Mediclaim vs. Health Insurance: What's the Better Choice for Employees in 2025?

As healthcare costs continue to rise in India, both employers and employees are exploring the best insurance options to ensure financial security in times of medical emergencies. Two of the most common types of medical coverage are Mediclaim and Health Insurance. While they may seem similar at first glance, there are significant differences between the two — especially in terms of coverage, flexibility, and long-term benefits.

So, if you're wondering which is better for salaried employees, here’s a comprehensive comparison to help you make an informed decision.

1. What is the Difference in Coverage?

One of the primary differences lies in the scope of coverage.

• Mediclaim only covers hospitalization expenses. This means it becomes active only when a patient is admitted to a hospital for at least 24 hours.

• Health Insurance, on the other hand, offers comprehensive coverage, including pre-hospitalization and post-hospitalization expenses. These could be consultations, diagnostic tests, ambulance charges, and follow-up treatments.

If you're looking for a plan that covers more than just hospital stays, health insurance offers better value.

2. Coverage Limitations: How Much is Enough?

Typically, Mediclaim policies come with a fixed coverage limit, often up to ₹5 lakh per year. This can be sufficient for minor procedures but might fall short in case of critical illnesses or surgeries.

Health insurance plans offer more flexibility, allowing policyholders to increase coverage based on personal needs, family history, or inflation-adjusted healthcare costs. With health insurance, you can opt for top-up plans or riders for critical illness, maternity, or even outpatient care.

3. Do You Always Need Hospital Admission to Claim?

Yes, in the case of Mediclaim, you must be hospitalized for at least 24 hours to file a claim. There is no coverage for daycare procedures or OPD visits.

However, health insurance plans have evolved. They now include daycare treatments, teleconsultations, and even cashless OPD consultations at network hospitals. This makes health insurance more suitable for modern-day medical needs that don't always require full hospitalization.

4. What About Ambulance, Diagnostics, and Doctor Fees?

Mediclaim often does not cover additional costs such as:

• Ambulance services

• Pre-surgery diagnostic tests

• Specialist consultation fees

Health insurance policies, especially from private insurers, usually cover all these expenses, which can significantly reduce out-of-pocket payments.

5. Number of Claims Per Year

Both Mediclaim and health insurance allow multiple claims per year, but there’s a catch.

• In Mediclaim, you can file several claims only until the coverage amount is exhausted. Once the sum insured is used up, you can’t claim again until the policy is renewed.

• Health insurance provides more sustainable support, often with features like automatic sum restoration and annual renewals with added bonuses or increased coverage.

6. Diseases Not Covered Under Mediclaim

Many Mediclaim policies exclude treatments related to:

• Plastic surgery

• Infertility (IVF)

• Genetic disorders

• Sexually transmitted infections (STIs)

• Illnesses contracted within the first 30 days of policy issuance

In contrast, health insurance plans offer add-on options or riders to cover these, making them more adaptable to individual health requirements.

7. Why Health Insurance is Now a Necessity, Not a Luxury

With medical inflation rising at an alarming rate, even a short hospital stay can burn a hole in your savings. Health insurance provides financial security, ensuring you get quality treatment without compromising your finances.

It’s no longer considered a luxury but a basic necessity, especially for salaried professionals living in metro cities where treatment costs are steep.

Conclusion: Which One is Better for Employees?

For employees, health insurance is undoubtedly the better option. Its wider coverage, flexible benefits, and inclusion of non-hospitalization expenses make it a more reliable financial safeguard.

While Mediclaim might be suitable for basic or emergency hospital stays, health insurance aligns better with modern healthcare needs — especially for families, aging parents, or individuals with pre-existing conditions.

Employers too are recognizing this shift and increasingly offering comprehensive group health insurance policies to attract and retain talent.