Healthcare is a vital necessity in the current era. The days when health insurance was viewed as a luxury are long gone. Instead, it is now considered imperative. The skyrocketing expenses of healthcare due to increasing medical inflation complicate the ability to cover medical treatments using personal savings. During such instances, a health insurance policy, often referred to as medical insurance, proves beneficial in protecting your finances while ensuring access to quality and standardized treatment options. The rising costs of treatment present significant challenges for low and middle-income groups, and medical insurance serves as a means to secure financial protection during these urgent medical circumstances. According to the October 2021 report from NITI Aayog titled ‘Health Insurance for India’s Missing Middle’, statistics indicate that almost 30% of India’s population lacks health insurance coverage. These figures may be higher due to the gaps and overlaps within the current government schemes.

Why the Middle Class Must Have Health Insurance

Health insurance is critical for everyone, yet it holds particular importance for the middle class. With increasing medical expenses, an unpredictable healthcare landscape, and a limited safety net, possessing health insurance is no longer a luxury—it is a requirement. Here are the reasons why the middle class should prioritize health insurance:

1. Rising Medical Costs: Healthcare costs are increasing at a worrisome pace. From regular checkups to major surgeries, medical expenses are soaring. Without health insurance, even one hospitalization can deplete your savings or push you into debt.
2. Financial Protection Against Unforeseen Health Crises: Sudden illnesses and accidents can occur unexpectedly, resulting in unforeseen medical costs. These emergencies can be financially wrecking, particularly for middle-class families who may lack considerable savings to rely on.
3. Access to Better Healthcare: Having health insurance allows you to choose from a broader range of hospitals and healthcare providers. This access grants you better medical care and ensures that you receive timely and efficient treatments without unnecessary delays.
4. Preventive Care and Early Diagnosis: Numerous health insurance plans include coverage for regular checkups and preventive care. This allows you to identify health issues early on, before they escalate into severe conditions that may necessitate expensive treatment.
5. Support for Family Well-Being: For middle-class households, health insurance represents more than just individual security—it is about ensuring the health of the whole family. Whether it’s your spouse, children, or elderly parents, comprehensive coverage guarantees that everyone receives the medical attention they require.
6. Protection Against Critical Illnesses: Severe conditions such as cancer, heart disease, and kidney issues frequently demand costly treatments that most middle-class families find unaffordable. Health insurance that includes critical illness coverage offers the financial support needed to manage these life-threatening situations.
7. Tax Benefits: Acquiring health insurance not only safeguards your finances but also provides tax advantages under Section 80D of the Income Tax Act. This contributes to lowering your overall taxable income, resulting in additional savings.
8. Peace of Mind: Perhaps the most crucial advantage of health insurance is the assurance it provides. Being aware that you and your family are safeguarded against unexpected medical costs enables you to concentrate on your work, family, and other objectives without the ongoing concern of financial burden from health issues.

Benefits of Health Insurance for Middle-Class Families

Let’s explore how low and middle-income groups can benefit from the health insurance plans that are accessible:

1. Support for Battling Rising Medical Inflation: The available medical inflation statistics show that the average increase in medical expenses ranges from 12% to 14% annually in India. With these rising inflation rates, it becomes progressively challenging to save money in line with the increase in medical treatment prices.
2. Safeguarding Your Hard-Earned Savings: Serious health conditions, be it a day-care procedure or a major surgery, necessitate spending thousands of rupees. For a serious medical condition, this expense could even soar into lakhs. Therefore, a health insurance policy helps protect your finances by covering the treatment costs.
3. Access to Quality Healthcare Services: Quality medical care is vital to ensure that the health issue receives appropriate attention. For middle and low-income groups, restricted financial resources may hinder their capacity to pursue standardized quality healthcare services.
4. Coverage for Hospitalization Expenses: Health insurance plans for individuals or families both offer coverage for various treatment facilities. Hospitalization costs, which significantly contribute to treatment expenses, are included in most health insurance plans unless explicitly stated otherwise.
5. Pre-Hospitalization and Post-Hospitalization Coverage: It’s not solely about when treatment expenses cease following discharge from the medical facility. Numerous ailments necessitate regular testing both before and after the treatment. A policy that includes these pre-hospitalization and post-hospitalization expenses provides comprehensive coverage, alleviating the policyholder’s concerns about costs (such as diagnostic tests, investigative procedures, medications, and more) before and after the main treatment.
6. Provision for Cashless Treatment: Another advantage, particularly for low-income groups, is the cashless treatment option provided in health insurance policies. With this feature, you can receive treatment without needing to pay the entire expense upfront.
7. Coverage for the Whole Family Under One Policy: Low and middle-income families frequently find themselves in a financial situation that prevents them from affording individual policies for each family member. Instead, family floater policies offer a single insurance coverage that encompasses all members simultaneously.
8. Ability to Enhance Coverage Through Add-Ons: In addition to the benefits mentioned, health insurance policies can also be tailored using add-ons to suit an individual or their family’s needs. Thus, add-ons represent optional coverage that expands the overall scope of the policy.
9. Obtain Tax Benefits: Finally, health insurance policies not only provide financial protection but also confer tax advantages. Section 80D of the Income Tax Act permits a deduction from the gross total income, aiding in reducing the overall net total income that is subject to taxation.