The improvement of medical infrastructure and treatments over the past few years has been remarkable. However, with this advancement, the cost of healthcare in India is increasing.

India’s healthcare system comprises both public and for-profit private providers. With a substantial presence of private institutions, 69.8% of total outpatient care falls under them. However, treatments from private service providers typically cost more.

According to NCBI, the estimated annual cost of universal healthcare will be ₹1,713 per person. This cost can increase by 24% for using branded medical supplies and drugs. The Indian government must spend 3.8% of the country’s GDP to universalize healthcare services.

With significant growth in infrastructure, the cost of healthcare is shooting up. Although advanced technology has sped up the treatment and curing process, it hasn’t eased the medical expenses for a large belt of Indians.

The current annual rate of medical inflation is 15%. Conversely, India’s overall inflation rate is 6-7% annually. Health expenditure currently stands at 5% of India's private final consumption expenditure. This can increase by a minimum of 11% from the current level of India. Gradually, the cost of healthcare in India is becoming unaffordable for people with financial drawbacks.

Healthcare financing in India involves a range of methods, each with its own implications for individuals and the overall system. Here’s a breakdown of the primary methods:

1. Out-of-Pocket Expenses

Out-of-pocket expenses refer to the direct payments made by individuals for medical services and treatments. This method often burdens patients financially, especially in the absence of health insurance. The costs can vary widely depending on the type of treatment and the healthcare facility, leading to financial strain or debt if medical issues arise.

2. Government Subsidies

The Indian government provides subsidies to make healthcare more affordable for low-income groups and vulnerable populations. Programs like Ayushman Bharat, which includes the Pradhan Mantri Jan Arogya Yojana (PMJAY), offer financial assistance by covering a portion of healthcare costs for eligible beneficiaries.

3. Insurance Schemes

Health insurance schemes are designed to share the financial risk associated with medical expenses. Various types of health insurance are available:

• Private Health Insurance: Offered by private insurance companies, these plans provide coverage for various medical services, including hospitalisation, surgeries, and outpatient treatments. Premiums and coverage levels vary based on the plan.
• Government Health Insurance Schemes: These include schemes like Ayushman Bharat and state-specific insurance programs. They are often aimed at low-income families and provide coverage for various medical expenses.
• Employer-Sponsored Health Insurance: Many employers provide health insurance as part of their employee benefits package. These plans often extend coverage to employees and their families, offering various medical services and treatments.

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As discussed above, healthcare in India is becoming way too expensive for many people. In such a situation, health insurance can be beneficial in many ways.

Here are some advantages:

1. Doesn’t affect your savings

The sky-rocketing treatment costs can be a huge burden for most individuals. Especially in the case of a fatal disease, these costs continue to exhaust your savings. In such a condition, a health insurance policy can cover your treatment expenses. Thus, you need not spend all your savings on treatment.

2. Helps cover critical medical conditions

Medical costs in India for critical conditions like organ failure or stroke is relatively higher. A health insurance policy will cover certain charges that you may suddenly face in such times.

3. Cashless Treatment

You can receive cashless treatments if you have insurance since different hospital networks collaborate with your insurance provider.

4. Pre and Post Hospitalisation Cost Coverage

Depending on the insurance plans chosen, the insurance policy will also pay pre- and post-hospitalisation costs for a maximum of 60 days.

5. Transportation Fees

The insurance policy also covers the money paid to the ambulance for the insured person's transportation.

6. Medical Exam

Insurance policies also provide options for health examinations. Certain insurers also offer free health checks based on your prior NCBs.

7. Medical Exam

Insurance policies also provide options for health examinations. Certain insurers also offer free health checks based on your prior NCBs.

8. Room Rent

Depending on the insured's premium payment history, the insurance policy may additionally cover lodging costs.

9. Benefit to the IRS

Section 80D of the Income Tax Act allows for the tax deduction of health insurance premiums.

Choosing the right health insurance plan is essential for ensuring you get the coverage that best meets your needs and budget. Carefully evaluating your options can help you select a plan that provides optimal protection and financial peace of mind.

1. Assess Your Needs

Consider your health status and any medical conditions to choose a plan that covers your needs comprehensively, including any pre-existing conditions.

2. Compare Coverage

Evaluate different plans based on coverage for hospitalisation, pre- and post-hospitalisation expenses, and additional benefits.

3. Consider Your Budget

Balance the cost of premiums with the coverage offered. Include potential copayments and deductibles in your budget to ensure affordability.

4. Check Network Hospitals

Ensure the plan includes a broad network of hospitals, particularly those conveniently located and offering quality care.

5. Review Insurer’s Claim Settlement Ratio

Research the insurer’s claim settlement ratio to gauge reliability. Look for positive customer reviews and service ratings.

By evaluating these factors, you can select a health insurance plan that aligns with your needs and budget, providing the coverage and protection you require.

Not buying health insurance can expose you to significant financial and health risks. Understanding these risks is crucial for making informed decisions about your healthcare coverage and protecting your financial stability during difficult times.

1. High Out-of-Pocket Expenses

Without health insurance, individuals are responsible for the full cost of medical treatments. This can be financially devastating, especially in the case of a serious illness or injury. The burden of these expenses can lead to significant financial strain and stress.

2. Limited Access to Quality Care

Uninsured individuals may delay or forgo necessary medical care due to concerns about affordability. This can result in poorer health outcomes and the progression of diseases to more advanced stages. Timely medical attention is crucial for effective treatment and recovery.

3. Financial Instability

Medical emergencies can lead to substantial debt and financial instability for those without insurance. Health insurance helps to mitigate this risk by covering a significant portion of medical expenses. This offers financial stability and peace of mind during health crises.

4. Inadequate Preventive Care

Without insurance, people are less likely to access preventive care such as vaccinations and regular check-ups. This can increase the risk of undiagnosed and untreated health conditions. Preventive care is essential for maintaining long-term health and early detection of issues.

5. Higher Overall Healthcare Costs

Uninsured people often pay more for medical services compared to those with insurance. This is because they do not benefit from the discounted rates that insurers negotiate with healthcare providers. The lack of negotiated rates can result in higher overall expenses for medical care.

6. Potential for Medical Bankruptcy

Big medical bills can lead to bankruptcy, which health insurance can help prevent. By covering major healthcare costs, insurance provides financial protection and reduces the risk of falling into financial hardship. This protection is crucial for safeguarding financial stability.

7. Increased Stress and Anxiety

A lack of health insurance can cause constant worry about potential medical emergencies and their costs. This ongoing stress and anxiety can negatively impact mental health and overall well-being. Financial concerns about healthcare can contribute to significant emotional distress.

8. Limited Access to Specialised Treatments

Uninsured people may find it difficult to afford specialised treatments or medications necessary for managing chronic or severe conditions. Access to these critical treatments is often more feasible with health insurance. Without it, managing complex health issues can become difficult.

The cost of healthcare in India is increasing day after day without any doubt. It also becomes an immense distress if you seek treatment from a metropolis. Under such circumstances, a health insurance policy helps you avail yourself of quality treatment without risking your savings. Understanding which insurance policy to buy is an important decision for people. Take care of yourself and your family with the best insurance policy.