels of compensation available under different health insurance plans offered by different insurers.
(1) Hospital Expenses,
(2) Surgical Expenses,
(3) Physicians Expenses,
(4) Major Medical Expenses or Critical Illness Expenses.
Many permutations and combinations of the above levels are available in the market in different plans of different insurers. Some restricts the cover at one level under different plans while some offers two and three in one package and offer the rest in add-on packages available only on payment of additional premium. Some companies offer all benefits under a single plan with level wise limit while some puts a single limit on the overall expenses. But simple Critical Disease Covers are relatively cheap where the specified diseases like Cancer, Heart Transplant or Pacemaker etc. are only covered. Some insurers attach a Stop Loss Clause to the Health insurance covers offered by them under which the buyer of the insurance pays a certain percentage of actual expenses incurred, say 30%, up to a certain fixed amount, say, $5000 and thereafter, the insurance company pays 100% of the expenses for health care. There may also be limit of expenses on a certain type of treatment or a certain head of expenses. It is always advisable to obtain at least the base plan and the Major Medical coverage which may help you at the maximum with an optimal cost at the hour of need.
Normally these plans are available for a period of one year or more but some companies offer short term plans also. These plans are always subject to Pre-existing disease condition though in some countries all plans are subject to this condition. So it is desirable that a prospective buyer of this vital insurance cover should understand the basic connotation of this clause. The pre-existing condition lays down that any medical care and treatment expenses incurred in relation to a disease or infirmity, which was existing at the time of taking the health insurance plan and was also within the knowledge of the insured that he/she is suffering from the same disease or infirmity, can not be covered under the scope of the policy or plan. The short term plans are normally offered for a period of 57 days to 365 days and they compensate for the major benefits like room and nursing charges, laboratory tests, Blood and blood tests, cost of equipments and consultancy, Ambulance charges, prescription drugs and home health care facilities.
Finally if we scrutinize the base plans of health insurance, these covers offer a wider scope in terms of coverage but a low Sum Insured with nil or small deductibles at an affordable rate of premium. The scope can be widened on payment of additional premium like inclusion of maternity benefit or wider scope of coverage. In contrast, the Major Medical Insurance plans, offers a high value coverage for a high Sum Insured, say $5,000,000 with limited scope of coverage, subject to Pre-existing Disease condition [as already explained] and waiting period condition [which means that the insured is to wait for a specified period, say 15 days, for the first time he/she takes the cover plan. This is not applicable to continuous renewal] and a number of exclusions.
To speak about the exclusions, some of the major ones are:
i) Maternity benefit including medical abortion and sterilization,
ii) Self inflicted injury
iii) Mental Health, Insanity, Depression
iv) Cosmetic surgery
v) Dental Treatment
vi) Benign prostatic Hypertrophy, Hysterectomy for menorrhagia on fibromyoma, Hernia, Hydrocele, Congenital internal disease, Fistula in anus, sinusitis and related disorder in the first year of the contract of insurance.
vii) Cost of optical lenses and hearing aids
viii) Routine Physical Examination
ix) AIDS or other Deficiency Syndrome.
However, it is to be noted that there is no universal rule of exclusion applicable to all the insurance plans offered by any insurer and one has to take a decision keeping in view the risk profile of each individual to be covered under the policy, alternative options or additional arrangement available or existing, extent and monetary limit desired, relevant cost of insurance and its affordability and service mode of the provider and the deductibles and exclusions. But whatever may be the final choice, the sooner the importance and inevitability of these insurance dawns, the better will be the prospect of effectiveness of the health insurance.
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