Medical expenses are so high these days that the very thought of getting sick makes you feel ill!
Did you know that a simple appendectomy which cost Rs.28,000 in 2007, costs about Rs. 42,000 now? Similarly, five years back you could have had a bypass surgery with Rs. 1,65,000 but now you’ll have to shell out Rs. 2,35,000 for the same. Scary, isn’t it?
As we can see, healthcare is a rising cost and so health insurance inflation is unavoidable. As a result, we all must plan for the future and rather than focusing on your immediate health care needs alone, we must also pay some serious attention to the medical costs in the future. Health insurance therefore should be seen as an investment for the future and the sum assured should be fixed accordingly.
Taking a look at the expected rise in rates of healthcare costs
“The average annual health insurance inflation would be at 5%, if you look at 30 years duration. The hospitals do not increase their tariffs every year. Generally, they increase it by around 15-20% every 2-3 years. This would effectively come to 5% CAGR.” This is what the CEO of Medimanage, Mr. Sudhir Sarnobat, had to say about the rise in costs.
This is a cause for worry, as after 30 years, your medical bills could well be unaffordable! Insurance companies, in an attempt to sell their policies, target healthy, young people who are made to believe that a small coverage amount is enough. Most people therefore do not consider the issue of inflation and face problems in their post-retirement years when the insurance is actually needed.
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Tackling the problem of health insurance inflation
The above figures surely point towards a discouraging trend. Therefore, you have to be prepared for the future and you would be happy to know that a little bit of financial planning can go a long way in making the situation easier.
First and foremost, begin by following a healthy lifestyle. There are many avoidable medical conditions. For example, obesity is a huge problem today. Did you know that other ailments such a high blood pressure and even heart attacks sometimes stem from obesity? So improve your diet, exercise regularly and stay fit. This will help you to deal with the rising medical costs.
Then, start saving. Build up a proper fund. This should combine all the possible tools to cover your health costs in the future. A good health contingency fund should include:
- Adequate health insurance – Make sure you buy a long term health insurance plan, ideally one that would stay active for the rest of your life.
- Critical illness plan/rider – You must most definitely opt for a critical illness plan so that in case you are affected by a critical illness, your base health plan won’t get disturbed. If you do not want to invest in a separate critical illness plan, buy a critical illness rider along with your health plan.
- A contingency fund – Maintain a contingency fund at all times. Be disciplined and pour in some money into the fund regularly. Do not touch this fund till a medical emergency arises. Saving in small amounts over a long period of time would indeed prove to be helpful to you now as well as in the future.
Conclusion
Healthcare costs cannot be ignored. You will fall ill no matter what at some point in your lifetime. So be prepared for the worst while hoping for the best. Follow the tips mentioned above and you will surely be able to tackle the issue of health insurance inflation.
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