How to deal with rising medical bills?

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Health care cost has been rising in the country for various reasons. The use of new medical protocols, particularly after Covid-19 have increased the general cost of hospitalisation. Technology advancement is another reason for higher healthcare costs. For instance, curing cancer via advanced treatment methods like CyberKnife, is around 7-8 times more expensive.

According to statistics, out-of-pocket expenditure as a percentage of total healthcare expenditure in India is currently around 70%. Increasing healthcare costs is not the only shock. Health insurance policies have also become expensive by 30% -40% after the standardisation rules directed by the insurance regulator have come into effect from October 2020 onwards. Now the health insurance policy covers a wide range of illnesses varying from mental illness, HIV, Alzheimer’s and Parkinson’s, among others. In such a scenario how to keep yourself prepared against rising healthcare costs.

How to deal with rising medical bills?

Here are a few tips to avoid getting into the debt trap due to rising healthcare costs:

Emergency fund

Always create an emergency fund for medical contingencies by investing in fixed deposits or short term mutual funds. Do not lock money for the long term as you may suddenly need cash. The short term saving avenues are the best to park your money for emergency purposes.

Insurance portfolio

It is always good to create an insurance portfolio that can take care of different kinds of medical emergencies. Here is how:

Individual health plan: This should be your first level of protection. It is an indemnity policy that reimburses the medical bills on hospitalization. For those with a spouse and kids, a family floater policy is the better option. In family floaters, the sum insured can be availed by any or all members of the family and not a single person. Moreover, the premium is much lower in individual health plans.

Critical illness plan: These are lumpsum policies that pay the entire sum insured if the person gets diagnosed with any of the critical illnesses. It can be bought either as a separate policy or as a rider attached to your life or health insurance policy. The policy is useful to add another layer to your health protection portfolio.

Daily hospitalisation plan: These plans reimburse the insured a certain amount on a daily basis. The hospital expenses that are not covered under basic health plans can be taken care of by the daily hospitalisation plan.

Disease-specific plans: These plans are made for specific diseases such as Cancer and diabetes. One can buy these plans if one has a family history of particular illnesses. Similarly, there are also  specific plans for Covid-19 and vector-borne diseases such as malaria, dengue, among others.