Paying through the nose for your health

Today, life insurance covers of ₹1 crore have become quite commonplace, but general insurers tell us that the average size of the health insurance policy is still at no more than ₹2-3 lakh.

With increasing life expectancy, most of us can expect to live much longer. But will we be able to fund costs towards our medical expenses?

Amarnath Ananthanarayanan, CEO and MD of Bharti Axa General Insurance, talks of three specific aspects that call for comprehensive health insurance. One, while you will live much longer than your parents, you are also likely to spend much more time in hospitals than your parents or grandparents because there is so much facilitation that is possible.

Pacemakers, for instance, weren’t available a few years ago.

By investing in health cover, you will be able to avail of all the facilities.

Two, at some point in time, every second old person will need some help or care at home. As a working person you can’t provide this care and will need to hire help.

Today, such care is affordable. But going forward, these costs will soar. And finally, we all need to devote more attention to post-retirement healthcare.

In the previous generation, most people worked in the Government and their post-retirement needs were covered under CGHS. Today, that is not the case and you will have to secure that cover yourself.

Rising treatment bills

Given that your medical costs may soar for all the above reasons, how many of you can be certain of funding all the expenses out of savings?

Healthcare costs in India are rising at 12-15 per cent a year and with the poor quality of care at Government hospitals, people have no choice but to knock on the doors of private hospitals. A bypass heart surgery costs ₹2 lakh today.

The cost of knee replacement is about ₹1 lakh. An appendicitis surgery, which cost ₹40,000-42,000 two years ago, costs close to ₹50,000 today.

A simple surgical procedure for tonsillitis, which cost ₹24,000 in 2011, would pinch your purse by ₹28,000 now.

Doctors, health insurers and other industry veterans cite certain common reasons for increasing healthcare costs — one, the increasing cost of drugs and imported medical equipment and, two, inflation in manpower costs.

Take the cost of antibiotics. The new classes of antibiotics that have entered the market over the last few years cost significantly more, say pharmacists.

Harish Manian, Facility Director at Fortis Malar Hospital, a leading hospital chain in the country, says, “For a hospital, 30-40 per cent of running expenses are from pharmacy and consumables, where prices are spiralling every year. And today good doctors are not available for small salaries.”

Advanced technologies It is not just the salaries of specialist surgeons and doctors that are rising but also fees of paramedical staff, nurses and pharmacists that are going up, say hospitals. Healthcare costs are rising also because of the advanced technologies.

K.R. Balakrishnan, Director, Cardiac Sciences at Fortis Malar Hospital and a specialist cardiac surgeon, says, “Illnesses that would have resulted in death 10 years ago can be treated now. The cost of the research that goes into these advancements has to be borne by somebody.”

When patients go for minimally invasive treatments or those that don’t entail long in-patient treatment, say, a key-hole surgery, laser, or a robotic surgery, costs go up sharply, says RKT Krishnan, Director and Chief Executive Officer of GHPL, one of the leading TPA service providers that handles claims of leading health insurers.

Then, the equipment used in most of these advanced diagnostic treatments is imported. For instance, the imported artificial heart pumps used in heart transplantations cost close to a $100,000.

Medical cost inflation is not a problem specific to India, the US is also fighting rising healthcare costs. But in India the worry is that most people don’t have a cover.

Leave aside the cost of treatment, the cost of hospitalisation in terms of room rent, bed charges and other consumables is rising at a rate higher than the headline consumer inflation. So, go for a health cover right away!

Also read: >Why you need to top upyour health cover

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