A medical emergency can put a family's savings under pressure, especially when it does not have health insurance. A hospital bill running into lakhs of rupees can force people to dip into their savings, borrow money or even delay treatment.
Therefore, medical financing is emerging as another option for such patients. Instead of paying the entire hospital bill upfront, they can spread the cost over monthly equated monthly instalments (EMIs). The arrangement can make a large expense easier to manage, although patients must weigh the interest and other charges before signing up.
Why Are Medical EMIs Gaining Importance?
The need for alternative ways to pay medical bills is significant in India, where many households still bear a large share of healthcare costs themselves.
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Gaurav Gupta, Co-Founder and CEO of CarePay, told NDTV that the absence of health insurance should not force people to postpone essential medical treatment because they lack immediate funds. "Six in 10 patients delay treatments, with 93 per cent of these delays linked to a lack of immediate funds," Gupta said.
He pointed out that the problem is not always whether patients can afford treatment in the long run. It is often about arranging a large amount of money when it is needed.
Medical EMIs can help bridge this gap by breaking a one-time expense into smaller payments. Patients can access financing at the point of care rather than arrange the entire amount before treatment.
Gupta said this could also help hospitals and clinics reduce cases in which patients abandon or postpone treatment because of financial constraints.
However, he stressed that medical financing cannot replace health insurance. While insurance protects patients against covered medical expenses and financial risks, EMIs help them pay for treatment over time. Both can play a role in improving access to healthcare.
How Much Can A Medical EMI Cost You?
The monthly instalment may look manageable compared with a large hospital bill. But patients must calculate the total repayment amount before choosing this route.
Paramdeep Singh, a seasoned financial advisor and Founder of Long Tail Ventures, told NDTV that medical EMIs could be useful, but the ability to pay a bill in instalments should not be confused with the ability to afford it.
India continues to face a healthcare financing gap. Out-of-pocket expenditure accounted for 39 per cent of the country's total health expenditure in 2021-22, Singh said. For families without adequate insurance, a major hospitalisation can mean selling investments, borrowing from relatives or postponing treatment. Medical EMIs provide another option, particularly when care cannot wait.
Consider a hospital bill of Rs 5 lakh financed over 24 months at an annual interest rate of 15 per cent. The monthly EMI would be approximately Rs 24,200. The total interest would be around Rs 82,000, taking the total repayment to nearly Rs 5.82 lakh.
The instalment may fit one family's budget but strain another's finances. Patients must therefore assess their monthly income, existing loans and essential expenses before committing to repayments.
What Should You Check Before Taking A Medical EMI?
Singh cautioned that patients seeking urgent treatment may not have enough time or the mental bandwidth to compare financing options. This makes transparent pricing and responsible lending particularly important.
Before accepting a medical EMI, patients should check the following:
- Interest rate: Find out whether the loan carries interest and what the effective annual rate is.
- Processing fees: Check for upfront charges that could increase the total cost.
- Penalties: Understand the charges for missed or delayed instalments.
- Zero-cost EMI claims: Verify whether the offer includes hidden charges or whether choosing EMI means giving up a discount available on upfront payment.
- Total repayment: Compare the full amount payable with the original hospital bill rather than focusing only on the monthly instalment.
Patients should also ask whether the financing is optional, compare available offers where possible and read the repayment terms before signing. Singh said medical EMIs could address an immediate liquidity problem, but they could not solve India's broader healthcare affordability challenge on their own.
For households without health insurance, medical financing may offer a way to arrange treatment without paying the entire bill at once. But it is still borrowing, and the obligation to repay remains even after the treatment is over.
Medical EMIs can help patients access care when they need it. The key is to understand the cost, borrow within one's means and avoid treating instalments as a substitute for adequate health insurance.