‘Medical Inflation’ is a term which describes a situation wherein the per-unit expenses and average of the healthcare services increase over time. This comprises the costs of the new procedures and treatments, and their widespread services and availability.
As per the reports of the year 2021, India had recorded the maximum rate of medical inflation of about 14% amongst all the countries of Asia, followed by China at a rate of 12%, Vietnam and Indonesia at 10%, and Philippines at a rate of 9%. This left a direct impact on the consumers since the premiums of health insurance policies also went on a rise. In the financial year 2021-22, the retail premium increased by 16.5%, and the group health insurance premiums went up by 31%.
As per the reports of the Indian Health Insurance by Motilal Oswal Financial Services Limited, the demands for the health insurance policies saw a total growth of 25% in the financial year 2021-22. Several policyholders raised their coverage of health insurance policies because of the rising medical inflation. A rise of 10% is anticipated on a global basis for the year 2023. As per the Global Medical Trends Survey of 2023, about 78% of the total number of insurance providers across the world have been preparing for the rise in their premiums which are higher than that in the past three years.
Medical science has seen an everlasting growth in the last couple of years. Balloon sinuplasty, robotic surgery, cyberknife, and several other treatments have now become the ‘new normal’. The rate of survival for the treatment of life-threatening diseases have been increasing, thereby reviving hopes amongst the patients. However, these technological advancements have resulted in an all-time high in the medical expenses, which have ultimately resulted in the alarming rise at a rate which is close to double of the market inflation currently. Well, medical emergencies aren’t foreseen, and so are the rising medical expenses. Here are a few ways you can take in order to curb the medical inflation:
You should maintain a work-life balance, develop healthy eating habits, exercise regularly, and stay healthy physically and mentally, in order to avoid the need to go to the hospital to spend your hard-earned money for the rising treatment expenses.
You can resort to several sources of growing your income by investing in NPS, gold, mutual funds, shares, and more. This will enhance your financial strength, thereby making it easier for you to deal with the medical expenses which may arise suddenly.
Last but not the least, opt for a medical health insurance plan wisely. Use an online health insurance premium calculator in order to compute the premiums offered by several insurers and choose the one that best suits your requirements. These health insurance policies will provide financial coverage for your hospitalisation, medical, and treatment expenses at a very nominal premium amount.
As discussed above, it has become quite evident that purchasing a health insurance plan is one of the best and the most fundamental ways to curb medical inflation. The probability of easing up this situation in the near future is not very high. In fact, the prices are expected to rise even more because of the perpetual rise in medical inflation.
In such situations, if any medical emergency arises, it could severely impact your financial well-being, especially if you don’t have a health insurance policy for a financial backup. With the right investment plans, financial budgeting, and savings, it is possible to take care of your medical expenses. However, having an insurance policy has become a mandate and the best way to stay informed is by being informed about the several policies offered by different insurers in the market.Following are a few ways which will help you mitigate or negate the effects of medical inflation and stay immune to the rising premium hikes:
When it comes to choosing a health insurance policy, people tend to purchase the ones with a cheaper plan with lesser sum insured, offering very limited coverage. However, it is imperative to consider the increasing medical inflation. Hence, it is necessary to choose an insurance policy which has an adequate insured amount with a minimum sum of Rs. 5 Lakhs for self and about Rs. 15 Lakhs to Rs. 20 Lakhs for a four-membered family. If you choose a basic plan with a low insurance premium and then topping it up with a super top-up policy, you can make it cost-effective. This will ensure that every benefit of an advanced plan is covered, however, at a much lower cost.
A multi-year health insurance plan is generally a long-term investment, hence, it offers additional discounts on the rates of premium. The discounts generally range from 5% to 10%, and this will help you save a lot of money. Moreover, these plans do not get affected by the hiking premium costs as a result of rising medical inflation.
The hospitalisation expenses have been running high, hence, it is not very possible in order to gauge the expenses beforehand. Having a double insurance cover with an add-on feature, therefore, will bring about financial stability and relief whenever needed. It will also provide double the insured sum in order to be used for the same claim. This will ensure that you receive maximum financial benefits and security.
It is imperative that you maintain the base insured sum during an insurance policy’s tenure in order to avail the benefits of any insurance policy. With the above-mentioned feature, you will be able to restore the base insured sum as many times as it exhausts in an insurance policy’s year for the illnesses which are unrelated. This stabilises your base insured amount, thereby, enabling the availing of every benefit of your respective insurance policy.
If you choose an insurance plan which provides more loyalty benefits and no-claim bonus (NCB), it will prove to be extremely beneficial for you. NCB is nothing but a reduction in the insurance premium price which is awarded to you if you raise zero claims until its renewal date. The loyalty benefits are offered to the policyholders with zero additional costs at the time of renewal irrespective of claims or zero claims. The benefits include the extra coverage on various features and they keep on increasing with every renewal and coverage, thereby helping you save a lot of money.
If there are cases of emergencies, the accessibility to healthcare facilities becomes increasingly important. Hence, you must ensure that your insurance provider has a huge network of hospitals and within your accessible vicinity. This will make it more convenient for you and reduce your out-of-pocket medical expenses a great deal.
Adopting these techniques may not mitigate your immediate expenses, however, they will help in reducing your long-term expenses which are influenced by the rising inflation. This will also ensure that you receive maximum coverage for yourself and your family. You must stay informed about the rising rates of inflation and premiums, and opt for smarter ways to stay immune to these increasing expenses.
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