Arrest in cardiac-related claims

With young people prone to heart issues, insurance premiums are up

Here are a few heart-wrenching facts. Data from a recent report shows that there is a structural health shift. Younger individuals are more prone to advanced cardiac conditions, which forces them to pay higher insurance premiums, and results in stricter underwriting by the insurers, apart from higher out-of-pocket expenses. According to a survey by Plum, an employee insurance and health benefits firm, one in three applicants have witnessed the premiums rise by up to 50 per cent once the cardiac risk is detected, and one in five faces rejection in claims. Thus, the patients are squeezed at both ends.

Of course, the treatment costs for cardiac problems are sharply on the rise. About one-third of the cardiac claims exceed Rs 1.7 lakh, and the severe ones can dock the household budgets by more than Rs 5 lakh. In some complex situations, the expenses are an unimaginable Rs 20-28 lakh. Since nearly 60 per cent of the cardiac cases require surgery, late detection results in much-higher expenses. The survey findings reveal that this is indeed the case. Since heart disease develops silently over time, the early risk markers are usually missed in routine screenings.

As a result, patients reach the doctors at a later stage, when surgery often becomes a necessity. This forces the insurers to shift from age-based pricing of the premiums to health-based underwriting, which involve deeper biomarkers and tighter policy terms. Earlier, low premiums were the norm for the younger people. This is not true anymore. For the insured, this implies that the window for low-cost insurance is shrinking. Hence, it is imperative, even for the youngsters, to opt for higher coverage (Rs 10 lakh, and above), and early, complete health checks to avoid underinsurance, and financial risks.

When a heart disease strikes early in life, as it is more likely to do so given the number of deaths among those in their 40s, it complicates the access to health insurance. Insurers tend to classify such persons as high-risk, which leads to higher premiums, and stricter underwriting. This involves detailed medical evaluations such as stress tests, echocardiograms, and a review of past procedures like angioplasty or bypass surgery. Premiums can rise sharply, typically by 25 per cent to 100 per cent, which depends on the severity of the condition.

In addition, policies may come with waiting periods of 2-4 years for cardiac claims. Some insurers may impose co-payment clauses, sub-limits on procedures, or even permanent exclusions in severe cases. Despite these challenges, individuals with heart conditions can obtain standard health insurance policies, though not on the regular terms. Most policies will include restrictions mentioned above. In extreme cases, insurers may decline the coverage altogether or offer a reduced sum insured, which will invariably involve out-of-pocket expenses. This makes it crucial to secure insurance early, preferably before any diagnosis, when premiums are lower, and coverage is broader.

For those who are already diagnosed with cardiac problems, or face difficulty in obtaining regular and normal insurance, specialised policies can serve as a useful supplement. These heart-related policies are particularly relevant for individuals with a history of coronary artery disease, angioplasty, or bypass surgery. Such policies are of two types.

First, the indemnity-based plans that reimburse hospitalisation expenses. Second, the fixed-benefit or critical illness plans that provide a lump sum payout upon diagnosis or surgery. Both tend to cover major procedures such as angioplasty, bypass surgery, ICU hospitalisation, and limited pre- and post-hospitalisation expenses.

However, they come with exclusions, which include waiting periods for the pre-existing conditions, and limited coverage for the non-cardiac complications or long-term medication. Hence, one cannot rely solely on these special policies. At best, they can be used as add-ons rather than a replacement for a normal, comprehensive health insurance. As mentioned earlier, one of the biggest problems with cardiac-focused insurance is the cost.

Premiums for those with heart conditions are invariably higher than the standard policies. In addition, thanks to co-pay clauses, sub-limits, and non-payable items in the policies and claims, out-of-pocket expenses are expected to increase.

Even policies that seem affordable initially may include hidden restrictions such as caps on specific treatments or limits on room rent, which can significantly reduce the claim payouts. Several patients face this issue at the time of the claims, as they fail to read the fine print, or are unaware of the restrictions. In many cases, despite a high coverage, and hiked premiums, the claim payouts may be as low as 50-60 per cent. Thus, what may seem to be a high coverage may turn out to be inadequate, which leaves the policyholders financially exposed.

Choosing the right policy is crucial, and requires a careful evaluation of several factors. For example, as stated above, the sum insured should be sufficient to cover high treatment costs, especially if one prefers tertiary care hospitals, and surgery by senior and reputed heart specialists, and want adequate coverage despite the low claim payouts. The sum insured cannot be correlated with objective factors like the cost of surgery, but needs to be collated with the possibility of higher-than-estimated costs, coupled with lower payouts by the insurers. Room rent limits are a critical aspect, as they influence the claim amount.

Buyers should review the waiting periods for the pre-existing conditions, co-payment clauses, and sub-limits on procedures like angioplasty or bypass surgery. Policies that offer regular annual health check-ups, and wellness benefits are useful for early detection and ongoing management.

For those with existing conditions, full and honest disclosure of the medical history is essential at the time of the purchase of a policy. Any non-disclosure can lead to a rejection of the claim later, and defeat the purpose of insurance. The maintenance of proper medical records, adherence to prescribed treatments, and opting for higher coverage can provide better financial protection.

Heart disease is no longer a late-life concern, and it does not merely inflict those who are 50 years and above. Younger people, in their mid-thirties and forties are facing these problems. It is becoming a financial risk for the youngsters. This shift underscores the importance of planning ahead.

A combination of a comprehensive base policy, coupled with a specialised cover offers better protection. At the same time, one needs to understand that insurance cover is not enough. Preventive measures, regular screenings, and lifestyles are equally important. In a landscape where risks are rising, and costs escalating, informed choices remain the most effective tools to safeguard health and finances.