Every few months, a headline shakes people’s faith in health insurance. Recently, some large insurers had their cashless services suspended by hospitals due to disputes over dues. Even the government-backed CGHS scheme faced disruptions, with hospitals refusing to treat patients because payments had been pending for months.
Health insurance is meant to provide peace of mind, but the real world is far messier.
The Messy Triangle: Hospitals, Insurers, and Patients
In theory, each party in the healthcare chain should uphold its responsibilities.
In reality, the picture is far more complicated:
-
Hospitals may inflate bills, push unnecessary procedures, or deny cashless admission citing “insurer approvals.”
-
Insurers delay or reject claims based on fine-print exclusions or medical history gaps.
-
Patients, often unintentionally, fail to disclose old surgeries, minor procedures, or past conditions while buying a policy — details that later appear in medical records and become a reason for claim disputes.
None of this usually comes from malice — it comes from incentives, pressures, and human forgetfulness.
But together, they create a system where trust breaks down quickly.
Even when a claim is finally approved, there are instances where the insurer refuses to renew the policy or moves the customer to a costlier plan.
The final dish that comes out of this messy kitchen rarely tastes good for anyone — but it is always the patient who suffers the most.
Health Insurance Is Still Essential
Despite its flaws, health insurance is non-negotiable.
It remains your first defence against medical inflation and hospitalisation costs.
Your basics must always be in place:
-
Maintain adequate cover (₹10–15 lakh for a family of four is a good starting point)
-
Disclose everything honestly — even small medical issues
-
Keep the policy active and avoid lapses
But a second layer of safety is equally important — your Medical Buffer.
“Isn’t That Just Another Name for an Emergency Fund?”
This is a logical question many readers might ask.
Your Emergency Fund comes first.
It protects you from job loss, family emergencies, and unexpected expenses.
But once that’s ready, a Medical Buffer deserves its own space.
Here’s why:
-
It exists only for health-related expenses.
-
It protects you specifically when claims are denied or delayed.
-
It helps you handle annual premium hikes as you age.
-
It covers items not included in regular insurance (OPD, diagnostics, dental care, home care).
Think of it as a dedicated health chest — the reserve you hope to never use, but are deeply relieved to have.
Why You Need a Separate Medical Buffer
1. Claims Are Rejected for Small, Forgotten Details
When we see a doctor, we narrate every small detail because we want accurate treatment. And doctors record all of it.
But when buying health insurance, many details simply slip our minds — a stitch given 12 years ago, a minor fracture, a short course of BP medicine.
Later, insurers see these details in your medical records and raise the flag of:
“Non-disclosure of material information.”
A medical buffer protects you when this happens.
2. Health Premiums Rise Sharply With Age
Unlike term insurance, health insurance premiums increase every few years.
At 40, the amount seems fine.
At 60, it can feel heavy — especially if you’re retired.A medical buffer gives you the freedom to:
-
Opt for a higher deductible
-
Choose a lower-cost plan
-
Cover some expenses from your own reserve
-
Maintain dignity and independence during retirement
It becomes your long-term hedge against rising premiums.
-
3. Not Everything Is Covered by Insurance
Many costs come from your pocket:
-
OPD visits
-
Diagnostic tests
-
Physiotherapy
-
Dental procedures
-
Homecare
-
Post-hospital recovery
-
Certain day-care treatments
A dedicated buffer ensures these don’t disturb your monthly finances.
-
How Much Should Your Medical Buffer Be?
Start modest, then build steadily –
₹3–5 lakh for working individuals or young families
₹8–10 lakh for senior citizens or those with chronic conditions
Because this is above and beyond your emergency fund, it doesn’t need to sit entirely in ultra-conservative options. Medical costs rise much faster than normal household inflation — often at 10%–14% a year — so keeping the entire buffer in low-yield instruments may not be ideal.
Suitable options include:
Conservative Hybrid Funds (Equity Savings / Low-Volatility Hybrids)
Aggressive Hybrid Funds (in a smaller proportion) for those comfortable with higher equity exposure
Multi-Asset Funds that maintain a balanced mix of equity, debt, and gold
These give your corpus a chance to grow without taking undue risk. The goal isn’t aggressive returns — it’s steady, inflation-beating compounding while still maintaining reasonable accessibility.
In Summary
Health insurance reduces the financial shock of big medical bills.
A Medical Buffer fills the gaps — speed, denials, premium rises and everyday health costs.
Together, they give your family a complete shield against the unpredictable nature of healthcare.
Think of it this way:
Insurance is your umbrella — it shields you from most of the storm, but in a heavy downpour, you still end up a little wet.
Your Medical Buffer is the waterproof backpack — carrying what you need to stay dry, and secure.
🩶 Medical emergencies don’t wait. Your planning shouldn’t either.
🤝 If you’d like me to review your health cover and help you build a practical medical buffer, I’m here to help → https://WealthWisher.in/book-a-call
🕒 A 15-minute conversation today can bring years of peace tomorrow.
Join Our Mailing List
Once Weekly Webinar
Free Webinar Once Per Week
Our free webinar runs once per week and is available to anybody who wants to know more about getting started on the road to financial freedom.