A reader asks, “Would you please suggest how one can manage financially if one is not eligible for health insurance due to pre-existing diseases for younger folks? Medical expenses are an inevitability. How do we plan for that as best as we can?”
Most private health insurers today are unlikely to accept the risk of any applicant with fragile health or pre-existing conditions. Their goal is to build a health-insured pool to reduce claims. They offer “perks” for staying fit and cover annual health check-ups for the same reason.
Even if you already have some health insurance, the provider may not enhance your coverage if they find out about a pre-existing condition. Remember that these must be declared each time you enhance coverage, and the waiting periods will apply for the higher coverage as they did when you first got the policy.
Many insurance salesmen in a hurry to close the sale encourage applicants to hide pre-existing conditions. This will almost always surface the next time they get hospitalized, resulting in claim rejection. So never hide anything while applying for any kind of insurance.
So what are the available options for someone who cannot buy health insurance (or cannot increase their existing cover)?
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- Salaried employees are fortunate as group insurance covers handle pre-existing conditions often from day one of the coverage. This can be used as a safety blanket to build a robust medical expense corpus.
- Non-salaried employees can look for other forms of group health insurance. (A) From your bank; (B) From your Credit Card. These are based on fragile agreements between an insurer and your bank, but something is better than nothing.
- Those eligible for memberships in professional societies or cultural associations can get a group insurance policy. Please note that group insurance will only be offered to legitimate associations and not for any union created only to get the cover.
- Try to get a policy like LIC Jeevan Arogya Plan that offers daily cash benefits on hospitalization and surgical benefits.
- Get comprehensive accident insurance. See: How to buy a personal accident insurance policy.
- Find out how much you need to invest for your goals (long-term, short-term, recurring etc.). You can either set creating a corpus for medical expenses as a goal or try to invest a little extra for your retirement goal.
- Naturally, you should try to invest as much as possible – at least 2X the health insurance premium for a healthy person of your age each year. Reduce some expenses or alter your goals if necessary.
- Eat healthily and stay healthy. Get a master check-up done every six months or 12 months. Take remedial action as required.
- Develop friendly long-term relationships with your doctors. This can be crucial in keeping medical costs reasonable. Steps eight and nine and, to some extent, seven apply to everyone.
- The rest is up to providence and chaos.
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