Safety net: Covid-19 cases up, check if policy covers at-home care

Sum insured must be adequate, include consumables like PPE kits

The resurgence of Covid-19 has reignited fears of infection and the financial burden of medical treatment. The importance of assessing one’s health insurance coverage and financial preparedness can’t be overstated.

Inadequate coverage

The previous waves offer a few lessons. “Medical costs tend to shoot up in a crisis. During Covid, hospitalisation was two-three times more expensive than normal. The frequency of hospitalisation also rose,” says Kapil Mehta, co-founder, SecureNow. Many either did not have health insurance or had policies with insufficient sum insured, which was inadequate to meet the expenses of multiple hospitalisations.

Many also had disease-specific plans. “It is better to have a comprehensive health insurance plan rather than a disease-specific one. We don’t know the nature of the next pandemic. Broader covers offer more security,” says Mehta.

Expenses not covered

Even those who had comprehensive policies discovered that they did not cover many Covid-related expenses. They had to pay for them out of their own pockets. “Many policies offered limited coverage for at-home (domiciliary) treatment. Many also offered inadequate coverage for personal protective equipment (PPE),” says Rahul M Mishra, co-founder & director, Policy Ensure.

He adds that many policies had co-payment requirements and high deductibles, which again translated into out-of-pocket expenses (OOPE).

Fill in gaps

Check if your health policy will pay for these expenses. If not, port to a better policy or fill in the gaps with riders.

“Your policy should provide comprehensive coverage, which includes hospitalisation, day care procedures, domiciliary hospitalisation, and treatment of common critical illnesses,” says Naval Goel, chief executive officer (CEO) and founder, PolicyX.

He adds that the policy should offer the option to increase the sum insured and pay a no-claim bonus.

Says Siddharth Singhal, business head-health insurance, Policybazaar.com: “By paying 5-7 per cent extra premium, you can buy a rider that will cover the cost of consumables.”

If the sum assured is inadequate, enhance it or buy a super top-up policy. “Take a basic cover of ~5-10 lakh and then buy a super top-up cover. Opt for a deductible equivalent to the basic policy. This will make the super top-up cover affordable,” says Mishra.

Also consider purchasing a daily cash benefit rider or a standalone daily cash benefit policy. This pays a fixed sum for each day of hospitalisation, which can be used to meet OOPE.

Remember a key point about making a claim for domiciliary treatment. “A registered MBBS doctor must recommend that hospitalisation is a must but can’t be done due to non-availability of beds at a nearby hospital or because the patient is not in a condition to be moved,” says Singhal.

Health care fund

You must also have a health care fund.

“In most claims, about 85 per cent of costs are paid and 15 per cent are outside the ambit of coverage. A health care fund can take care of this. Keep this fund independent of other investments. Put this money in a bank deposit or a short-term debt fund,” says Mehta. He adds that one needs to top this up over time as medical inflation is above 10 per cent.

Systematic investment plans (SIPs) can help. While the amount required in the fund will vary from person to person, ~10 lakh should suffice in most cases.