Health insurance is insurance against the risk of incurring medical expenses among individuals. By estimating the overall risk of health care and health system expenses, among a targeted group, an insurer can develop a routine finance structure, such as a monthly premium or payroll tax, to ensure that money is available to pay for the health care benefits specified in the insurance agreement.
While shortlisting a health insurance policy, we rarely take into account the impact of moving to a new city within the country. While we consider factors like age, health and gender, before purchasing a policy, we often tend to overlook the location and insurance portability factors. Remember, changing insurance policy can pose quite a challenge if not well-planned out.
So, what are the most significant changes that you ought to look out for, if you relocate to a new city?
Factors to Look Out Before Switching Health Insurance
1. Change in Health Insurance Premium Rate
The most important aspect that is likely to be impacted is the premium paid for the health cover. For some insurers, health insurance cover is determined on the basis of the zone in which each city falls. Cities have been broadly classified into three zones at present (Zone 1, 2 and 3) and while different insurers have their own specific way of classifying cities into each zone, Mumbai and Delhi fall under Zone 1, most Tier-I cities fall under Zone 2 and the rest of India falls under Zone 3. However, not all metro cities are classified as Zone 1. For example, in the case of Max Bupa Insurance, Delhi is considered to be a Zone 2 city, but for Star Health, it is a Zone 1 city.
If a person moves from a Tier-I city to a Tier II or Tier III city, most insurers provide a policy at a discounted price. If thereís no need of changing insurance policy, policyholders could enjoy the benefit of a refund as there is generally an endorsement provided. Depending on the policy, the individual neednít necessarily decide on switching health insurance as treatment can be availed on the same policy anywhere. The cost of hospitalisation is lower in smaller cities as opposed to metro cities. The chances of infectious lifestyle diseases too are lower in smaller cities as compared to metro cities.
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2. Restrictions in Coverage for Advanced Medical Treatment
In the case a policyholder moves from a lower zone and avails advanced treatment, some insurers restrict the coverage of the policy. The level of restriction tends to vary from policy to policy. Under such circumstances, a policyholder can avail of a co-payment clause, wherein a fixed percentage of the consultation fee, medical expenses and hospitalisation would have to be borne by them. Depending on the health insurance plan in question, this contribution by the policyholder can range from anything between 10-20%. If policyholders would rather not co-pay every time they require advanced treatment, they can instead opt to pay a higher premium. Generally, insurance portability is allowed at the renewal stage of the policy.
3. Access to Medical Facilities and Network of Hospitals
Another factor that comes into play is your choice of hospitals, depending on the network of hospitals provided to you by your health insurance plan. Network hospitals provide cashless facilities, with greater ease. Remember to keep a keen eye to check whether your preferred hospital features in the list or not. You might have to opt for a policy with a different insurer just in case your preferred hospital is not in the list.
The hassle of switching health insurance policy is negated if you opt for all-India coverage. However, given that the premium paid for such coverage is higher, policyholders can instead, select a zone-based cover, after considering factors such as age, duration of stay in the new city and health condition. If advanced treatment is required or the policyholder is a senior citizen, a pan-India cover would be a better option as it applies to all cities across the country, irrespective of the zone they fall under.