Increase in Medicare Costs in India

As if rising inflation in food articles and other household items is not bad enough, Indians have to deal with inflation in another important area – medicare or medical costs.

In fact, inflation in medicare is higher than inflation in food and other articles or regular inflation as it’s called. While regular inflation is in single digits, cost of medicare exceeds double digits.

The reason is obvious – food and other household items are generic products, while medicare is a specific and specialized service.

Surveys have shown that demand for medicare in India is growing at over 25%. Costs of hospitalization and surgery are spiralling. In part this has to do with the fact that hospitals know or anticipate that the patient has taken mediclaim or health insurance, so the cost of hospitalization and surgery is hiked accordingly.

Heart-stopping expenses

Let’s take cardiovascular ailments which are particularly common in India being, as it is, the heart disease capital of the world.

Treating a heart ailment, especially if it involves surgery, can be expensive. That is, if you are looking for high quality surgery, since you do not want to cut corners over here.

The actual cost of the surgery is depends on factors like severity of the heart condition, nature of surgery, type of hospitalization, surgeon’s experience and expertise.

Today, cost of a heart surgery in India could vary in the region of Rs 1.5 lakhs to Rs 3 lakhs. Five years later it could be a lot more expensive.

The illustration below highlights how cost of heart surgery can be expected to rise over the years.

Rising cost of medical emergencies

(Cost of heart surgery and rise in costs are estimates and do not represent actual values.)

Cost of heart surgery today Rs 200,000
Annual rise in medical cost % 10%
Future value of heart surgery after 5 years* Rs 322,102
Future value of heart surgery after 10 years* Rs 518,748
Future value of heart surgery after 15 years* Rs 835,450

As is evident from the illustration after 5 years the Rs 2 lakh heart surgery will cost over Rs 3.22 lakhs. After 10 years it will be Rs 5.19 and Rs 8.35 lakhs after 15 years.

If the individual hasn’t saved that much money, he would be forced to dip into his savings and investments or worse borrow money.

One way to provide for medical emergencies is by taking a health plan from an insurance company. Medical Insurance offer a lot of flexibility both in terms of coverage and disbursal. For instance, certain health plans cover as many as 30 critical illnesses and over 80 surgical procedures. Payment towards illness/surgery is disbursed regardless of actual medical expenses. The policy continues even after the benefit payment on selected illnesses.

With health plans, individuals are assured of a more secure future both health-wise and money-wise. This makes family floater health insurance critical for individuals, especially if they are responsible for the financial well-being of the family.

What else would you like to know?

*premium Amount for Male, 35 yrs, 10 year term, Silver option, including tax.
HDFC Standard Life Insurance Company Limited.

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