Do You Have Enough Health Insurance for Retirement?

Most people fail to understand the importance of post-retirement health coverage. Young adults at the start of their career do not consider saving for the future. In such situations, thinking about health cover during the retirement years may be the least important.

 

Avoiding this mistake is of paramount importance. Irrespective of how healthy an individual is during his youth, over a period of time his health may deteriorate. Moreover, the fast-paced stressful life also affects the well-being of a person. Rising healthcare costs and inflation add further pressure in case of an illness.

 

An excellent way to ensure no financial distress occurs during a sickness is to opt for a health insurance plan. Here are four reasons why purchasing health cover at an early age is important

 

1.   Importance of health insurance  for retirement

Investing in the right comprehensive plan at the start of the career is of the utmost importance. Purchasing coverage at a younger age will mean that a person pays a lower premium. Moreover, the individual is able to acquire higher coverage, which becomes difficult as he becomes older. Insurance companies assume lower risks when a person is younger, which makes it easier for an individual to procure the best possible health plan.

 

2.   Increasing medical expenses and inflation

For a majority of the population, healthcare is becoming unaffordable because of the rising treatment costs. According to a national survey published by the National Sample Survey Organization (NSSO), the average hospitalization costs in urban cities increased from INR 8,851 in 2004 to INR 24,436 in 2014. The costs in rural areas went up from INR 5,695 to INR 14,935 during the same period. The increase in hospitalization costs was over 10% Compounded Annual Growth Rate (CAGR) during this time.

 

The following table shows the approximate costs of common medical procedures:

Procedure	Costs (INR)
Coronary Angiogram	16,000 – 63,500
One stent Angioplasty	1,90,000 – 4,12,000
Coronary Artery Bypass Graft (CABG)	1,90,000 – 6,00,000
Transurethral Resection of Prostate (TURF)	45,000 – 3,17,000
Appendectomy	76,000 – 1,78,000
Cholecystectomy	95,000 – 1,90,000
Cataract	50,000 – 1,25,000

 

Assuming, the healthcare costs to continue rising at 10% CAGR, the expenses for the above procedures would become phenomenal. To eliminate financial distress and combat the inflationary pressure, investing in a good health cover is crucial.

 

3.   Risk of critical illnesses and recent changes in lifestyle

Lifestyle-related medical conditions are on the rise. Incorrect eating habits, sedentary lifestyle, consumption of alcohol, smoking, and working in stressful environments are factors that increase the risks of ill-health. Almost 55% of the workforce suffers from sleeping disorders. A large number of people suffer from heart diseases, obesity, and diabetes. All these lifestyle changes increase the risk of critical illness, which is expensive to treat. Ensuring patients receive the best treatment requires money and this is best met by a comprehensive health plan that includes critical illnesses.

 

4.   Expensive surgeries and medications

As seen in the above table, the current expenses for common surgeries are already high. Furthermore, there is an increase in lifestyle-related disorders, which are also expensive to treat. The medical inflation rate is currently estimated at approximately 15% per annum, which is much higher than the inflation rate of roughly 6% to 7% since few years. The only affordable way to protect oneself against this disparity is to avail of a health cover.

Another important consideration is that even a comprehensive plan does not cover all medical expenses. Preventive drugs, voluntary procedures, and several other costs may not be covered. Ensuring a person is not caught offguard requires proper planning.Including senior citizen health insurance within the retirement plans will provide peace of mind during the golden years.