What is health insurance? Health insurance is an agreement or a contract between an insurance policy owner (the policyholder) and an insurance company (the insurer).
The insurer agrees to pay for part or the full cost of treatment incurred by the insured – i.e., the person covered by the policy. In exchange, the policyholder, who may or may not be the insured, pays a fixed amount of money (insurance premium) every month, quarter or year.
Variations in the Scope of Health Insurance
Health insurance plans have variable premiums, inclusions, exclusions, and terms. The following are some of the ways health insurance policies can vary:
Inclusions: Some health insurance plans provide coverage only for specific illnesses, while others cover all conditions. However, there are some that cover all conditions except pre-existing ones. Some cover only medical costs arising from accidents.
Coverage: Health plans typically cover in-patient benefits. These include hospital accommodation, surgery, operating room expenses, anesthesiaanaesthesia, radiology, intensive care, and laboratory procedures. Some include outpatient care (consultations and outpatient procedures) as well as dental, vision and/or mental health benefits.
Scope: Health insurance plans may provide coverage locally (i.e., UAE only), regionally (e.g., in the Middle East only) or internationally. With an international policy, you’re covered even when you’re travelling in another country.
Premiums: Premiums vary depending on age, inclusions, coverage, and scope. They typically increase yearly or every few years, and a plan may be renewable only up to a certain age.
Payment method: Cashless plans allow no cash-out treatments in network hospitals and accredited facilities and providers. Reimbursement plans pay cash directly to the policy owner or insured before, during or after the availed treatment or procedure.
Benefit limits: Health insurance plans have an annual benefit limit (ABL) from which all health claims filed throughout the year are deducted. The ABL resets every plan anniversary. Other plans have no cumulative limit but set limits on specific illnesses, while some have both an ABL and lifetime limits on individual conditions.
The Benefits of Health Insurance
Do you need health insurance? The law says you do. In the United Arab Emirates, citizens and residents are required to have health insurance. The UAE Cabinet has also made employer-funded medical insurance in the UAE compulsory nationwide. This decision takes effect on 1 January 2025.
Currently, only Dubai and Abu Dhabi require private sector employers to provide employees with health insurance benefits. In Abu Dhabi, employers must provide medical insurance not only to their employees but also to their employees’ families (spouse plus three children).
Even without considering the legal constraint, we cannot underestimate the importance of health insurance plans. The following are some of the specific benefits of health insurance:
1. Financial Protection
Health insurance pays for part or all of your medical bills if you become ill, protecting you and your family from the steep cost of healthcare.
As a case in point, one dialysis session can cost more than AED 1,000. If you need dialysis twice a week, you must pay over AED 2,000 per week. If you must keep up with the treatment for three consecutive months, you will spend AED 24,000. This amount may not even include the cost of nephrologist consultations, medication, and other incidental or related procedures.
A health insurance plan that covers some or all of your dialysis treatments will protect your finances. Without it, you will have to pay for the costly procedure yourself. That means taking money out of your savings, applying for a loan or even selling your assets to finance your medical care.
The financial support offered by health insurance becomes particularly crucial if your condition prevents you from working. If you have to take an unpaid leave of absence or must close down your business so you can focus on getting well, you won’t even have the assurance of a monthly income to support you and your family through your treatment. In this situation, health insurance takes care of your medical bills, so it doesn’t add to your family’s financial burden.
2. Better Access to High-Quality Healthcare
Health insurance makes healthcare more accessible. A ready network of hospitals, facilities and doctors you can visit for wellness check-ups, diagnostic procedures, and hospitalisation can make it easier to get necessary treatment, including emergency and specialist care. Furthermore, medical coverage can make you more willing to seek professional help whenever you feel unwell.
Since health insurance can pay for a significant part or all of your medical expenses, it makes high-quality healthcare more accessible. When you have health insurance, you don’t need to consider which hospital, doctor or procedures you can afford. The question becomes how much and what your insurance policy covers.
If you have a policy with a generous ABL and comprehensive coverage, you gain access to and can obtain healthcare that is beyond your capacity to pay if you were to rely only on your income, savings or assets.
3. Regular Check-Ups
Medical insurance plans typically include annual physical examinations. A health plan, therefore, naturally encourages regular wellness checks. This is particularly true of comprehensive plans that cover outpatient consultations, dental care, alternative medicine, and more.
Medical insurance ensures you can be seen by a doctor at least once a year. Thus, there’s a higher chance you can catch critical illnesses and manage them before they get worse.
4. Coverage for Pre-existing, Chronic and Critical Illnesses
Some insurance policies include coverage for pre-existing and chronic conditions. Even with waiting periods, specific claim limits and other restrictions, this can still be a big financial boost to anyone with pre-existing and chronic illnesses.
Critical illness cover is particularly valuable. Cancer, diabetes, heart diseases, and others like them are typically drawn out, requiring regular and consistent management and treatment. Without health insurance to shield you and your family from the cost of critical care, these conditions can deplete your financial resources.
5. Peace of Mind
A health plan that guarantees coverage for life (or up to a certain age) can ease your anxiety and give you peace of mind. While we don’t know when we will get sick, we know it’s bound to happen eventually. When we have health insurance, we can rest assured we will have the capacity to respond and seek treatment when it happens.
Health Insurance Protects You and Your Family
The importance of health insurance is undeniable.
It encourages you to seek medical care, gives you access to regular and high-quality healthcare, and ensures peace of mind with the assurance that you have the financial capacity to deal with unexpected medical expenses or fight critical, pre-existing and chronic illnesses.
One of the most important benefits of health insurance, of course, is how it cushions you from the financial impact of healthcare and medical treatment.
HAYAH is an insurance provider licensed and regulated by the UAE Central Bank.
We offer health insurance plans, including Health Protect, that you can get with regional or worldwide coverage. Talk to us to learn about your health insurance options.