Thursday, 2 July 2009

Who should pay for Medical Insurance ?

It is human to forget about your health when you are healthy. You are young and fighting fit and who wants to think of sickness and hospitals ? May you be blessed to remain that way always. But just in case …..

Its a feature of our times that, God willing, we’ll all live longer. But as we live longer, a variety of old age diseases and disabilities will become inevitable. Medical costs can be one of the biggest liabilities of the future and it is only prudent that we provide for it.

This post argues that employer provided insurance is the worst system that can be. It’s a dinosaur that should be quickly made extinct. Here’s why .

In the good old days, when you joined a company and you retired from it, the employer providing medical cover was a great idea. The employer even provided for cover after your retirement. Perfect. And then came Armageddon. Just look at what happened to General Motors.

This stone age practice has continued. Employers still provide medical cover in countries where there is no public or government cover. This is the situation in the US, India and China. (unlike in the UK where there is National Insurance). And I’m willing to bet most of us are covered by our employers and are sleeping easy. I was covered by my employer too. And I slept easy too. Big Mistake.

The biggest argument against relying on employee cover is what do you do when you retire. That’s when most of your medical expenses might come up. At 60 or so, when you go for cover, you’ll find it either refused, or with a zillion exceptions, or at an outrageous cost. All the years when you were young and had little medical expenses are “lost” – your past employer has taken the benefit in terms of reduced premiums.

What happens when you get sacked ? What happens when you might decide later in life to “do your own thing” ? What happens when your employer goes bust – you’ll find gaping holes in his insurance plans, I ‘m prepared to bet.

I suggest each of us, irrespective of how old we are, and what our employer covers, goes out and buys a private insurance. As early in life as possible. And hope to God that we never have to use it. It’s the best investment we can make.

And to those of us who have children, buy the insurance, the day our darling is born. That’s one of the best gifts we can give the child for the future.


Anonymous said...

You hit a raw nerve. The insurance scenario is really scary and so unreliable. We know a guy here who needs surgery for his back as soon as possible - the prob is he ll be out of commission for couple months after surgery, which could give reasons for his employer to fire him. If waits for surgery and then gets fired, hes is in a bigger mess. Private insurance in the US is so costly. The UK and I think France too has an amazing health care and coverage.

Ramesh said...

Yes thoughtful train, the situation in the US is awful. Obama is trying to tackle this but with so many vested interests, chances of success are low. Not sure if its possible to negotiate with an employer to give the allowance and for you to cover privately (problem is that its highly tax ineffecient) For persons of Indian origin I think a cover back in India might also be a good idea - in case of a disaster, there's at least something to bank on.

Hang said...

Good suggestion. Private insurance is a good option to consider.

Anonymous said...

Yes, what you say makes sense.
BTW, you got tagged. :-)I wouldn't mind if you are tired and don't wish to take it up.

Preeti Shenoy said...

What you say is valid.
But I think the best 'insurance' one can take is to have a healthy lifestyle.Eat right,Don't smoke, exercise, practise Yoga, Watch your weight. Yes--it sounds boring and drab, but it is truly the best thing one can do if one wants to be around for one's children.
Heart disease kills 7.1 million people globally each year. And India accounts for a whopping 60% of it. The cause is same as else where-- tobacco use, high levels of cholesterol (mainly due to a faulty diet) and hypertension.

I think if the companies really care for their employees (more so from the point of view of their families)they should make huge efforts is promoting a healthy lifestyle among their employees. Just like how wearing seatbelts became second nature (due to very good propaganda and initiatives taken) diet and exercise should also be made second nature.
Most people especially at senior levels in India, work such long hours; How many are really fit? (I judge from the photos I see in Business Magazines--and from what i saw around me while I was in India. Pls correct me if i am wrong)
Prevention is always better than cure. If one is blessed with good health, one has to guard it jealously. I truly believe that.
I just wish more people would open their eyes.

I know some remarkably healthy 70 year olds and people in their sixties who are easily fitter than some in their forties or even thirties and they show absolutely no signs of these so called age-related diseases.

It all boils down to choices we make.

(As you can see this post struck a chord!)

Ramesh said...

@ Hang - I think its a good option in China as I see the insurance companies like Ping An active with fairly good schemes

@thoughtful train - Love your tags always - will go now to your blog and pick it up

Anonymous said...


