Month: January 2021

It is that time of the year again when all eyes are directed at the Union Budget which would be presented on 1st February 2020. As always, before the actual budget is delivered, industry experts make their assumptions on what possible changes are expected. This year is no different. With the last year largely overshadowed by the COVID-19 pandemic, the budget is expected to have considerable health reforms.

Health insurance has always been an important cover against the financial implications of a medical crisis. Many individuals have opted for the cover to protect their savings against expensive medical treatments. Moreover, over the last year, the pandemic highlighted the importance of having health insurance plans. With hospital bills amounting to lakhs in case of severe COVID cases, people woke up to the importance of a health insurance policy. Even the Insurance Regulatory and Development Authority of India (IRDAI) directed the launch of COVID specific health plans – Corona Kavach and Corona Rakshak – which found many takers. 

From the tax angle, health insurance plans allow deduction on the premiums paid under Section 80D. The deduction limit is INR 25, 000 on a policy covering self, spouse and dependent children. Senior citizens, aged 60 years and above, can enjoy a deduction limit of INR 50, 000. Moreover, for buying a policy for parents, you can claim an additional deduction of up to INR 50, 000.

Earlier, the additional deduction for parents was INR 25, 000 but in an earlier budget, the limit was increased to INR 50, 000. Experts believe that this year, as the importance of health insurance has increased, the Finance Minister can come out with enhanced deduction limits. It is expected that the limit of deduction for individuals below 60 years of age would also be enhanced to INR 50, 000 from the current limit of INR 25, 000. 

This limit enhancement would have two benefits –

• It would motivate buyers to opt for high coverage levels and opt for a comprehensive coverage
• It would drive the penetration of health insurance policies

Health insurance penetration in India is steadily increasing since 2015. From a 22% penetration in 2015, the number increased to 35.6% in 2018. (Source: Statista). However, the numbers are still not very impressive. For the penetration to cross the 50%-mark, aggressive reforms are needed, both by the health insurance segment as well as by the Government. While the health insurance segment is constantly reinventing itself, with better reforms in the 2020 budget, it is expected that the Government would also do its part.

What reforms would be proposed by the Government would be disclosed on 1st February 2020. Meanwhile, the outlook is positive about strong health reforms for the next financial year.

After almost a year of battling with the Coronavirus pandemic the vaccine for the illness has become a reality. Although the vaccine rollout program is still in its nascent stages, the road ahead is positive. Institutes and companies like Bharat Biotech, Pfizer and Serum Institute of India have already applied for the authorization to sell their vaccines in the market while the vaccine being developed by Zydus would be available by the end of the year 2021. Frontline warriors have already begun getting the vaccine shot and senior citizens have been registered for the same. What about the cost of such vaccination? Would it be covered under your health insurance policy?

If you are looking for a generic answer, the answer is ‘No’. The cost of vaccination forms a part of OPD expenses which are not covered by most health insurance policies, even COVID-specific health insurance plans. However, this is not the universal answer. In some cases the cost of the vaccination can be covered under the health insurance policy. Let’s find out how –

Case 1 – If vaccination is a part of inpatient hospitalization

If you are hospitalized for COVID and you get the vaccination shot as a part of treatment of the illness, the vaccination would be considered to be a part of your inpatient hospitalization treatment. In such cases, all health insurance plans would cover the cost of the vaccine.

Case 2 – If your policy has an OPD cover or you opted for one

Another situation in which the cost of the vaccine would be covered under your health insurance policy would be if you have OPD coverage in your health insurance plan. Though most health insurance plans do not allow coverage for OPD expenses, many policies have an inbuilt OPD coverage benefit. Moreover, many plans offer OPD coverage as an optional additional benefit. So, if your plan has OPD coverage as an inbuilt benefit or you have paid an additional premium to avail OPD coverage under the plan, the cost of vaccination would be covered.

However, under OPD coverage, here are a few points that you should remember –

• Plans with inbuilt OPD coverage might have higher premiums
• If you opt for OPD cover as an add-on, the premium would be increased
• OPD coverage is allowed up to a certain limit. If the cost of the vaccine is higher than the allowed coverage limit, you would incur out-of-pocket expenses

What should you do?

Check the coverage of your health insurance plan. If you are opting for elective vaccination and your plan does not have OPD coverage, you would have to bear the cost of the vaccine. Even if the plan has OPD coverage, check the coverage limit as you might incur additional costs on the vaccine. If, on the other hand, you are hospitalized for COVID and you get vaccinated, your health insurance plan would cover the cost of the vaccine. 

So, the coverage for the cost of the vaccine depends on your health insurance plan and when is the vaccine administered. Even if the cost is not covered in your health insurance policy, it would not be too considerable to be affordable. Getting vaccinated against the pandemic is important, even if you have to pay from your pockets, isn’t it?