Question: What factors affect how much I pay for my medical insurance cover and is it possible to be comprehensively covered under medical insurance?
Medical insurance is a deeply personal matter that can evoke strong emotions, as most buyers are always eager to understand the full extent of coverage provided.
This is especially true for those seeking comprehensive coverage, as they require the peace of mind that their medical needs and expenses will be taken care of during hospitalisation.
However, before committing to a medical insurance policy, consider the below factors that can impact the premiums you will be charged.
Financial capability
In most cases, when you pitch to clients, the frequently asked question is, “What are some of the affordable medical cover solutions you offer?”.
This implies that the majority of clients are looking for a solution that is within their budget. In the long run, your financial ability will determine the amount you can reasonably afford to pay for medical cover, which ultimately determines the level of cover you get.
Benefits covered and limits
The amount you will pay will depend on what you are looking for, whether a basic cover with inpatient coverage only, or a comprehensive one that extends to inpatient, outpatient, dental, optical and maternity benefits, among others.
Various sub-limits also exist within the major benefits, such as pre-existing and chronic sub-limits within the inpatient benefit or cover for checkups and vaccines within the outpatient benefit.
Additionally, if the limits of your medical insurance coverage are high, then you will have to pay more premiums.
The benefits’ waiting periods of medical cover is also a key consideration when paying your medical insurance since it gives you an informed decision on when you will start enjoying the benefits.
A medical cover that is flexible in terms of free selection of benefits and limits is geared towards attracting clients, hence this might influence you to purchase it, even if it is costly.
Most of the individual medical solutions in Kenya are structured in a standard way, thereby limiting applicants from selecting different limits across the benefit level options.
For some covers for example, for an inpatient limit of Sh500,000, you can only purchase a maximum of Sh50,000 for outpatient benefits.
Flexibility also comes with the various payment plans offered by your insurer, or intermediary. Cash and carry medical insurance products require upfront payments whereas other products offer instalment plans.
Additionally, you may also use Insurance premium financing (IPF) via a bank, at a minimum interest rate of four percent which increases the total cost of the cover.
Provider restrictions
The premiums of medical insurance cover that have co-payments are cheaper than those without co-payments.
By analysing the number of outpatient visits anticipated per year, you will decide on whether to pay for a co-payment option or no co-payment option.
The openness of the panel of providers for your medical cover will determine how much you will spend on that cover.
If access to top-tier providers is limited, the cost of premiums will likely be lower compared to covers that have no limitation or restriction on the providers you can visit when you need healthcare services.
The medical facilities in your cover might be located only within a specific region, hence forcing you to pay cash whenever you fall ill while outside those areas.
International medical covers tend to be more expensive compared to local covers since they have minimum restrictions on the provider network, and you can access care on credit across the world or in certain geographical areas.
Previous experience and medical inflation
If you are an existing client, your previous and current claims experience influences whether you will dip into your pocket to pay more for a medical cover because of adverse performance or get no claims discounts due to good performance.
Inflationary premium loadings are also implemented periodically due to the rising cost of care, which has a direct impact on the premiums you will ultimately pay.
You are at liberty to evaluate if the service you are receiving is worth the value of the money you pay for the medical insurance cover.
Mr Osiga is a retail insurance consultant at Zamara. | [email protected]
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