One thing companies can definitely do is help maintain a balance between the employee's work life and personal life. How many companies really care about this? I think a good balance would really help maintain good health.
Of course primary responsibility lies with the individual but I think the companies should def help. Buying pvt insurance is definitely a good suggestion. Thanks.

Ramesh said...

@ Preeti - Thanks for a brilliant comment. Absolutely right. A healthy lifestyle is the best insurance policy, of course. I so agree with your comment, that one of these days I am going to make a separate post on " healthy working ".

Ramesh said...

@Exkalibur666 - Completely agree with your comment. Companies should do more to promote healthy working life as well and not only force people into annual checkups.

Ajay said...

Agree with Preeti's comment above. Your point again duly noted :) I guess one doesn't think about insurance and provident fund at the start of one's career. One's more busy blowing off what one is earning. :)

Ramesh said...

@Ajay - I know. But it probably takes just a day or so to get it done. Worth doing ....

Anonymous said...

Preeti got it bang on. Whatever ever efforts we can take to keep ourselves healthy, we should. Employers should also come up with some stress management strategies. The picnics and parties, don't count - they add to the stress as you wrote in your previous post. :-D

Also some diseases just happen from nowhere - those are the ones I am terrified about, because they are in our genes and cannot be controlled.

Thanks for picking up the tag!! You are the best! And looking forward to the working healthy post. :-)

rads said...

What Preethi has said is so true...what's the use of covering medical bills when employees are made to work for 12 hours a day insteasd of 8 n packed with extra work on weekends (that's my husband's case right now)...all these benefits are just a plot in the corporate world to make us work like you said, employees shouldn't fall for it. And also private med-ins in US is too costly, atleast for Indians staying in US, coz we're mostly temporary and investing too much in that wud be a waste.

Anonymous said...

Ricky writes,

I acknowledge we should go for private insurance rather than depending on employer. However I have few thoughts. If you compare the life style for those people lived 100 years back may give some lessions. Their health always maintained well in spite of no hospital & no advanced medicines. They have not taken any extra care, by nature was helping them. The reasons, no short cut in life, limited desire hence very cautious in earning no cheating, no betrayal, they ate good food, no fertilizer were added in food grains, they enjoyed their life, no hurry burry, no cutting of trees and making huge huge apartments with swimming pool in roof terrace, no mobile phones ,mothers were taking care their children, children’s never denied for mother's feeding, ladies never worked in late night shifts ,they never consumed alcohol etc et……

In present life are we any one following any one of the above. How nature will support us. Fifty years back have any one heard about " Swine Flue". Nature never support, this generation will get empty number of decease. We over do everything, we are taking nature for granted, value system in life is going off. No Medicine or Insurance company can help this generation, even it helps only temporary. God only can help us.

I am not against modernization or technology or 21st century life style. I am against only over doing .None of the above in our control, because way of living has changed drastically .Atleast let us think Good & Do Good which may give some strengths to fight all the troubles in our day to day life.

Adesh Sidhu said...

Bang on. I am contemplating from sometime of buying private insurance. Will buy it soon.

Satish said...

Since an Insurance company pays my salary I could not have agreed more with your comments, Ramesh. Hear hear.
I also agree that if India could adopt the UK system it would be great (of course hoping that middlemen like normally happens did not make money). What surprises me however is that when you have the facility and Doctors available you tend not to fall sick - not wanting to tempt fate though. However agree that this is something one should definitely do and is especially relevant for post retirement time. Also while you do undertake Life Insurance one does not do the medical coverbit. Interestingly while even medical insurance is there, no disability cover exists. Therefore is say your illness prevents you from working, say post operation, while the operation expenses will be covered you may die of hunger since if it is an extended period even the employer may expect you to go on loss of pay. Will however take this up as an action and get this done as soon as I visit India.

Ramesh said...

@thoughtful train - Yeah; sometimes disaster comes from nowhere. Hence need the precautions

@Rads - Antidote for stress faced by husband - lots of TLC from rads !! :)

@Ricky - Thanks for visiting. Healthy living, in whatever form, is something we often neglect, but is vital to our well being. Very nice observation.

@Adesh - Thanks

@Satish - Here's an insurance man speaking ! Absolutely bang on, especially the advice on disability insurance. Its rather strange that the British ofetn criticise the NHS, but for everybody else in the world, it seems the ideal system.

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