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Difference between government health insurance plans and private medical insurance policy

Team AckoDec 6, 2024

To provide affordable and quality healthcare, the Government of India (GoI) has introduced several government health insurance schemes to cater to different requirements. The health insurance schemes offered by the government include both the Central and State Government initiatives. Both government and private health insurance policies have their unique features and benefits. It caters to different requirements of the policyholder. Let’s look at how they differ.

Government

Contents

Government vs. private medical insurance policy
Difference between private vs government health insurance scheme for senior citizen
Other Important Points to Remember:
How to choose between Government and Private Insurance?
Why is Health Insurance Important?
Difference Between Private and Government Health Insurance Schemes for Senior Citizens
- Tips to remember before buying a private or a government health insurance plan for senior citizens
Conclusion
Frequently asked questions

Government vs. private medical insurance policy

FEATURES	GOVERNMENT HEALTH INSURANCE PLAN	PRIVATE HEALTH INSURANCE PLAN
Premium	Lower premium	Higher premium
Discount	Highly discounted by the government	Competitive pricing
NCB benefit	NCB not available	NCB available
Coverage	Provides coverage with an upper limit	Full coverage on most medical expenses
Sum insured amount	Moderate sum insured amount	Higher sum insured amount subject to payment of higher premium
Customers	Targeted at low-income individuals or families	Open to everybody

Difference between private vs government health insurance scheme for senior citizen

Health insurance is a necessary shield against unforeseen medical challenges today. Whether it is a simple checkup for an underlying ailment or an accidental injury requiring immediate medical attention, health insurance ensures that any medical need is well looked after without worrying about lengthy medical bills.

Both private and government health insurance plans offer unique benefits. While some plans guarantee advanced medical facilities but with higher premiums, others provide plans at affordable rates. Read on to learn which would suit you the best.

Other Important Points to Remember:

With private insurance, you’re often faced with additional costs such as deductibles, co-pays, and coinsurance, which can quickly add up, particularly with more comprehensive plans. In contrast, government-provided insurance typically has lower out-of-pocket expenses, though the coverage tends to be more limited.
Private plans generally offer a wider range of treatments and services, including those that may not be covered by government schemes. However, government insurance focuses more on essential healthcare, and you may need to meet specific criteria to access specialised care.
Another factor to consider is hidden fees. Private insurance may charge extra for out-of-network care, which can be unexpected if you’re not cautious. Government insurance, however, tends to have more predictable, standard costs, making it easier to manage and avoid surprise charges. Ultimately, choosing the right plan involves understanding both the costs and coverage to ensure it meets your needs.

How to choose between Government and Private Insurance?

1. Understanding Your Healthcare Needs

Consider how often you need medical care. If you require frequent visits to specialists or advanced treatments, private insurance may be more suitable, offering comprehensive coverage. For basic healthcare needs, a government insurance scheme may suffice, covering essential services without the higher cost.

2. Evaluating Your Budget for Insurance

Look at your finances. If affordability is key, government health schemes like Ayushman Bharat or NHS services are often more cost-effective, with low premiums or no cost. If your budget allows, private health insurance offers more coverage options and benefits, though with higher premiums.

3. Choosing Your Preferred Healthcare Providers

If you prefer more control over your doctors or wish to access private hospitals, private insurance may be the better choice. Private plans offer access to a wider network of hospitals and specialists. Government insurance, however, often limits you to NHS hospitals and a specific set of providers, though these are more affordable.

4. Considering Wait Times and Accessibility

If quick access to healthcare is a priority, private insurance typically offers shorter wait times for treatments and consultations. Government insurance can result in longer wait times, especially for non-urgent care, due to high demand and limited resources in public healthcare.

Why is Health Insurance Important?

The importance of health insurance cannot be overstated. It plays a vital role for many reasons, some of the most significant being:

Financial Protection: As parents age, they often require more healthcare services. Insurance safeguards their savings by covering unexpected medical costs.

Access to Better Healthcare: With adequate insurance, parents can receive necessary treatments and services without worrying about hefty expenses.

Peace of Mind: Knowing your parents are covered during medical emergencies and planned procedures brings comfort to both you and them.

Preventive Care: Many insurance plans include routine check-ups and screenings, allowing for early detection and prevention of health issues.

Chronic Condition Management: For parents with ongoing health conditions, insurance helps manage the costs of treatments and medications.

Enhanced Quality of Life:When healthcare costs do not burden parents, they can focus on enjoying their later years and maintaining good health.

Specialised Care:Aging parents may need specialised or long-term care, which can be very expensive without insurance.

Tax Benefits:Paying for your parents’ health insurance may entitle you to a tax rebate — INR 25,000 for those under 60, and INR 50,000 for senior citizens.

Flexibility in Healthcare Providers: Depending on the plan, parents may have the freedom to choose from a variety of healthcare providers, ensuring quality care when needed.

Difference Between Private and Government Health Insurance Schemes for Senior Citizens

With the rising costs of medical treatment, having health insurance has become a must. However, there are both private health insurance plans and government-run schemes available for coverage, which can be confusing to choose from. Hence, here is a comparison between the offerings of both types of plans.

