NEW DELHI: Kolkata-based Saurabh Basu (name changed) had to be hospitalized as he suffered from a severe lung infection after he was infected by the Covid-19 virus at the peak of the second wave this summer.
Basu underwent a medical procedure called extracorporeal membrane oxygenation (EMCO). The procedure costs Rs 1.5- 2 lakh a day, in addition to the Rs 25 lakh initial cost.
He was in the hospital for a month and his hospital bills exceeded Rs 75 lakh.
Unfortunately, Basu’s health insurance policy and savings could cover only a fraction of the cost and his family had to start a fundraising programme in Ketto.
They targeted a fundraise of Rs 60 lakh, but could only raise Rs 30 lakh.
This is not a one-off case, as people have thronged crowdfunding websites like Ketto and Milaap to raise funds for the treatment of Covid-19 related complications.
Ketto says it hosted over 6,000 Covid treatment-related fundraisers and raised over Rs 80 crore during the pandemic.
There is a lesson in Basu’s experience a standard Rs 5 lakh family floater health insurance plan is no longer enough to cover the cost of medical emergencies.
Due to a lack of quality government hospitals, people have to depend on private hospitals for any medical emergencies.
And with healthcare costs constantly growing at 8-10 per cent a year, they have to fall back on their savings since their health insurance cover falls short of the cost of treatment in private hospitals.
How much is enough?
A Covid-19-like pandemic is a once-in-a-century event and it is not always possible for an individual to be prepared in advance.
But the Covid-19 experience has certainly forced people to review their healthcare preparedness.
The foremost of which is a health insurance policy large enough to cover the treatment of any critical medical condition.
Many financial planners feel that people should get themselves covered by up to Rs 25 lakh through health insurance plans since the cost of medical procedures and hospital stays continue to soar.
Take, for example, the cost of bypass surgery.
The surgery alone could cost anywhere from Rs 3.5 lakh to Rs 5 lakh, on top of which are other costs—such as for medicines, room rents, and specialist fees.
Based on the treatment needed, the hospital could charge a minimum bill of as much as Rs 8-10 lakh.
If you have a family floater health insurance with a Rs 5 lakh cover, you may end up digging into your savings.
And God forbid, if another family member falls sick during the same year, you would be on your own since you have already exhausted your cover.
do you ensure that your health insurance doesn’t fall short?
Reinforce with top-up, riders
One should consider a super top-up policy with sum insured of Rs 25 lakh or more as the premium is reasonably low,” says Pankaj Mathpal, MD, Optima Money Managers.
Top-up plans are additional health covers that you can take over and above the basic health insurance cover. So, if you have a Rs 5 lakh basic cover, you could reinforce it by buying a top-up policy at a fraction of the cost of the basic cover.
For example, a family floater plan for a 4-member family with the oldest member being 30 years could cost anywhere from R,s 12000-15,000 a year.
A Rs 10-lakh top-up plan over the base plan could cost Rs 2,000-3,000 for each member.
The top-up plan kicks-in only when the basic cover has been exhausted.
Sanjay Datta, Chief-Underwriting and Claims, ICICI Lombard, says that even if one has an employer-provided basic health cover, they can buy a top-up plan to increase coverage. They can also buy a rider at a nominal cost.
Riders such as a critical illness cover pay a lump sum amount on the diagnosis of any of the serious diseases mentioned in the policy.
Policies with Rs 1 crore cover
Some health insurance companies have launched innovative products with inbuilt top-up plans like Bupa Health Insurance’s Rs 1 crore health cover a combination of a Rs 5 lakh base policy and a Rs 95 lakh top-up.
Then there are plans with restore benefits, which means if you run out of coverage, the policy will restore your base coverage up to 100 per cent.
There are also plans that increase the base coverage automatically by 50 per cent after 1 year and to 100 per cent after 2 years, even if a claim is made.
Irrespective of how healthy a life one leads, you can be sure that you or your family may face a health emergency at any time.
And the first step in getting ready to face such emergencies is to have a big enough health insurance cover.