Comparing Health Insurance Plans: What to Look For

There are so many health insurance plans in the market that can vary widely based on who they're for, how old you are, and what health issues you have. Compared to finding the right plan that suits you, comparing them can feel daunting.

But at the end of the day, it's important to find a plan that covers what matters to you, be it coverage for pre-existing disease, ongoing conditions, or specific treatments. More importantly, knowing you have the right plan in place will give you peace of mind. So to attain such peace of mind, let's understand what to look for when comparing health insurance plans.

Sure, there are many factors to consider, but a few key ones stand out- the ones that will shield you from distress in your time of need. Here's a look at what they are.

Top 10 Factors to Compare Health Insurance Plans

1. Network hospitals

Not having to pay any cash during hospitalisation can be of huge convenience, especially during a medical emergency. When you or a loved one is in the hospital, you would already be stressed out. You don't want the extra worry of arranging a large sum of money upfront for the treatment.

So, to make things easier for you in such events, the insurance company has a network of hospitals tied up with them that would provide cashless treatments. This means you don't have to pay anything and the company will deal with all the expenses.

But if you happen to get hospitalised in a hospital that's not in their network, you'll have to do everything from paying upfront cash cash to filling out forms and collecting bills. Then make sure to send all the documents to the insurer to start the reimbursement process. Sounds real complicated right? Well, it is.

So it's important to choose a plan with a large network of hospitals(ideally between 5000 and 8000+) Also, make sure to check if this network of hospitals includes your preferred hospitals and doctors closest to your location.

2. Claims settlement ratio

The claim settlement ratio is calculated by -

(Total number of claims settled in a year by an insurer / Total number of claims filed to the insurer across the year) * 100

For example, if the company has a CSR of 95%. It means they settled 95 claims for every 100 claims received that year.

A higher CSR tells us that the company has a better track record of settling claims efficiently and is good at processing and approving claims. This would mean less hassle and quicker access to your benefits. Ideally, a CSR of 90% or more is outstanding. A range of 80-90% is also acceptable. However, any insurer with a CSR below 80% or over 100% is not recommended.

3. Affordability

After considering the company metrics, the next important thing to do while choosing a plan is to find a policy that is not too expensive but also has all the features you are looking for.
Striking this balance is the key. So, make sure to use a free tool to compare the best health insurance plans and find a policy that comprises all the required features at affordable premiums.

4. Waiting period

If you have any specific illness, are undergoing any medical treatment or have had any surgeries in the past. You will need to disclose this information while buying a policy, and these conditions can land you waiting periods ranging from 2 to 4 years.

Understanding the concept of a waiting period can help you find the best plans based on your conditions. Basically, a waiting period is a specified length of time during which the insurance company will not cover certain illnesses or treatments.

Now, waiting periods are quite common in health insurance. However, there are plans that will offer you shorter waiting periods and will cover you from day one, which can be a huge win sometimes. So, if you can't avoid waiting periods, finding plans with low waiting periods is ideal.

5. Co-payment

Health insurance plans with copayments are best avoided. Even if the insurer offers you to reduce your premiums in exchange for you opting for an optional copay, don't step into that trap unless you are a senior citizen or one with a pre-existing medical condition that is making it impossible for you to avail of a plan or your premiums are getting incredibly high.

With a copayment in place, you will end up paying a sizeable portion of the hospital bill along with the health insurance premium. Considering that health insurance plans are supposed to safeguard your savings during health scares, copayment defies the purpose of purchasing a health insurance plan. Hence, seek plans that require no copayment.

6. Room rent restriction

Room rents form a substantial portion of the hospital bills. Usually, with the best health insurance plans, there are no room rent restrictions, indicating that no matter the cost of your room, the insurer will cover it. And this is the ideal situation you should seek in your health insurance plan.

It is extremely important that you have a health insurance plan that has no room rent restrictions, or else you will end up paying not just the additional amount (the amount by which you exceed your daily room rent cap) but also a pro-rata-based share of the entire hospital bill. This means you will be digging into your pocket significantly despite having a health insurance plan.

7. Disease wise sub-limits

Disease-wise sub-limits are the maximum amount that an insurer extends for the treatment of a specific ailment. They could be a fixed amount or a percentage of the total sum insured.

For instance, consider a scenario where your insurer has set a disease-wise limit of 2.5 lakhs on your 15 lakhs cover-in this case, it's a limit on cardiovascular diseases.

If the hospitalisation costs related to cardiovascular diseases are around 6 lakhs, the insurer will only cover 2.5 lakhs, even if your total coverage is 15 lakhs. You will have to pay the remaining amount.

So, it's crucial to understand these sublimits when choosing a health insurance plan. Ideally, a plan with no disease-wise sub-limits is preferred.

8. No Claim Bonus (NCB)

If you stay fit maintain a healthy lifestyle, and don't make any claims for the year, the insurance company will reward this behaviour by providing you extra coverage on top of your base cover. This bonus is called a no-claim bonus.

Typically, NCBs are credited as a percentage of your insured amount. The higher the No-Claim Bonus, the better. You can also opt for some riders that shield your No-Claim Bonus if you make a nominal claim.

Conclusion

Now, it's true that multiple health insurance policies are being offered across the industry as a response to the increased demand for such plans. However, the presence of so many options across insurers and health insurance policies might seem a tad bit confusing. So, it's crucial to know how to compare the best health insurance plans in the industry and opt for one that is feature-rich, affordable, and comprehensive. You can also use a free comparison tool to tally the health insurance plans and ensure that they align with your financial bandwidth and medical requirements.