Mediclaim or Health Insurance: Which One Should You Choose?

Meet Rohan, a 32-year-old hard-working professional. He was recently diagnosed with cancer and was relieved that his mediclaim would cover all. Unfortunately, he soon found out that this only covered his actual time in the hospital. He had to spend lakhs of rupees out of his own pocket for his first diagnostic tests, chemotherapy and subsequent follow-up treatments. Unfortunately, Rohan’s story is not unique. Almost 70% of Indians reportedly pay for their health care entirely out of pocket. It is important to know the difference between mediclaim and comprehensive health insurance. This article provides a comprehensive breakdown of all the essential details. 

What is Mediclaim? 

Mediclaim is an affordable insurance choice that offers both financial stability and health protection. However, it has some drawbacks, such as only covering hospitalisation costs associated with surgery, accidents, or illnesses. It is primarily designed to reimburse your medical expenses up to the sum insured limit, either through claims or reimbursements at network hospitals.

Your basic plan coverage consists of the following:

• Drugs administered during your admission
• Doctor and nursing fees
• Hospitalisation 
• OT and surgical costs

Avoid confusing health insurance with Mediclaim. A basic mediclaim policy, in comparison to a health insurance policy, will not cover maternity expenses, critical illness treatments, or any medical bills incurred before or after hospitalisation. 

What is Health Insurance?

Health insurance is more inclusive and more manageable than a mediclaim policy, and it fully covers your expenses. It covers a wide range of expenses beyond hospital stays, such as medical costs and diagnostic testing. In this case, you either pay the costs out of pocket and the insurance company reimburses you later, or the hospital makes a cashless claim and contacts the insurance provider directly. 

Your comprehensive health plan includes:

• Hospitalisation
• Maternity expenses
• charges before and after hospital admission
• Cancer, heart disease, kidney failure and other serious health issues
• Other benefits like OPD

The main advantage of health insurance over a mediclaim policy is that health insurance provides a significantly higher payout, serving as a genuine financial safety net in the event of serious health issues. 

Key Distinctions Between Mediclaim and Health Insurance

It is important to know how they differ before you choose a plan. Let's use the table below to compare it:

Top Factors to Consider Before Buying Your Next Health Plan 

The right policy can make all the difference when you need it most. Here’s a quick checklist you can use to compare before choosing your health policy.

• Sum Assured: Think carefully about the total cover amount. This cap is fixed and cannot be changed until your policy is renewed next year.
• Co-pay: This means the exact percentage of the medical bill (10% or 20%, etc.) that you agree to pay yourself, and the insurance company will cover the rest.
• Same-day Procedures: Many modern surgeries, like cataract procedures, are now done without an overnight hospital stay. Make sure your plan covers these “daycare” treatments, so you don’t end up paying for procedures that last less than 24 hours.
• Pre- and Post-hospitalisation Support: Medical expenses frequently begin with diagnostic tests prior to admission and continue with follow-up care after discharge. Make sure your policy covers these additional costs, as they can quickly add up.
• Verify the Claim Settlement Track Record: A ratio above 85% over the last 3–4 years signals a trustworthy insurer. 
• No-Claim Bonus Rewards: Many insurers reward you for not filing a claim during the year by increasing your total coverage by up to 50%, often at no extra cost to your premium. 
• Nationwide Flexibility: Select a policy that protects you anywhere in the nation. This means you have access to quality healthcare whether you are at home or not. 
• Protection Against Hidden Fees: Hospital bills are not just for the doctor’s fee. Make sure your plan includes “consumables” like masks, gloves and syringes and specific limits on room rent. 
• Budget: Always think about the budget and affordability while buying an insurance policy. Health insurance is a little more expensive than mediclaim insurance, as it provides better coverage.
• Duration of policy: Consider how long you need protection. Basic plans are often suitable for temporary, short-term needs, whereas comprehensive health insurance is designed for lifelong security and family protection. 

Should You Choose Mediclaim or Health Insurance? 

Ultimately, the decision between the two is a personal one that depends largely on your age, health, and financial situation.

When is Medicliam a Better Choice?

If you are looking for a low-cost option that only covers hospitalisation, then a mediclaim policy is considered to be a good choice. This covers the typical hospital expenses, like room rent and operating charges. It is generally good for younger, healthy people who want an emergency backup plan and do not expect to need much in the way of medical treatments.

Mediclaim also has lower premiums as compared to health insurance policies, which also provide basic financial stability without emptying your pocket.

When Is It Best to Have Health Insurance?

• You want coverage that includes pre- and post-hospitalisation costs, critical illnesses, and maternity expenses, in addition to hospital stays.
• Your coverage should be adaptable to your changing needs and financial situation.
• You are looking for a higher sum assured of ₹5 lakh to ₹6 crore annually.
• You want to be protected against serious conditions such as cancer, stroke, and over 30 other critical illnesses.
• When you want coverage options such as personal accident, maternity, and critical illness protection.

Misconceptions

There are numerous myths about health insurance and mediclaim that can lead people to make uninformed decisions.

• Mediclaim and health insurance are similar.

Mediclaim includes only hospitalisation coverage, and health insurance usually covers charges like pre- and post-hospitalisation, critical illnesses and daycare procedures.

• Mediclaim is better as it is less expensive

Mediclaim helps you to reduce the premium payable by you. Health insurance can be expensive, but it covers a lot of health care needs and provides financial protection.

• An employer health plan is not enough 

Employer-provided health insurance is typically basic, has a fixed limit, and expires the moment you change jobs. A personal health insurance plan provides broader coverage that remains with you regardless of where you work.  

Conclusion 

You ultimately know what's best for you. For the young people who need only the basic coverage, Mediclaim is good enough. But health insurance is the better choice if you want real peace of mind for you and your family. Medical bills can be shocking, and you don’t want to be financially strapped in a health emergency. Niva Bupa offers a variety of health insurance plans to suit varying requirements and budgets, so you can select the right cover for yourself.    

Frequently Asked Questions

Q1. Health insurance or mediclaim – which is better?

It depends on your needs. Mediclaim is a cheap, basic safety net for sudden hospital stays, perfect if you're young and healthy, whereas comprehensive health insurance is a better long-term investment to cover critical illnesses and family expenses.

Q2. Is it possible to obtain a mediclaim policy for my entire family?

A family floater plan can help you buy the policy for your entire family. Remember, the full claim limit is shared among all of you and is only for actual hospital stays. 

Q3. Can I upgrade mediclaim to complete health insurance?

Yes, you can switch easily. Most insurance companies allow you to upgrade or migrate your plan at the time of renewal so that you can get broader benefits and higher coverage as your health needs change. 

Q4. Is it possible to have both a Mediclaim policy and health insurance?

Yes, you can own both simultaneously. In case of a medical emergency, you can file a claim under either policy or use both of them to cover larger hospital bills if one policy reaches its limit.