How much health insurance is adequate?
How much health insurance is adequate is a question that is very difficult to answer. It actually depends on the health status of every individual and it also depends on the living conditions and income of the individual, the dependency of family members on the individual and various other factors. Even so, I have tried to explain how much health insurance is adequate for a family and individual.
Health insurance coverage in Washington state
In Washington State too, those children who are not covered by insurance have been studied to have inadequate treatment than those who are insured. This is especially true for children with special health needs. There could be a delay in healthcare and the health needs are not completely met. On the other hand, when adequate insurance coverage is present, the following are true:
1. There is less delay in health care provision.
2. Almost all health needs are met.
3. Comprehensive health care is provided. These include medical and dental health care, community services and mental health services.
2016 National Health Interview Survey Data
In spite of the growing awareness and knowledge about health insurance, there are millions of people around the world who do not have health insurance coverage. The National Center for Health Statistics released on the website of Centers for Disease Control and Prevention has the following statistics. It says that 28.2 million people under 65 years are not covered by health insurance. This works out to be about 10.4% of the population. Of the population that is insured, 65% of population is covered by private insurance. 26.3% of the population is covered by public insurance. This is based on the 2016 National Health Interview Survey.
Factors that decide how much health insurance is adequate for you:
1. Age:
If you are older, you may be susceptible to a plethora of diseases that you have to insure against. So, if you are older, it will mean that you need a higher and better coverage.
2. Affordability:
As you become older, the health insurance premium will also increase. As you become older, your salary is also likely to increase, but may not be true always. So, your income decides how much health insurance you can afford to have.
3. Prevailing health status:
Your prevailing health status is a very important factor that will help decide on the amount of money that you should pay for health insurance cover. If you are already sick, you will need to pay more as premium. So, you should ensure that you have a high cover, to cover for the existing illness.
4. Genetic and family history:
Genetic and family history of diseases will also play a role on the amount of money you have to spend on a health insurance. If you have parents who have lived with diabetes or heart diseases, chances are that you may also be susceptible to these diseases, if you are not careful with your lifestyle. so, make sure that you have adequate cover to overcome treatment for these diseases. So, your health insurance may cost more if you are genetically susceptible to diseases.
5. Where you live:
The place where you live also matters because health care costs in cities are much higher than smaller cities. also, it can be said that larger cities have better healthcare facilities than smaller towns. If you live in a city, you may have to shell out more to the hospitals for any treatments. So, it is better to have higher health insurance coverage and seek such policies by spending more money.
Minimum Basic health insurance cover needed
The minimum cover that any small family of 2 adults and 2 children will have to have is about 10 lakhs. This is the bare minimum when the adults are in their 30’s. Other than this amount,t here should also be top up policies that add value to your health insurance and add cover to specific ailments.
Increase health insurance cover as you grow older
As you grow older, the 5 lakh cover should be increased and more top up policies should be added to cover for other diseases like cancer, diabetes, heart diseases and others. These are common lifestyle diseases that occur in the middle aged people and you should be able to get adequate cover for these diseases.
Health insurance for maternity benefits
Maternity expenses can be quite high. You will never know for sure how much health insurance is adequate for maternity cover. The usual cost of a delivery in a good hospital can be about 60,000 to about 1 lakh. The cost could shoot up if you are undergoing a C-section. Also, if here are any post natal complications in the child or post delivery complications in the mother, the cost could rise exponentially. So, you will need to obtain a cover of about 10 lakh.
Additional Health cover for parents
If you are working and your parents are dependent on you, then you will need a very high cover. Still, you may be wondering how much health insurance is adequate to cover you and your family including your parents. This is because older people are susceptible to more diseases and may also have to undergo various preventive health checks. When this is the case, you will need to add a family floater policy or other add on policies from your health insurer. There are several family policies that cover the couple, their children and aged parents.
What if employer gives a health insurance?
Many companies and employers offer health insurance to their employees. these group health insurance schemes are very beneficial since they are charged a lower premium. Even if you have to pay for these insurance covers, they are much better. When you are covered by your employers schemes, you should also have additional cover for your family members as an add on policy.
How to save money on health insurance cover
Health insurance cover can be quite expensive. There is a simple method of mitigating this high expense. All you need to do is to take a health insurance policy with a cover for about 3 lakhs. Once this is done, you can add top up covers for specific diseases and conditions. this will work out cheaper for families. If you take a huge cover upfront, then the money that you would have to pay as health insurance premium will be way too much for a common man to afford.
Have enough cover to adjust for inflation
The normal inflation is about 4% to 7%, but the medical inflation can be upward of 10%. At times, cost of treatment could be inflated at about 15 % annually. This is the reason for the huge increase in health insurance premiums each year. So, make sure that you are covered adequately by increasing your cover to adjust for health cost inflation.
Read the fine print between the lines
Even before you think of how much health insurance is adequate, there is another important factor that every policy holder has to understand. This is about the fine print of the health insurance schemes. Health insurance schemes will be a major expense for you and at the end of this high premium paid, you would not want the company to reject your claim because you were not covered for a particular illness. this is a common problem that many people do not understand what the health insurance scheme covers and simply buy it. You should fully understand all about the health insurance scheme and what it covers. You should read the fine print and also ask enough questions to the health insurance provider.
Portability of your insurance policy
You should also ensure if the company follows the IRDA guidelines for the portability of health insurance policy. Portability of your insurance policy will benefit you under certain circumstances. You can also ensure that your insurance continuity is available with a new insurance company. If you would like to know more about portability of your health insurance, please wait for a separate article on this topic.
Having adequate health insurance will allow families to take care of the sick. The families will be able to access healthcare comprehensively. It will also help in preventive health by being able to obtain annual physical health checks. Adequate health insurance will also help the family members of the sick to have peace of mind. A deductible of about $5000 to $10000 is considered normal in the US today. Though every individual and family need to have adequate health insurance cover, it is much more important for those with special healthcare needs. A study on the Children and Youth with Special Healthcare Needs (CYSHCN) in Nebraska showed that these people are only 15% of total population. But, they require about 33.6% of the healthcare resources.
