Most Indians are just 'one hospitalization away from bankruptcy,' Zerodha's Nithin Kamath warns

India has one of the highest medical inflation rates in Asia, reaching 14%, and a staggering 71% of its workforce cover healthcare costs out of their pocket

Zerodha co-founder Nithin Kamath warned that most Indians were just “one hospitalization away from bankruptcy,” stressing the need for comprehensive health insurance.

Getting claims approved is also a problem due to a lack of full disclosure of policy exclusions, ambiguity caused by technical jargon, and claims rejected due to pre-existing conditions. (Representational Image/Pixabay)

Kamath wrote in a post on X that Indians should carefully choose insurers with a track record of at least five to ten years and a desirable claim settlement ratio in the range of 80-90% to avoid a financial difficulties in times of a health crisis.

“Most Indians are just 1 hospitalisation away from bankruptcy,” he wrote. "A good health insurance plan is mandatory."

Kamath also recommended selecting an insurer with a network of anywhere between 5,000-8,000 hospitals and an incurred claim ratio of 55-75%.

Why is it important to consider getting medical insurance?

India has one of the highest medical inflation rates in Asia, reaching 14%, meaning medical costs have growth this much, according to a report by insurtech company Plum, titled "Health Report of Corporate India 2023," which also found out that a staggering 71% of workers cover their healthcare costs out of their pocket and only 15% got health insurance support from employers.

There are also other issues such as getting insurance claims approved. 43% participants in a survey by Local Circles, involving 39,000 participants across 302 districts, struggled to get their claims approved due to a lack of full disclosure of policy exclusions, ambiguity caused by technical jargon, and claims rejected due to pre-existing conditions.