In this age of ever-increasing medical costs, a comprehensive approach to health coverage, using both group and individual health insurance policies is vital to protect your finances and health.
Group health insurance comes with its inherent limitations such as coverage ceasing upon you leaving your organization, potential coverage restrictions, and lack of customization.
Group Health Insurance
Santosh Puri, Senior Vice President- Health Product & Process, TATA AIG General Insurance said “Group health insurance policies are typically catering to needs of employer-employee groups. In such policies, the employer is the key decision-maker for various coverages/benefits offered or restrictions in terms of coverage (such as co-payment, room limit, disease-wise capping, etc.)".
"These policies are renewable on an annual basis primarily based on the discretion of the employer. The risk posed by the employees is that the employer may choose not to renew the policy and employees are left with no health insurance coverage from the employer. Also once the employee quits the organization, the group health insurance coverage offered by the employer ceases to exist. Hence, depending solely on group health insurance can be a significant oversight for individuals," Puri added.
Another important thing to note is that while group health insurance plans offer broad coverage depending on the needs of the employer-employee group, there can be huge out-of-pocket medical expenses if the coverage offered is restrictive or if such a plan has various cost-sharing mechanisms in the policy.
Further each year, a fresh group health insurance policy is issued, leading to changes in terms and conditions each year. If the group insurer modifies coverage aspects, like excluding pre-existing conditions for profitability or increasing the premiums it can dent your budget. It would be just a matter of time before they acquire enough market shares and would have to deal with more claims, causing them to take such drastic steps to protect their profitability.
Sapna Desai, Chief Marketing Officer at ManipalCigna Health Insurance shed light on another aspect saying, "Group health insurance often comes with limitations such as lack of customisation. Further, employers can only cover up to a specific amount in group health insurance. So, medical treatment or hospitalization costs may become unaffordable if critical illnesses, such as kidney failure, cancer, or heart issues need to be addressed."
What To Do?
Santosh Puri, emphasised the need for additional individual health insurance to mitigate gaps in protection.
"Having individual health insurance policy is a good option. Individual health insurance policy offers tax-saving benefits under the old tax regime. One can also explore complementing the group health plan offered by employers with aggregate deductible policy offered to individuals for ensuring adequate protection,” Puri said.
If you purchase a plan with a health insurance deductible clause you have to pay a portion of the medical or hospitalization expenses out of your pocket before you can make an insurance claim.
However, this comes with a lower premium and you can use it only if and when your group insurance fails to fully cover treatment costs for a disease.
Sapna Desai, Chief Marketing Officer at ManipalCigna Health Insurance, shared the same opinion highlighting, "As time passes, you might find it challenging to purchase an individual health cover, especially when meeting your post-retirement health issues."
Group health plans only allow adding a limited number of members like dependent parents, spouses, and children. However, a private family health insurance plan can extend coverage to siblings, in-laws, grandparents, and more.
"Having individual health insurance coverage is a smart choice where you can choose the right health insurance plan for you and your family and will peace of mind knowing your health is covered even if you lose your job," Desai added.
