Catastrophic Health Insurance

How can catastrophic health insurance help you tide over financial loss incurred due to medical emergencies? Before that, what is catastrophic health insurance? The health insurance policies that cover all the basic benefits and provide coverage for emergencies at low monthly premiums are termed catastrophic health insurance plans. If you are wondering- how much does catastrophic health insurance costs or what does catastrophic mean in health insurance, here are all the answers you should know.

 

Few insurance plans cover medical emergencies and preventative care at affordable monthly premiums. One such health insurance plan is catastrophic health insurance. Catastrophic health insurance plans were introduced in 1973 for medical workers and medicare beneficiaries in the United States. 

 

If you ask what is covered by catastrophic health insurance, you must know it depends on the type you choose. In India, the most appropriate health insurance plans that cover catastrophic events are top-up, and super top-up health insurance plans. A top-up plan provides extended coverage over the basic insurance plan and is very useful for a single event of hospitalisation whereas a super top-up plan covers all medical expenses throughout the year. 

 

It is to be noted that a top-up catastrophic health insurance plan covers the insurance holder’s medical expenses once it crosses a certain threshold limit or the deductible. For instance, if an insurance holder has a base insurance plan with an insured sum of ₹8 Lakhs and a deductible of  ₹3 Lakhs. In case that person’s medical expense crosses ₹4 Lakhs, ₹1 Lakh will be paid by the super top-up plan.

Important Update (Dated May 30, 2024) – Good news for Health Insurance policyholders! According to the Master Circular on Health Insurance Business 29052024 rolled out on May 29, 2024 by IRDAI, insurers are to decide on the request for cashless claims within 1 hour of receiving the request. Also, the final claim is to be granted within 3 hours after the policyholder’s discharge from the hospital. Insurers have been directed by IRDAI to establish necessary systems and procedures for this process by July 31, 2024.

 

The Master Circular on Health Insurance Business 29052024 circular is available here - https://irdai.gov.in/document-detail?documentId=4942918

The essential benefits that are covered under catastrophic health insurance plans include:

• Fees for all doctors and other medicare workers

• Charges for surgical and medical appliances

• Room rent and ICU charges

• Daycare procedures and treatments

• Free annual check-ups

• Complimentary health screenings

• Emergency services

• Chronic disorders

• Maternity care

• Routine vaccination

• Neonatal care

• Mental health services

• Diagnostic tests  

Some of the important benefits you can enjoy if you purchase catastrophic health insurance are mentioned below. 

• Affordable alternative

A catastrophic health insurance act as a good alternative for expensive health insurance plans.

• Extensive coverage

These insurance plans provide extended coverage like emergency medical costs, high out-of-pocket medical expenses, routine check-ups, etc.

• Financial coverage for senior citizens

Senior citizens and elderly parents are covered under these insurance plans without having to pay higher additional premiums.

• High-insured sum and right deductibles

Depending on the base plan, one can get a higher insured sum covering all kinds of potential medical expenses and choose the right deductible amount.

Here are the eligibility criteria one should fulfil to purchase catastrophic health insurance.

• Age of the policyholder

Although the minimum and maximum age limit of most of the health insurance policies in India lie between 18 years and 70 years of age, catastrophic health insurance plans have a low maximum age limit of around 30 years. Catastrophic health insurance over 30 years of age is quite unpopular to find in India. Still, requirements indeed vary across different insurance providers and there are a few insurers who offer catastrophic health insurance over 50 years of age. 

• Pre-existing medical conditions

Generally, anyone above 45 years of age purchasing a health insurance policy must undergo medical tests to become eligible to buy the policy. While buying a catastrophic health insurance plan, one must disclose all pre-existing health complications and submit a declaration of good health.

Here are some tips for you to consider while choosing the right catastrophic health insurance plan.

1. Carefully read all the terms and conditions of the policy to understand what is covered under the insurance policy and what is excluded. 

2. Select the right deductible amount for your policy since it is the amount you have to pay from your pocket before the catastrophic health insurance plan takes effect. It will help avoid paying out-of-pocket. 

3. Try to buy the policy from the current insurer as they may waive off the waiting period for the pre-existing diseases. It will help long-time customers to get coverage immediately after the purchase of the top-up policy.

4. It is better to upgrade the existing plan to get more benefits since these catastrophic health insurance plans provide the same benefits as a base plan.

5. Calculate the health insurance premium costs to select a policy that facilitates the most savings.

You can claim a catastrophic health insurance policy in two ways - cashless claims and claim reimbursement. Check out the steps you need to follow in each case here.

• Cashless Claim Process

1. Inform the insurer or the  Third Party Administrator (TPA) about the hospitalisation as soon as you get admitted (in case of emergencies) or two-three days before it.

2. Choose a hospital that comes under the insurer’s cashless facility network.

3. Fill out the pre-authorisation form and all the necessary documents available at the hospital’s TPA counter after admission.

• Claim Reimbursement Process

1. Collect all your medical bills and prescriptions attested by the hospital.

2. Within a month of discharge from the hospital, fill out and submit the reimbursement form along with these documents to your insurer.

Below mentioned are some of the standard exclusions of catastrophic health insurance plans.

• Any expenses arising out of hospitalisation without a doctor’s recommendation.

• Pre-existing medical conditions till the end of a certain waiting period.

• Self-inflicted injuries or injuries due to suicide attempts.

• Overseas treatment expenses.

• Cosmetic or plastic surgeries except occurring due to accidents, burns, or cancer.

• Gender change treatments.

• Injuries arising out of adventure sports.

• Infertility treatments.

• Cost of dietary supplements and substances.

The following people shall refrain from buying a catastrophic health insurance policies:

1. Those who cannot afford to pay high out-of-pocket costs and expensive premiums.

2. People with existing health complications need to visit a doctor frequently.

3. Anyone looking for a health insurance policy to cover the costs of minor injuries or routine medical exams.
    

A catastrophic health insurance policy is ideal for covering medical expenses for serious illnesses and for the ones who cannot afford high premium payouts. It should be noted that these insurance policies have very high deductibles, and they will be activated only when the medical bills are too high.