Name: Ananya Dutta

University roll no.: 23409320013

Q. Discuss the role of Insurance in Healthcare. Why it becomes necessary for everybody
to get covered with some kind of Health protection plan?
A.

Health insurance is a type of insurance that covers medical expenses that arise due to an illness. These
expenses could be related to hospitalisation costs, cost of medicines or doctor consultation fees.

In our everyday busy schedule, no one plans to fall ill or get hurt, but a serious illness can strike anyone
at any time. The cost of treating the illness can cause severe financial strain on the savings you have
accumulated over time. This means that we might have to compromise on providing our child the best quality
education or defaulting on our home loan payments. Today, the cost of medical treatment is continuously
rising.

For e.g., Herceptin, a cancer medicine costs approximately 1,10,000 for a vial of 440 mg. Depending
on the weight, a patient usually requires 17-19 bottles for treatment over a year. That's 18 - 20 lakh just for
the medicine. Then add hospitalisation costs, doctor consultation fees, chemotherapy costs, etc. and our overall
expenses could exceed 25 lakhs. These costs which are already very high are increasing every year. Most
smart people have taken necessary precautions to insure their health as soon as possible. Health insurance is
a living benefit, where we would need monies at the time of dire need. One disease can drain out all the savings
we have made for your children's education, marriage, for buying a house or even retirement. We would not
want our family's dreams to get shattered just because of an illness, especially when we could have protected
ourself financially. It is beneficial to take a health insurance policy when we are young and healthy. As we
get older, not only does our premium increase, but we also stand a chance of being denied a health cover by
the insurance company.

Some roles of Health Insurance are as followed –

➢ Many insurance providers offer cashless claim facility. In such an arrangement, we do not have to
make any out-of-pocket payments. The hospitalization expenses are settled between our insurer and
the hospital. To avail of this benefit, it is imperative to get admitted at any of the insurer’s network
hospitals. We may fill out a pre-authorization form and display your health insurance card to enjoy the
cashless facility.
➢ The main purpose of medical insurance is to receive the best medical care without any strain on our
finances. Health insurance plans offer protection against high medical costs. It covers hospitalization
expenses, day care procedures, domiciliary expenses, and ambulance charges, besides many others.
We may, therefore, focus on our speedy recovery instead of worrying about such high costs.
➢ Insurance providers nowadays offer critical illness insurance, either as a standalone plan or as a rider.
Such an insurance policy provides coverage against life-threatening diseases such as kidney failure,
bone marrow transplant, stroke, and loss of limbs, among others. Upon diagnosis of any of the critical
illness from the predetermined list of our policy, we are entitled to receive a lump sum amount. This
amount may be used to meet our illness-related treatment costs, daily expenses, and any other financial
obligations.
➢ Health care plans provide tax benefits. Premiums paid towards our health care policy are eligible for
tax deductions under Section 80D of the Income Tax Act, 1961. In case of the individual, Rs. 25,000
for myself and my family. If individual or spouse is 60 years old or more the deduction available is Rs
50,000.
➢ This is the bonus element which is paid to the insured if the insured does not file a claim for any
treatment in the previous year.