The rising costs of healthcare are a growing concern for everyone. As medical expenses soar due to advancements in technology, increased demand for quality care, and higher operational costs, paying for medical treatments out-of-pocket is becoming increasingly challenging. This phenomenon, known as medical inflation, can place a significant strain on your finances. However, health insurance can act as a protective shield, offering a way to manage these escalating costs and ensuring you and your family have access to the necessary healthcare when needed.
What is medical inflation?
Medical inflation refers to the annual increase in the cost of healthcare services, including consultation fees, diagnostic tests, hospitalisation, surgery, and medicines. Unlike general inflation, which affects the price of goods and services, medical inflation tends to rise at a much faster rate. Several factors contribute to this trend:
- Advancements in medical technology: Newer, more sophisticated diagnostic tools and treatment methods come with higher costs.
- Increased demand: A growing population and greater health awareness lead to an increased demand for quality healthcare services, driving prices up.
- Rising operational costs: Hospitals face increased costs for infrastructure, skilled professionals, and high-end equipment, which are passed on to patients.
- High cost of medicines: The prices of prescription drugs, especially for chronic and life-threatening conditions, continue to rise steeply.
These key factors make it increasingly difficult for individuals to afford quality healthcare without adequate financial support. Health insurance offers a solution to this issue, providing a safety net that can mitigate the financial impact of medical inflation.
The impact of medical inflation on your finances
The rise in medical costs directly impacts household finances. A single hospitalisation, especially for critical illnesses, can lead to expenses amounting to lakhs of rupees. The increased cost of treatments, combined with the high cost of medicines and diagnostic tests, means that even a routine medical procedure can be financially draining.
Without proper health insurance, paying for these expenses can exhaust savings, disrupt financial planning, and may even force people to compromise on the quality of healthcare they receive. As medical inflation continues to rise, the risk of financial instability due to unforeseen medical expenses becomes even more significant.
How health insurance shields you from medical inflation
Health insurance is designed to offer financial protection against the ever-increasing costs of healthcare. Here’s how a good health insurance policy can safeguard you from medical inflation:
1. Coverage for rising treatment costs
With medical inflation pushing up the costs of hospitalisation, surgery, and other treatments, health insurance policies provide a comprehensive coverage that includes hospital room charges, doctor consultation fees, medical tests, surgeries, and post-hospitalisation expenses. By covering these expenses, health insurance helps reduce the financial burden on your savings and provides access to the best possible medical care without compromise.
2. Annual sum insured enhancement
Many health insurance policies offer a feature where the sum insured amount is automatically increased at each renewal, commonly known as a cumulative bonus or no-claim bonus. This increase helps keep your coverage in line with the rising costs of healthcare, providing you with enhanced financial protection over time.
3. Cashless hospitalisation
Health insurance policies often provide a network of cashless hospitals where policyholders can avail of treatment without having to make upfront payments. In a cashless hospitalisation, the insurance company directly settles the bill with the hospital, reducing the immediate financial pressure on you. This benefit becomes particularly valuable in emergencies or during expensive treatments where paying out-of-pocket may not be feasible.
4. Coverage for pre-and post-hospitalisation expenses
Medical expenses are not limited to hospital stays; they also include pre-hospitalisation costs like diagnostic tests, medications, and follow-up treatments post-hospitalisation. Health insurance policies often cover these expenses for a specified period before and after hospitalisation, protecting you from a wide range of costs associated with medical care.
5. Protection against medical inflation through top-up plans
To combat the impact of rising medical costs, many health insurance providers offer top-up plans. These plans allow you to increase your coverage by adding an extra layer of financial protection over your base health insurance policy. With the added benefit of a top-up plan, you can ensure that your policy offers sufficient coverage, even as medical inflation drives up healthcare costs.
6. Comprehensive coverage for modern treatments
Advancements in medical technology have introduced new treatment methods that are often more effective but also more expensive. Health insurance policies today cover a range of modern treatments, including robotic surgeries, organ transplants, and stem cell therapy.
7. Tax benefits
In addition to providing financial coverage, health insurance premiums are also eligible for tax deductions under Section 80D of the Income Tax Act. This means that while you are protecting yourself against medical inflation, you can also avail tax benefits, further reducing your financial burden.
Choosing the right health insurance policy to combat medical inflation
To effectively shield yourself from medical inflation, selecting a comprehensive health insurance policy that aligns with your needs is crucial. Here are some tips for choosing the right policy:
- Opt for a higher sum insured: Given the rapid rise in healthcare costs, choose a policy with a high sum insured. This will help ensure that your coverage remains sufficient to cover expenses in the future.
- Look for cumulative bonus benefits: Choose a plan that offers a cumulative bonus or sum insured enhancement feature to keep pace with medical inflation.
- Consider top-up plans: If your base health insurance policy has a lower sum insured, consider purchasing a top-up plan to increase your coverage at a more affordable rate.
- Check for cashless hospital network: Ensure your policy provides access to a wide network of cashless hospitals, reducing the hassle of upfront payments during medical emergencies.
Conclusion
Medical inflation is a reality that continues to push healthcare costs higher each year, making quality treatment increasingly unaffordable. Health insurance is a vital tool that can protect you from the financial strain of these rising costs, ensuring you receive the care you need without compromising on quality. By getting a comprehensive health insurance policy, you can effectively shield yourself and your family from the impacts of medical inflation, securing your financial future and peace of mind.
Disclaimer: T&C Apply – Bajaj Finance Limited (‘BFL’) is a registered corporate agent of third-party insurance products of Bajaj Allianz Life Insurance Company Limited, HDFC Life Insurance Company Limited, Future Generali Life Insurance Company Limited, Bajaj Allianz General Insurance Company Limited, SBI General Insurance Company Limited, ACKO General Insurance Limited, ICICI Lombard General Insurance Company Limited, HDFC ERGO General Insurance Company Limited, Tata AIG General Insurance Company Limited, The New India Assurance Company Limited, Cholamandalam MS General Insurance Company Limited, Niva Bupa Health Insurance Company Limited , Aditya Birla Health Insurance Company Limited, Manipal Cigna Health Insurance Company Limited and Care Health Insurance Company Limited under the IRDAI composite CA registration number CA0101. Please note that, BFL does not underwrite the risk or act as an insurer. Your purchase of an insurance product is purely on a voluntary basis after your exercise of an independent due diligence on the suitability, viability of any insurance product. Any decision to purchase insurance product is solely at your own risk and responsibility and BFL shall not be liable for any loss or damage that any person may suffer, whether directly or indirectly. Please refer insurer’s website for Policy Wordings. For more details on risk factors, terms and conditions and exclusions please read the product sales brochure carefully before concluding a sale. URN No. BFL/Advt./23-24/415
ThePrint BrandStand content is a paid-for, sponsored article. Journalists of ThePrint are not involved in reporting or writing it.