Knowing that difference is essential when it comes to keeping your health and financial preservation intact. Both these terms are used interchangeably but serve different purposes and provide different levels of cover. In this post, we’ll compare the health insurance vs medical insurance and discuss what each plan provides, cost related to them, and what you need to consider before selecting one of them.
What is Health Insurance?
Health insurance is a type of coverage that covers medical expenses with high benefits through financial protection for the insured. A standard health policy is typically broad which includes hospitalization, out patient care, maternity benefits, critical illnesses and even to cover the cost of the other alternative treatment like Ayurveda or homeopathy. When we designed health insurance plans, we made sure that it helps our policyholders have access to comprehensive healthcare at all times.
What is Medical Insurance?
Medical insurance or mediclaim policy as it is called in India, is a more focused form or coverage of health. Health Insurance is broader coverage, but medical insurance cover is limited to hospitalization expenses, such as operation, medicine cost, hospital bills. Not all hospitals are same; some may not cover Outpatient care or other Healthcare services other than the hospital. It is a vital source of revenue in funding hospitalization, with no provision for preventive care, outpatient visits or critical illness coverage.
Health Insurance Vs Medical Insurance – Key Differences
One of the easiest ways to understand the difference is that health insurance is different from medical insurance.Aspect Mediclaim Insurance for HealthHospitalization only Coverage limited to hospitalization expenses Comprehensive coverage of hospitalization, outpatient care and other.Generally low Generally high Generally premiumOPD Coverage May not be covered (not typically), may cover OPD expenses per the policyPaid Discounts Paid Oftentimes CoveredAlways not covered Usually covered (e.g., Ayurveda, Homeopathy, Naturopathy)Reimbursement based primarily Cashless and reimbursement optionsCan be ported to health insurance, Can port between health insurance policies.Benefits : basic hospitalization benefits; broader benefits, including preventive careWidely available Cashless Facility Limited availabilityExclusions Treatment specific to disease, treatment for cosmetic reasons, etc. Varied widely — treatment for cosmetic reasons, or treatment for disease, etc.insurance will help you make the right choice for your needs. Here’s a detailed comparison:
Aspect Mediclaim Health Insurance
Coverage Limited to hospitalization expenses Comprehensive coverage including hospitalization, outpatient care, and more
Premium Generally lower Generally higher
Outpatient (OPD) Coverage Not typically covered May cover OPD expenses depending on the policy
Maternity Expenses Not covered Often covered
Alternative Treatments Usually not covered Often covered (e.g., Ayurveda, Homeopathy, Naturopathy)
Claim Process Primarily reimbursement-based Cashless and reimbursement options
Policy Portability Can be ported to health insurance Can port between health insurance policies
Scope of Benefits Basic hospitalization benefits Broader benefits, including preventive care
Cashless Facility Limited availability Widely available
Exclusions Pre-existing conditions, specific treatments Varies widely, including pre-existing conditions, cosmetic treatments, etc.
Should you purchase a mediclaim policy or health insurance?
Health insurance and medical insurance are two different things and based on your healthcare needs, budget and level of coverage. Let’s break down when each type of policy is most beneficial:
When to Consider a Mediclaim Policy:
Lower Budget: For those on tight budget a mediclaim policy will give you basic coverage for hospitalization.
Specific Needs: Mediclaim can be a good option if you only need hospitalisation cover and don’t care about out- patient care or maternity benefits.
Short-Term Coverage: Mediclaim policies are generally annual and are perfect for anyone who is only looking for short term coverage.
When to Consider Health Insurance:
Comprehensive Coverage: If you need broader coverage such as outpatient care, critical illness, maternity expenses and alternative treatment, then the better one is health insurance.
Higher Sum Insured: If you are looking to cover a major illness and treatment in advance, then health insurance is the best scheme.
Long-Term Security: Lifelong renewability is the typical health policy that health insurance policies provide, ensuring you are protected from ever rising healthcare costs.
Customization: If you want to customize your plan with add ons or riders (e.g. for critical illnesses) health insurance policies offer this flexibility.
Things to Think Before you Buy the Mediclaim or Health Insurance Plan
Before purchasing either a mediclaim or health insurance plan, consider the following factors to ensure that you select the right policy for your needs:
Coverage and Benefits: Check what each policy covers, whether it’s hospitalization, outpatient care, maternity cover or alternative treatments.
Premium Costs: See if the plans you’re looking at have the same coverage you need budgeted without overextending and look up the premiums.
Sum Insured: To save money on the premium you choose, the sum insured needs to be enough to pay for your likely medical expenses, in particular for a serious illness or operation.
Network Hospitals: Check if the insurer has a top network of hospitals providing cashless advantages.
Claim Process: Know how the insurer processes their claim, and if they provide cashless treatment or you will have to pay them back.
Exclusions: Learn about any exclusions like pre existing conditions, cosmetic treatments or specific illnesses.
Waiting Periods: Be cognizant of waiting periods related to pre existing conditions, or other conditions that may make a policy ineffective.
Co-payment and Deductibles: Find out whether there are co payment clauses or deductibles you need to pay, before you receive treatment from the healthcare provider, under their policy.
Portability: See if the policy allows you to switch insurer whilst still retaining any benefits you have built up.
Customer Service: Check with which reputation the insurer has with its customers and also have a look at its own claim settlement ratio so that it is known that it won’t provide unreliable service.
Should you buy Health Insurance or Mediclaim?
It’s really just a question of which is more appropriate for your particular situation, whether health insurance or mediclaim. The more comprehensive option is health insurance because it covers more, if you require more comprehensive cover, such as covering maternity benefits, ambulance cover and other services helping with broader healthcare. But if your priority is to cover the expense of hospitalization and you are tight on the purse strings, a mediclaim policy may be the better bet.
Conclusion
There are health insurance and mediclaim, but both are good for money but serve different purposes. It covers more variety of benefits by way of outpatient care and critical illness coverage. Mediclaim policies on the other hand cover hospitalization expenses at a lower price.
In the end, your decision should be dependent on your needs for healthcare, budget, as well as amount of coverage you need; so it is a choice between going with health insurance and a mediclaim. Think carefully about your options and choose the policy which best fits your long term health and financial interests. Health insurance or mediclaim plan be whatever you want but both plans can help you be prepared for the unforeseen with the extreme coverage of what health insurance provides or with just pocket coverage if you go for mediclaim.
