Rising Healthcare Costs Can Family Health Insurance Be the Answer

Rising Healthcare Costs Can Family Health Insurance Be the Answer

Families throughout the world are becoming increasingly concerned about the rising expense of healthcare. Medical costs may easily go out of hand for both normal checkups and serious diseases, putting people and families in danger financially. Family health insurance has become more well-known in this situation as a possible defence against these rising expenses. But is it really the answer to the financial security of healthcare?

Well, to get the answer, read this blog and understand why and how it is possible. 

Why Are Healthcare Costs Rising?

There are several reasons that contribute to the rise of healthcare expenses. Some are pointed out below:

1.  The Aging Population

As people age, healthcare costs increase. With expensive procedures such as heart bypasses, and knee replacements older individuals expend more on healthcare. This demographic shift has a significant contribution to the rise of healthcare costs.

2.  Increase in Chronic Illnesses

Chronic illnesses such as cardiovascular diseases have in the past years increased healthcare spending considerably. According to WHO chronic respiratory diseases, cancer, and diabetes, are the biggest contributors to mortality in low to medium-income countries like India.

3.  Technological Advancements

Significant investments in developing new treatments for life-threatening illnesses contribute significantly to rising healthcare costs in India. Modern medical therapies, and procedures, along with imported equipment also contribute to this rise.

4.  Rising Insurance Premiums

This is a natural byproduct of an increased healthcare cost, however, many other factors like medical inflation (which is at 14% currently), severity and higher frequency of claims due to the pandemic, higher claim ratios, and many more also led to a 25% increase in premium for a large group of policyholders.

5.  Increased Ambulatory Costs

Ambulatory care costs have increased including emergency room care and outpatient services. During the COVID-19 pandemic, healthcare providers had to shift to virtual services to minimise in-person visits, which influenced this trend.

Can You Fight Healthcare Inflation with Health Insurance?

The Inflation Protection feature under your health insurance policy protects you against rising healthcare costs. The total amount of coverage will increase annually or after a certain number of renewals to account for inflation. This feature helps you remain insured over time and protects you financially in medical emergencies.

When you purchase a family health plan you can enable the ‘Inflation Protection’ option so that the policy’s sum insured in line with the inflation rate will continue to increase periodically. This ensures sufficient coverage for you and your family even when the treatment costs will gradually rise.

From insurer to insurer the percentage and frequency of growth of the sum insured may vary. Some insurers provide a fixed range of increases in a year or a set number of years, and some let you decide the rate or frequency of increase.

However, you should note that you have to pay a somewhat higher premium to opt for this feature.

How Can Inflation Protection of Health Insurance Benefit You?

Here are some of the ways inflation protection related to health insurance will benefit you:

•  Protection Against Underinsurance

As the medical care expenses increase over time inflation protection allows you to have sufficient coverage so that you can pay for the healthcare when you need it and do not stay underinsured.

•  Peace of Mind

With Inflation Protection, you can rest assured that rising healthcare costs will not hinder your ability to afford essential medical treatments whenever necessary.

•  Cost-Effective

Increasing coverage to match inflation makes having a health plan with this feature a cost-effective option for you.

•  Maintenance of the Coverage Value

The inflation protection feature helps to preserve the coverage value by increasing the amount automatically with the inflation. The healthcare costs will rise gradually, but you will have sufficient coverage to get access to necessary treatment.

Things to Consider While Selecting Inflation Protection in Family Health Insurance

Consider the following things before choosing the Inflation Protection feature in your family health insurance plan in India:

1.  Consider Your Family’s Current and Future Needs

Evaluate the family’s current and potential future healthcare needs, including age and family’s medical history when opting for Inflation Protection. It is beneficial if you need extra coverage, otherwise it might be unnecessary.

2.  Understand the Terms and Conditions

You must consider all the Inflation Protection terms like whether it is optional or automatic, the annual coverage increase percentage, maximum increase etc. Knowing these helps you make informed decisions with certainty.

3.  Compare Policies

Before opting for any insurance with Inflation Protection, you must compare different policies to see which one provides more increases than others. Whereas some companies offer automatic increases, others require annual opt-in.

4.  Review Your Policy Regularly

You should review your policy on a regular basis to ensure the proper functioning of Inflation Protection and coverage sufficiency. Make sure this policy addresses your family's present and future healthcare needs.

5.  Cost

It is essential to find a balance between adequate coverage and affordability. Therefore, you must evaluate the expenses of the Inflation Protection and its impact on your premium of the policy.

The Bottom Line

Overall, family health insurance provides some protection against growing healthcare expenses, but it must be used in conjunction with other financial planning techniques and with an awareness of its limits. Individuals and families may strengthen their foundation for their healthcare requirements and financial stability by combining insurance with preventative actions and financial prudence.