Is Your Parents’ Health Insurance Enough for 2024’s Rising Healthcare Costs?

As parents grow older, seeing healthcare costs spiral upwards can feel alarming. Many adult children start wondering if Mom and Dad’s existing health insurance will adequately cover their potential medical bills and medication expenses in the years ahead. It’s a worrying scenario. We want our loved ones to have access to the best possible treatments if health issues emerge. However, advanced technologies and innovative drug therapies that save lives frequently accompany high price tags that many older insurance plans simply fail to account for and prepare for.

In this blog post, we’ll take a closer look at the projected rise in Indian healthcare costs and whether your parents’ existing health insurance provides sufficient financial protection given the present-day realities of hospital bills and drug costs.

Why Are Healthcare Costs Increasing in India?

Several key factors are causing healthcare spending in India to rise steadily:

• Advanced Technologies & Treatments: One of the major contributors to rising healthcare costs in India are the treatments now on offer at top hospitals. We now have advanced surgical techniques, Cancer therapies, and various procedures that use the latest and greatest medical technology and equipment. Such complex offerings often have astronomical price tags attached.
• Increased Lifestyle Diseases: As lifestyle diseases like diabetes, strokes, and heart disease become common, their treatment costs also increase. More Indians have adopted diets higher in sugars, carbs, and fats, while physical activity has been reduced. So, unfortunately, we’re seeing more cases of “diseases of affluence”.
• Medication Costs: Then there is the skyrocketing cost of long-term medications, especially for serious illnesses like cancer or autoimmune conditions. For the latest speciality drugs used to manage these diseases, monthly costs can be quite high. While the effectiveness of modern targeted therapies is far superior, their pricing seems to know no bounds. For countless middle-class Indian families, this translates into devastating financial struggle and debt on top of coping with enormous health challenges.
• Hospitalisation Expenses: Non-medical hospital costs like room rent, fees, etc., are also witnessing an uptrend. Private hospitals charge heavily for special wards/private rooms.
• Inflation: General price rises in the healthcare sector also impact the cost of treatment, drugs, tests, etc., making them more expensive.

Why Health Insurance Cover May Become Insufficient

With rapidly rising treatment costs, health insurance for parents with low covers or sub-limits may no longer fully protect your parents’ savings. Some reasons why their insurance may fall short include:

• Outdated Policy: If using an old policy, the sum insured would not have accounted for today’s medical inflation. Procedures that cost Rs 2 lakh earlier could cost Rs 5 lakh today.
• Inadequate Sum Insured: Policies that cover under Rs 10 lakh often prove insufficient, especially for critical illnesses or procedures like organ transplants.
• Sub-limits On Expenses: Many policies apply a capping on expenses like room rents, ICU charges, etc., which the policyholder must pay from their pocket.
• Newer Technologies Uncovered: Advancements like robotic surgery, immunotherapy for cancer, etc., may not be covered if introduced after you bought the policy.

How To Evaluate If Health Insurance Is Sufficient?

To determine if your parents’ current health insurance for parents adequately shields their retirement corpus and savings, consider these factors:

Adequacy Of Sum Insured

Evaluate if the existing sum insured is adequate to cover possible medical situations they may encounter, like heart procedures, cancer treatment, joint replacement, etc. It is prudent to have at least Rs 10-15 lakh cover when above 60 years.

Review Policy Inclusions/Exclusions

Carefully check what outpatient and inpatient services are covered and what is excluded or has sub-limits applied. Look for waivers, OPD coverage, restoration benefits, etc., that enhance coverage.

Waiting Periods Applicable

Pre-existing disease waiting periods, typically 2-4 years long, may deny claims related to any previous illnesses initially. This can impact renewal eligibility and premiums, too.

Cashless Hospitalisation Facility

A cashless facility at good hospitals nearby is a major advantage. Reimbursement claims require you to first pay the hospital bill. This can interfere with timely treatment. Cashless treatments allow you to get treatment without arranging for a large sum of money.

How To Enhance Parents’ Health Insurance?

Based on the above analysis, you may find gaps that necessitate boosting their coverage. Some good options include:

• Top-Up Plans: Additional coverage to supplement base policy sum insured as per need. Useful when base cover is inadequate.
• Super Top-Up: Covers expenses over the basic threshold (e.g. Rs 5 lakh). Offers high cover at a reasonable premium.
• Critical Illness Plans: Ideal to financially protect against heavy expenses related to critical illness treatment.
• Family Floater: Insures you and your parents under one policy. Offers the advantage of total high coverage with an easier claim process.

Conclusion 

Ultimately, health insurance for parents should keep pace with rising healthcare costs. The idea is to secure enough insurance coverage to handle sizable medical shocks without draining your finances. Preventive checks and wellness maintenance are equally essential.