What Are the Pros and Cons of High Deductible Health Insurance in India?

High Deductible Health Insurance in India presents advantages and disadvantages that individuals should carefully evaluate. This type of insurance offers lower monthly premiums, making it an appealing option for those seeking to reduce immediate healthcare costs. 

However, it requires policyholders to pay a higher deductible before insurance coverage kicks in, which can be a financial challenge during unexpected medical emergencies.
So, let’s examine the pros and cons to make an informed decision and encourage better financial planning!

Understanding High Deductible General Insurance

Let’s understand General Health Insurance more clearly. A deductible is the amount you must pay out of pocket before your insurance coverage kicks in for medical expenses. It’s similar to sharing costs with your insurer to manage healthcare expenses.

Example: Let’s say your health insurance plan has a deductible of ₹20,000. If you injure yourself while hiking and require medical treatment costing ₹60,000, you would first pay the deductible amount of ₹20,000. 

Afterwards, your insurance would cover the remaining ₹40,000 of the medical bill. This initial payment ensures that you and your insurer share the financial responsibility, aiming to make healthcare costs more manageable and predictable.

*The information presented is not meant to be a substitute for medical advice. Any suggestions mentioned should be considered for general use only. For expert guidance on any health ailment medical issue or any treatment/procedure, please consult a certified medical professional.

Pros of High Deductible General Insurance

Here are some of the pros of General Health Insurance with High Deductibles: 

• Affordable Monthly Premiums:

HDHPs (High Deductible General Insurance) offer lower healthcare insurance costs, ideal for those with limited incomes. Young adults benefit from preventive care incentives, reducing future health risks. However, HDHPs involve higher out-of-pocket expenses aligned with covered services.

• Medical Expense Awareness:

Due to their high upfront costs, HDHPs require careful service selection. Individuals need strong decision-making skills to manage healthcare expenses effectively.

• Incentivises Wellness-Centric Behavior:

Insurers like Bajaj Allianz General Insurance Company prioritise preventive care to prevent future health issues, shifting from volume to value-based services. Employers collaborate with insurers to promote wellness programs under HDHPs, enhancing employee health and reducing long-term healthcare costs.

Cons of an HDHP

Here are some cons of an HDHP:\

• High Costs Upfront:

HDHPs can be costly initially, causing financial strain during serious health events.

This may deter people from seeking necessary healthcare due to deductible concerns.

• Limited Coverage:

HDHPs do not offer comprehensive coverage, especially for complex health needs.

Individuals may face unexpected expenses, adding financial burden.

• Risk of Underinsurance:

Many with serious health or mental health issues avoid care due to high deductibles.

Insurers need solutions to support those with exceptional healthcare needs.

*Claims are subject to terms and conditions set forth under the health insurance policy.

Who Should Opt for an HDHP for Insurance?

This type of insurance plan may suit a young and relatively healthy person who does not have many urgent needs and is fine with low payments for premiums. Moreover, should an individual feel they have enough money to cover the sudden and various costs and want to benefit from HSAs’ and HDHPs’ tax advantages simultaneously, they may also suit you. Lastly, if an employer contributes to the HSA to discount the high deductible, this may also be a good choice.

Who Should Stay with a Traditional Plan?

Even though this is a good option for some individuals, there are some exceptions for those whose high deductibles are a burden and who would prefer to pay lower premiums. Some young families with children might be spending much money on vaccinations and doctor’s visits.

Conclusion

In India, there are a variety of different options for healthcare services. Therefore, whether the HDHP is right for your healthcare needs is a question you must ask yourself. Besides any financial decision in your portfolio, remaining at a higher level of equity investment is inevitable.

You should also carefully screen the fine print: what the restrictions on your HDHP are, how much of a deductible there is, to what degree coverage applies, how that relates to one’s network, and which doctors are in such networks.

If you’re looking for a High Deductible Health Insurance plan, check out Bajaj Allianz’s General Health Insurance