Types of Health plans in India
Listed below are four categories under which most of the health plans in the country can be classified.
Basic Plans
These are basic insurance plans that provide coverage for hospital stays longer than 24 hours. Typically, these also provide pre- and post-hospitalization coverage. These plans typically have sub-limits on costs like room rent. In some procedures, they limit the amount you are entitled to. Some of the plans additionally demand that you split the insurer's claim fees with them (Co-Pay). If you prefer to go to the most expensive hospitals, then do not go for these plans. The various sub-limits may be restrictive and you may end up paying a lot of money because of the various sub-limits imposed by the plan, even if your sum insured is not exhausted. Most of the plans restrict daily room rent to 1% of the sum insured. As a result, if, for instance, your sum insured is Rs.2 lakhs and the hospital charges Rs.3000 per night for a room, you will incur a loss of Rs.10,000 within 10 days of your hospitalization. The prices for these plans are very reasonable and appealing. Find out the price of a room at the hospital you have chosen, whether there are any restrictions on operations, and whether your insurance company has negotiated discounts with the facility before choosing one of these. These plans are also beneficial for those who don't mind paying when their costs exceed the limits of their plan. For those who reside in tier II and tier III cities, these are excellent plans. Make sure the insurer has a cashless facility for your favorite hospital as well.
Standard Plans
These plans resemble the Basic plan in many ways; however, they don't have any sub-limits. They might also provide further advantages like transportation for emergency medical services. The premiums are greater than those for the basic plans because there are no sub-limits. The additional premiums may, at times, be up to 25% more for the removal of limits. Make sure the insurer has a cashless facility for your favorite hospital as well.
Superior Plans
These plans cover expenses like hospital cash for non–medical expenses, expenses for persons accompanying the patient in the hospital, and convalescence benefits. Insurers tend to limit the amount they pay for these expenses. For example, insurers will pay hospital cash of Rs 250 for 10 days per hospitalization. You tend to pay much higher premiums for these additional benefits, so keep an eye on the additional premiums compared to standard plans. In our opinion, the number of benefits these plans offer doesn’t justify the higher premiums. If you can pay these out of your pocket our suggestion is that you skip these covers.
Premier Plans
These are high-end plans and these provide many additional benefits like restoring your sum insured, nursing benefits, OPD, dental cover, and so on. While these plans will offer many additional benefits, the premiums tend to be very high.
Conclusion: Insurance should cover expenses that you cannot pay for yourself. They should be used to cover out-of-the-blue expenses that can hurt you financially. It may not be wise to use insurance to cover every single expense that you are likely to incur. Cover the big ones and pay yourself for the smaller ones. The insurer will then provide you with competitive premium rates because they would understand that you have some stake in the outcome. For example, we do not see much point in paying an extra premium of RS 300 for hospital cash cover that pays a maximum of Rs.2500. It is possible that most of us can very easily pay Rs.2500. You can use that RS 300 to buy yourself additional hospitalization cover for say another 20,000. One thing you must check for is to ensure that the insurer has a cashless facility for your preferred hospital(s). Otherwise, you may have to pay first and then get reimbursed. For high hospitalization expenses, it may sometimes be difficult for you to organize that cash.
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