As such, there is an increased demand for cashless insurance that can offer enough protection against unexpected medical costs.

In FY21, health insurance witnessed a 13.3% growth in gross direct premium (GDPI). And the online individual insurance market opportunity is estimated to grow to $1.25 bn by FY25

Even people who were distrustful of insurance firms and depended on personal savings to pay for medical expenditures before the pandemic has learned that personal savings are grossly insufficient for medical emergencies.

As such, there is an increased demand for cashless insurance that can offer enough protection against unexpected medical costs. But choosing cashless health insurance is easier said than done. Besides the usual suspects like co-pay, deductibles, sub-limits, and room rent capping, there are curveballs that can expose your bank balance to dip into the red.

OPD

Over 60% of your healthcare expenses are attributed to Outpatient Department (OPD) expenses such as visiting a doctor, paying for prescriptions, and diagnostics tests. According to reports, Indians visit a doctor three times a year on average and a diagnostic test is prescribed in every 3.5 consultations.

According to the 75th NSO health survey, people who do not need hospitalization outnumber those who do by 122 times in urban India.

Yet, most insurance plans are still bought to cover for hospitalization costs which means while you’re paying premiums whilst also spending a large chunk of your savings on out-of-pocket health expenses.

Insurance companies now offer health covers with OPD. But there are either caps on the annual expenses or an introduction of co-pay. All this with an increase in your premium vs premium paid for only IPD. So choose a plan that gives you enough OPD coverage.

Non-payables

The IRDAI usually has a list of up to 200 items of non-payables or non-medical expenses that it exempts insurance companies from paying. For example, an arm sling, mask, urine bags, clean sheets, visitors’ passes, medical records etc. All of these have to be borne by the patient or their family out of pocket during hospitalization. On average, these expenses account for 10% of your hospital bill. But we’ve seen them go up as high as 50% during the pandemic.

Insurance companies are working towards reducing the list of non-payables to appeal to consumers and reduce the percentage of expenses borne by the patient.

Ambulance charges

Ambulance charges are payable by the insurance company but even the best insurance plans cover ambulance expenses only up to Rs 10,000. Calling an ambulance in a city like Bangalore costs around Rs 2000 for the first 10 km and Rs 120 per extra kilometer with waiting charges of Rs 250 per hour.

Uncontrolled hospital environment

Nobody can accurately predict what you will end up spending after you enter a hospital. A regular doctor visit may follow a series of unexpected tests, a surgery with a standard line of treatment may meet with complications shooting up the final cost.

An uncalculated decision in choosing the sum insured can lead you to pay surprise charges at the hospital that your insurance company cannot be held responsible for.

You’re buying health insurance for the worst-case scenario so if you can afford a higher premium, you should go for a high sum insured. Most personal finance experts recommend a minimum health cover of Rs 5 lakh or at least 50% of your annual income.

Your active lifestyle

It is ironic that an active lifestyle can negatively impact your hospital experience. But here’s why that could happen. All health insurance plans have permanent exclusions for injuries arising from sports or adventurous activities. So if you’re active and enjoy taking risks, better keep some extra change in your pocket.

The devil is in the details when choosing a health cover for yourself and your family. Investing in a cover that can protect your finances against medical inflation is more important than ever.