Employer Provided Health Insurance Might Not Be Enough – Know Why

Employer Provided Health Insurance Might Not Be Enough – Know Why
Employer Provided Health Insurance Might Not Be Enough – Know Why
Amit Chhabra - 16 May 2020

Amidst suspended economic activities throughout the country to counter the spread of the COVID-19 pandemic, India’s unemployment rate is surging at a double digit pace. A severe jobs crisis is staring the country in the face as several crucial sectors of the economy have been severely impacted by the coronavirus-triggered lockdown. As per the latest data released by the Centre for Monitoring Indian Economy (CMIE), India’s unemployment rate has surged to 27.11 per cent for the week ended May 3 from the level of 6.74 per cent in the week ended March 15. Currently, the rate of unemployment is the highest in the urban areas at 29.22 per cent as against 26.16 per cent for the rural areas. The estimated overall loss of employment between March and April 2020 is 114 million which implies that one in every four employed persons lost their jobs due to the corona outbreak.

Corporate Health Cover is Never Secured

With more and more people losing on their jobs, they are also losing on social security benefits provided by the employer, the most important being corporate medical insurance. A huge section of the salaried class, especially the younger generation rely on the employer provided health insurance cover to cater to their health care needs. Most people do not bother to buy an individual health cover often thinking that it is an added expense. However, what they often tend to forget is the fact that employer provided health cover is only valid until you are employed with that employer. Once you lose your job, you also loose on your corporate health insurance cover. And loosing on your health insurance cover in the current scenario - with number of corona positive cases increasing everyday – can cost you a fortune.

Cost of Treating Pandemics Like COVID 19

Even after taking utmost precautions and following all the guidelines issued by the government, as many as 35 per cent of the people who have tested positive for COVID-19 till now were asymptomatic - a patient is a carrier for a disease or infection but experiences no symptoms. This means, you never know when you may test corona positive and may require immediate treatment. And then there is the exorbitant cost of treatment of coronavirus infection which may drain all your savings. The cost of COVID-19 treatment in private hospital rooms would cost Rs 2 lakh in tier 3 cities, Rs 3 lakh in tier 2 cities while Rs 5 lakh in metros/tier 1 cities. Covid-19 treatment in private super-speciality hospital rooms would cost Rs 7 lakh in tier 2 cities and Rs 8 lakh in metros/tier 1 cities. In private super-speciality hospitals with ICU and ventilators, the cost would be Rs 9 lakh in tier 2 cities and Rs 12.5 lakh in metro/tier 1 cities. Under such circumstances, it is important to be protected by a comprehensive health insurance policy to cover such high treatment expenses.

A Standalone Health Cover Is A Good Idea

Considering the given COVID-19 situation and the job loss due to this pandemic, buying an individual health cover for you and your family is a sensible thing to do. In the event of you or your family members falling ill due to the coronavirus infection or any other ailment in the future and require immediate hospitalisation, all your expenses will be covered by your health insurance plan. Moreover, the health insurance cover provided by employers usually comes with a limited sum insured i.e. usually around 2-3 lakh which is not sufficient to provide adequate financial support in case of a major illness. A health insurance cover with Rs. 2 lakh sum insured can easily get exhausted within a few days of hospitalisation at a good private hospital in a metro city. In order to avoid being trapped in such a situation, it is always safe to go for an individual health cover with an enhanced sum insured of at least Rs. 15- 20 lakh.

The Last Words

While buying a health cover, there are numerous factors that one must consider including your age, the number of dependents, pre-existing diseases, if any and the city of residence. It is suggested to go for an independent policy rather than group policy as a group cover does not always includes pre-existing diseases. Another important reason why you must consider buying an individual health cover is that usually the employers negotiate with the insurers on numerous important aspects such as number of critical illnesses covered, inclusion of dependents, and minimum and maximum sum insured. The employers do not always focus on providing the best to the employees when covering under a health insurance. The employer provided health cover often misses on major critical illnesses and surgeries that you or your family may be prone to, given your medical history.

The author is the Head of Health Insurance at Policybazaar