Common Health Insurance Mistakes to Avoid

Getting health insurance is a great way to shelter your family and your finances. But a lot of people buy insurance just like they buy shoes.

They pick a plan in a hurry without really trying to understand the terms, or they simply buy what their friend has.

Making a wrong choice can lead to major stress during a medical emergency. You might find out too late that your policy will not pay for your hospital treatment. To make sure your savings stay safe, here are the most common health insurance mistakes to avoid.

1. Choosing a plan only by its price

The biggest mistake people make is looking only at the monthly or yearly price, which is called the premium. It is completely natural to want to save money, but the cheapest policy is rarely the best policy.

Cheap plans usually have hidden catches. For example, a low-cost plan might include a rule called "co-payment." This means that every time you get sick, you must pay a big percentage of the bill (like 10% or 20%) from your own savings, and the company pays the rest. A cheap plan might also have a very low total limit on how much money it will pay in a year. Always look at what the plan offers, not just what it costs.

2. Ignoring the hospital network list

Insurance companies have designated doctors, clinics, and hospitals with whom they run their business. The list of these medical service providers is known as a "network". When you visit a hospital from this network, insurance company directly settles the bills with the hospital. This type of treatment is known as cashless treatment and you can avoid a lot of stress in the event of an emergency.

However, if you by mistake, disregard this list, you may land up in a hospital which refuses to accept your insurance and you will have to pay the hospital charges completely with your own money at the first instance. Thereafter, you have to deal with a tons of paperwork to get your refunds. Therefore, always make sure that there are a number of network hospitals very near to you before making any decision.

3. Not checking the deductible amount

Deductible is the sum of money you have to spend on your own health care for which the insurance company will pay for nothing. For instance, if your insurance plan contains a deductible of ₹15, 000, and your total hospital bill amounts to ₹20, 000, you must pay the first ₹15, 000 from your own resources.

Usually, people purchase a plan without evaluating this amount. Later they get surprised when the hospital demands upfront payment from them. So, be sure that you are aware of your deductible amount so that you can afford it comfortably even in case of an unexpected situation.

4. Hiding your medical history

You will have to disclose your health status to the insurance company at the time of applying for the policy. Some people roll back to them out of fear that they would be charged a higher premium if they shared their health problems like diabetes, hypertension or asthma.

This is a terrible mistake. Insurance companies investigate your past medical records when you file a big claim. If they find out that you lied or hid an illness, they will immediately cancel your policy and refuse to pay a single rupee for your treatment. Be completely honest about your health history from day one.

5. Overlooking the exclusion list

It is impossible for a health policy to cover the entire spectrum of services. The healthcare services, drugs, and other items that the insurance company is unwilling to provide payment for are called exclusions.

Often, people are under the impression that if they end up in a hospital, all their expenses will be covered. But the truth is that even the standard health plans only partially pay for simple dental work, cosmetic surgery, and typical items like face masks and gloves that doctors use regularly. Without reading the exclusion list, you could really be in for a shock if the hospital gives you a bill for the items your insurance has declined to pay for.

6. Forgetting about room rent limits

Many health policies put a strict daily cap on how much they will pay for your hospital room. For instance, your plan might state that it will only pay up to ₹3,000 per day for a room.

If you get admitted and choose a private room that costs ₹6,000 per day, you will obviously have to pay the difference. But it gets worse. Because you chose a more expensive room, the hospital often increases the price of everything else, like surgeon fees and nursing charges. The insurance company will then reduce their payout for your entire bill, leaving you with a huge amount to pay by yourself. Try to find a plan that has no room rent limits.

Summary

By not committing these simple health insurance blunders, you'll be able to save yourself from an enormous financial headache down the road. It pays to be patient, learn the fundamentals of the policy, and look beyond only the cost. Keeping a close eye on deductibles, hospital networks, and exclusions will allow you to select a plan confidently that will be there for you when you need it most.