Types of health insurance

03 June 2019

When you choose a health insurance policy, your medical expenses will be taken care of by your policy provider and in return, you are required to pay an annual fee, called ‘premium’ which can also be paid in monthly instalments. Depending on which policy you opt for and who provides it, health insurance protects your wallet by covering treatment expenses, hospitalization charges, ambulance costs, laboratory costs and other related expenses. Some policies even cover compensation for lost income.

Types of Health Insurance

Indemnity Plan: Until about three decades ago, indemnity plan was the popular type of health insurance. In this case, a certain amount of the hospital expenses is to be paid by you, and the insurance provider will take care of the rest of the bill. You can choose which doctor to visit and the insurance company does not get to decide the hospital or verify whether the visit was necessary. But this autonomy is only to a certain extent. Clearance from the insurance company is still required in case of emergencies, for admission into an emergency room if you are not incapacitated. If you choose Indemnity plan, you will have to pay the whole bill out of your pocket first then claim for a reimbursement.

Health Savings Account: It is a type of Savings account where you contribute some amount, up to a certain limit which is tax free. Unused funds roll over each year and the interest gained is also tax free. It is a good option to those who cannot afford a group health insurance policy and those who are more inclined to tax free health plans.

Exclusive Provider Organization (EPO): Members of an EPO plan will be required to use a defined network of physicians and a Primary Care Physician (PCP) who will provide referrals to network specialists for treatments. However, this condition is not applicable for emergencies. You will be responsible for a small amount of co-payment too.

Point of Service (POS): Just like in EPO pan, POS also provides a PCP to choose from the network providers. In such cases, you will receive higher coverage. However, if you choose a non-network hospital, you may be subject to a deductible (co-payment) and coverage will be less too. Also, you may have to pay up front and then claim a reimbursement.

Add-ons for Health insurance

• Top ups: A top-up plan combined with a basic insurance plan will provide you sufficient coverage with affordable premiums. Top up plan is an additional coverage which kicks in when your health expense crosses the amount covered by your basic insurance plan. While top ups cover the expenditure of a single hospitalization, super top up plans cover the expenses of the entire year over a wide range of illnesses.
• Riders: By adding a rider to your basic health insurance plan, you can expand your insurance coverage by customizing it as per your requirement for an additional charge. There are many riders to choose from- Critical illness rider, maternity rider, personal accident rider etc.,
• Defined benefit plans: Basic health insurance plans generally do not cover non-hospitalization expenses like food, travel expenses of your attendant, medicine expenses and treatment expenses for illnesses which did not cause the hospitalization when you were hospitalized, etc., Defined benefit plans will come to your rescue and provide you an assured pre-defined benefit regardless of your expenses.

Summing up, the importance of health insurance cannot be overstated. It is imperative that you get a suitable health insurance plan for yourself, your spouse, your children and your parents, as early as possible. You can avail of a health insurance plan.