Parameters	Private Health Insurance Scheme for Senior Citizens	Government Health Insurance Plan for Senior Citizens
Definition	Any health insurance plan offered by a private general insurance company instead of the government is known as a private health plan. These plans provide access to the higher sum insured and advanced medical care, usually at a higher premium.	Subsidised senior citizen health insurance plans by the government are referred to as government health plans. It could be free or reduced to provide access to quality healthcare at an affordable cost.
Coverage	It covers a range of medical expenses that an individual may incur in a year. And access to a wide network of private hospitals.	It covers a range of healthcare costs that an individual may incur in a year. Mostly these benefits are available in government hospitals.
Benefits	Low-cost to high-cost policies, depending on the coverage you select, Access to advanced medical care, High sum insured Access to a vast network of hospitals, Access to top-up and super top-up plans, Restoration of the sum insured	Low-cost policies, Backed by the government, Ensures the underprivileged have access to health insurance cover
Inclusions	In-patient hospitalisation, Pre and post hospitalisation charges, AYUSH benefits Ambulance cost, Organ donor charges, Critical illness cover (If applicable), Daycare procedures (If applicable), Domiciliary hospitalisation	Same
Exclusions	Illnesses contracted within 30 days of policy commencement, Dental treatments unless it is due to an accidental injury, Sexually transmitted diseases (HIV/AIDS), Self-inflicted injuries, Cosmetic procedures, War and related perils, Hearing impairment, Vaccination/inoculation, Pregnancy, Treatment availed outside India, Treatment for alcohol or drug abuse, Psychiatric disorders	Dental surgeries, cosmetic procedures, treatment for drug abuse and alcohol, HIV/AIDS, self-inflicted injury, and psychiatric disorders.
Tax Benefits	Tax benefits under Section 80D	Since this is a government scheme, there are no particular tax benefits under Section 80D.
Claim settlement	Cashless and reimbursement	It is sometimes slower than the private alternatives, but also offers cashless settlement.
Pros	Low-cost to high-cost premiums and access to advanced medical care	Low-cost and affordable premiums
Cons	High premiums	Limited sum insured

Tips to remember before buying a private or a government health insurance plan for senior citizens

Here are some of the factors that you must consider while comparing private and government health insurance schemes for senior citizens.

Age: The entry and maximum age for renewal of the policy are essential factors in purchasing a senior citizen plan. Plans with lifelong renewability certainly offer more scope.

Sum insured: Having a higher sum insured or adequate coverage is vital while choosing a good health plan for senior citizens. Choose a plan that offers enough insurance coverage.

Waiting period: Opt for a plan with a lesser waiting period as senior citizens are prone to age-related illnesses.

Hospital network: Choose a plan that has a wider network of hospitals, especially if you are opting for a private health insurance plan for senior citizens.

Specific illness cover: Based on the individual’s specific health care requirements, opt for a plan that covers a specific illness which the individual may require.

Read the read and conditions: You must read the terms and conditions before opting for a senior citizen health plan. Understand the inclusions and exclusions to avoid unwanted surprises during claim settlement.

Cost: Typically, senior citizen health insurance plans are expensive due to higher deductibles and copay, especially when you are looking for a comprehensive cover. Choose a health insurance plan for senior citizens based on needs and the cost.

Conclusion

Both private and government health insurance plans have their own advantages. Private plans offer more flexibility, a wider choice of hospitals, and comprehensive coverage but come at higher premiums. Government schemes, while more affordable, provide essential coverage and cater to a larger section of the population, though with limited options for private healthcare. Ultimately, the choice depends on individual needs, budget, and preference for healthcare facilities.

Frequently asked questions

Here are a few questions about private and government health insurance schemes for senior citizens.

Can anyone buy government health insurance policies for senior citizens?

Different health insurance plans have different eligibility criteria. You need to check the required criteria to buy government health insurance schemes for senior citizens.

What is a free-look period in a senior citizen health insurance plan?

The free-look period in a health insurance plan is a time period that allows the policyholder to review the terms and conditions of the plan and decide whether to opt for the plan or not. Normally, the free-look period of such plans is between 15-30 days. However, this may vary from insurer to insurer.

What is copayment in a health insurance policy?

The co-payment in a health insurance policy refers to an agreement between you and the insurance company. Here, you pay a portion of the medical care bill from your pocket, and the insurer will pay the balance amount.

Is there a difference between private and government healthcare?

There is no difference between these two types of healthcare. However, government healthcare is typically provided in a government based hospital, while private healthcare is offered at private hospitals. Also, amenities in private healthcare are slightly better and advanced than government healthcare.

I have a government senior citizen health insurance plan. Can I get additional coverage with a private senior citizen health insurance scheme?

Yes, having adequate coverage is crucial, especially if you opt for a senior citizen health plan.

Can I buy government health insurance plans for senior citizens online?

Some government health schemes can be bought through the direct bank debit facility; however, not all plans can be purchased online.

Disclaimer: The content on this page is generic and shared only for informational and explanatory purposes. It is based on industry experience and several secondary sources on the internet; and is subject to changes. Please go through the applicable policy wordings for updated ACKO-centric content and before making any insurance-related decisions.