About Latest Health Insurance Circular

HEALTH INSURANCE FOR BANK RETIREES-

SOME BASIC FACTS TO KNOW BEFORE YOU OPT-POST BY PREMRAJ CHEEKOTH-

SBT retiree
We already have got the table of renewal Premia released by IBA/United Insurance Company Ltd for the year 2018-19 for bank retirees.I reproduce it below:

Before jumping in to the whirlpool of options ( or not to jump in to the hot water ) let us make a cost benefit analysis from the retirees point of view also. There are actually 4 options as per table of premium ( options i to iv (a) and iv(b) for both Award Staff/Officer retirees. See the premium table below


I will come to need for banks giving subsidy to some extent later; all retirees including a sizable portion of family pensioners cannot afford these premium rates.

One thing is very clear.

AVOID the Domiciliary treatment options, ( options iv (a) and (b) in the table) the premium is prohibitively costly and does not justify the extra amount paid over the basic premium for getting domiciliary treatment options.

My suggestion is, Opt only for basic insurance coverage ( either Rs 4 Lakhs or the reduced Rs 3 lakhs basic cover) depending on which is affordable based on your income level. Before going for top-up option, consider the following factor:

Option (i) with Basic Insurance Cover of Rs 4 lakhs Premium is Rs 28732 which should take care of normal hospitalization needs of many retirees.

If you consider that you may need higher coverage up to Rs 9 lakhs, choose top- up for this at extra premium Rs 5049. So your Total premium outgo is Rs 33841 ( inclusive of GST).

This is by far the best option available to most retirees, provided they can afford it.

Remember, it covers retiree+ spouse up to Rs 9 lakhs coverage for each, towards hospitalization expenses. No Domiciliary treatment option available here.

Option (II) in the Table is for reduced basic cover of Rs 3 lakhs for officers. My advise is take this Basic Cover for 3 lakhs only if you think that Rs 3 lakhs coverage is sufficient for you at a Basic Premium Rs 27,745.

It is better to opt for 4 Lakhs basic coverage where the premium difference is only Rs 1047( i.e. for 4 lakhs basic cover, it is only Rs 28,792).

But never opt for option (ii) and (iii) together, that will be foolish decision.That means, NEVER go for top-up option if you choose basic coverage of 3 lakhs.

See the top-up plus basic premium for 3 lakhs reduced coverage, Rs 27,745+ top-up premium Rs 7574 ( Total Rs 35,319). You end up paying more than in option (i) for 4 lakhs+ top up and get lesser coverage under option (ii)+(III) . i.e. basic cover Rs 3 lakhs and top-up cover Rs 5 lakhs ( 8 lakhs) only.

Insurance company has different logic here. It is simple. Top-up coverage kicks up only after the basic limit is exhausted.

In option (i) Basic Limit is Rs 4 lakhs and top-up kicks up only if hospital expenses cross 4 lakhs in a year. So top-up premium is kept low under this option. But in option(ii+ iii) basic cover is 3 lakhs and top up is is same 5 laks. Total coverage is only 8 lakhs, however top-up liability kicks in after the hospital expenses cross the limit of 3 lakhs in a year. The probability of crossing the top-up line is more in option (ii +III) than in option 1, hence higher top-up premium of Rs 7574. That is why i suggest that retirees ( officers ) better choose only Option (i) either basic ( Premium Rs 28792) for basic cover of 4 lakhs only or Basic + top up ( Premium Rs. 33841) with total coverage up to 9 lakhs.

In either case, top-up cover portion is used by Insurance company only when the claim crosses the basic cover limit. So opt for top-up if it only necessary in your case.

Coming to options iv (a) and IV (b), premium with Domiciliary coverage, is very high. You pay Rs 74607 ( with 4 lakh basic cover) or Rs 72670 ( with 3 lakh basic cover) In both options iv ( a) and (b) you can claim a maximum of Rs 30,000 only in a year towards Domiciliary expenditure where as you pay more than this by way of premium. Just AVOID options iv (a) and (b) and choose only either option 1 either with or without Top-up or Option 2 ( only without top-up).

The best available one is Option 1 Basic cover 4 lakhs ( basic cover or with top- up) With basic only, you get 4 lakhs hospitalization and with top-up the cover gets extended to Rs 9 lakhs.


Option 2 and 3 are mere eye-wash and not worthwhile for reasons already explained by me above Options IV (a) and IV (b) with Domiciliary treatment should be AVOIDED at any cost.

You can keep the extra premium you pay for Domiciliary treatment option in your account and meet the domiciliary expenses out of your pocket instead of depending on the Insurance company .

Now, think of the affordability of the revised premium. How can a family pensioner who get a pension below Rs 10,000 can afford to shell out either Rs 28,792/ Rs 27745 for basic cover alone, not to think of the top-up option at all.

 It is nearly equivalent of three months of family pension amount. How the family pensioner survive with just 9 months pension ?

None of the Union leaders who negotiated the deal with IBA think of such stark realities when they agree for the 'reduced health insurance premium' for retirees.

 Moreover, in the case of family pensioner only single person is covered where as in retirees case both retiree and spouse gets coverage for the same amount of premium.

How to tide over these inequalities and injustice ?

The best way is for unions to fight for a subsidy from bank, for family pensioners should get minimum 50% subsidy on premium from the bank and those whose pension is lower than the yearly premium + GST should also get subsidy of 50%.

For retirees who had surrendered their Health Insurance policies with other companies after joining the IBA scheme three years ago, had no other option than renew their policy. Otherwise they will have to go without any insurance cover in the sunset years of their lives.

Health Insurance in India has become a lucrative business with many greedy players involved in it from top hospitals, insurance companies, pharmaceutical companies, medical equipment manufacturers and suppliers, and insurance brokers and service providers. Now India's public sector banks also are part of this coterie. How ordinary citizens can survive in this great whirlpool is a big question mark.

Premraj Cheekoth