Mediclaim vs Health Insurance: What are the differences and how to choose right plan

The terms health insurance and Mediclaim are often used interchangeably, but while Mediclaim is limited to hospitalisation expenses, health insurance has a much deeper coverage that goes with it. For instance, health insurance covers can include annual health check-ups, daily hospital cash, OPD expenses, and alternative treatments AYUSH, among others. So, it can be said that Mediclaim is the basic version of a health insurance. 

What is Mediclaim? 

Mediclaim is a health insurance policy that provides you with the required financial protection in times of medical emergency. It takes care of expenses when you are hospitalised after an accident, sudden illness, or surgery during the policy tenure. Generally, there are two types of Mediclaim: cashless and reimbursement type. One can benefit from cashless Mediclaim at select hospitals, which have tie-ups with the insurance provider.   Cashless Mediclaim allows policy holder to avail emergency medical treatment without worrying about the expenses as the medical bills are settled directly settled by the insurer within the assured limits under cashless claims. This does not involve any lengthy paperwork or documentation and therefore helps in seamless claims.  In other cases, the insurance company reimburses the expenses incurred after the medical expenses have been claimed.  

What is Health Insurance? 

Health insurance is a form of medical insurance cover that provides you with complete coverage for medical and surgical expenses in case of emergencies. For instance, an insurer can opt for a critical illness cover that will provide coverage for a variety of diseases like kidney failure, cancer, heart disease, etc. If you have health insurance, you can either claim reimbursement or the insurance company will clear the bill directly with the hospital. 

Difference between health insurance and Mediclaim: 

Flexibility: With limited coverage, Mediclaim policies are not flexible, but they are helpful when it comes to cover for hospitalisation. Health insurance plans are flexible, and policyholders can customise their plans like selecting the preferred sum-assured amount.

Comprehensive cover assured: The coverage is usually restricted to Rs. 5 Lakhs under a Mediclaim policy. Since the coverage of Mediclaim is limited, the expense of the insurance policy is also lesser than a health insurance policy. However, for a Health insurance policy one can even opt for a Sum Insured of 50 Lakhs based on the age, location and other factors. This increase the premium for a health insurance plan but the coverage is wider too. 

Add ons: Mediclaim doesn’t offer any add-ons that can be added to the base policy. However, a health insurance plan offers numerous add-ons covers such as Critical Illness Cover, Maternity Benefit and Infertility Cover, etc. that can be added to the base policy. 

Ambulance charges: A Mediclaim policy does not allow for reimbursement of ambulance charges. However, in most health insurance policies ambulance charges are allowed up to a limit and are later reimbursed by insurance companies. 

Maternity benefit: Mediclaim usually covers the cost of hospitalization for specified illness but they do not involve any spends expenses on maternity costs whether it is a caesarean or any medical treatment for the child. But these things are possible in a health insurance policy. 

Benefits of Mediclaim 

You can get immediate coverage from medical expenses when you are hospitalized 
If you opt for Cashless Mediclaim policy, your insurer directly pays for the expenses 
If you opt for Reimbursement, your money will be reimbursed by the insurer 

Benefits of Health insurance 

• Gives you a comprehensive coverage 
• Provides you with numerous add-ons 
• You can opt for a Family Floater Health Insurance plan to cover all family members under one collective health insurance policy. 
• Pre and Post hospitalization expenses are covered 
• Gives you the option to opt for a Critical Illness cover 
• You can opt for benefits like Outpatient benefit, Maternity Benefit, Restoration benefit, etc. 
• For your parents, you can opt for a specific senior citizen health plan. 
• Cashless claims are available 

Which one should you buy, Mediclaim or Health Insurance? 

Your decision will depend on several factors, such as: 

Your financial condition 

• Health issues you and your loved ones are dealing with 
• Whether you believe in long term or short-term planning 
• Whether you need flexibility in your health plan or not 
• Whether you would need add-on covers and benefits 
• Willing to pay high or low premium 
• Keep in mind yours or your family members age, life stage, medical condition 

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The best way to identify and evaluate the policy you need is to assess your healthcare needs and that of your family. Health insurance provides you the much comprehensive and wider coverage when compared to Mediclaim. Whereas, Mediclaim is generally suggested for relatively younger people who is looking to save on premium payments. So, one should choose a plan not only keeping in mind the premiums but also the future benefits. 

(By Sudha, Head, Health and Travel at Digit Insurance)