Is ₹2 Lakh Health Insurance Enough?

Is ₹2 lakh health insurance enough in today’s day and age? Well, keeping in mind the rampant cost of living and the even faster moving health care inflation, ₹2 lakh insurance cover would most likely not cover the complete cost of emergency treatment for policyholders.

Let us further break down the rationale why ₹2 lakh health insurance coverage is no longer sustainable in 2023.

Rampant Medical Inflation

Medical inflation in India has been rampant over the course of the last few years. In fact, medical inflation is highest in India compared to all Asian nations. The medical inflation in India is at 14% as of 2022. This essentially means that the cost of medical treatments is increasing at 14%

This is much higher than the general inflation rate of 5.72%. This is one of the most important reasons for increasing your health insurance coverage.

Expensive Treatment for Critical Illnesses

The cost of critical illness treatments has continuously been increasing over the years and this is expected to continue. Critical illnesses include neurological, cardio-issues, cancer, and more. These issues have the potential to drain a person’s finances over the course of many months and even years.

It is absolutely imperative that a person has safeguards in place against the costs emanating from treating critical illnesses.

General Inflation is also increasing

The general inflation in India has been increasing from 3.3% in 2017 to 5.7% in 2022. It is now projected to go over 6%. As the general inflation in India increases, so does the cost of all goods and services, making everything more expensive, thereby decreasing the efficiency of health coverage.

Floater Plans should have higher coverage

A floater health insurance policy is a policy that covers all members of a family, thereby increasing the number of people covered under a single health insurance policy. A lot of people today are opting for a floater health insurance policy and it is gaining in popularity.

A person needs to be cognizant of the fact that he needs a sufficient coverage if he aims to adequately protect all his family members.

Outpatient Expenses

Outpatient expenses need to be factored in while buying an insurance policy. A health insurance policy with low coverage usually excludes outpatient expenses therefore it could be a prudent choice to ensure that you buy a health policy with outpatient coverage.
Different costs in different Geographical locations

It is possible that the policyholder may travel across the country. If he or she does so, it is extremely important for them to realize that different parts of India have different medical expenses. A village or a town will have lower medical expenses compared to tier 1 and tier 2 cities. Keep this in mind.

Pre and Post Hospitalization Expenses

People usually do not factor in the costs associated with pre and post hospitalization before selecting the coverage of their health plan. A policy buyer needs to ensure that his plan offers adequate pre and post hospitalization coverage.

These are some of the most important reasons why a policy buyer needs to ensure that his health insurance policy has sufficient coverage. A ₹2 Lakh coverage may be enough for certain small treatments like hernia treatment, cataract treatment, small planned treatments but it is more than likely that a ₹2 Lakh health cover will not be sufficient for emergency hospitalizations and critical treatments.