Health Insurance Policy With Cashless Hospital Facility is a Must

Health Insurance is one of the essential allocations made by an expert in their financial plan. Insurance is risk mitigation technique against uncertain health risks in monetary or financial terms. It is one of the most crucial investment decisions which helps you in emergencies. Health insurance policy is to cover the financial costs on account of unexpected hospitalization and other related expenses. The last thing that any patient would want is to pay these costs and bear the financial cash outflow, thus endangering their financial position. 

However, did you know that there are insurance policies with a cashless claim settlement option? Yes, that is correct, a cashless claim settlement policy provides the policyholder to be free from all the costs associated with the medical emergency including the costs of Hospitalization. 

For example, if you face a medical emergency, and require to be hospitalized, then don’t you worry. These insurance policies have got you covered, including the short term liquidity needs. With the advancement in technology and higher-than-normal medical inflation, the cost of curing any disease has become extremely expensive. Such cashless hospitalization facility in your health insurance allows you not to get medical treatment in the best of hospitals.

What exactly is cashless hospital facility?

A cashless Health insurance facility is a contractual arrangement between three parties – The policy holder, the insurance company and the network hospital. In case of a medical insurance claim filed by the policyholder, the insurance company pays the covered costs directly to the hospital, subject to the approval of the claim as per the terms and conditions of the insurance policy. Traditionally, the insurance contract acted as a reimbursement tool wherein the medical expenses paid by the insured, were reimbursed to the insured in 40 to 60 days from the date of filing the claim. This resulted in a temporary cash outflow for the policyholder and increased their financial burden. 

With cashless hospital facility, the burden of these costs is essentially transferred to the insurance company, as per the terms of the insurance contract.

How does it work?

The insurance company associates with different hospitals across different locations to provide the cashless facility to the insured. The insurance company does its share of due diligence for the costs associated, quality of services, employee strength, empanelment of doctors etc, before actually agreeing to associate with the hospital for offering the cashless facility. Once this association is sealed, the hospital is said to be part of a network hospital for the insurance company. 

A network hospital is one such hospital which is covered under the cashless scheme of settlement for that insurance company. The renewal of contracts between the network hospital and the insurance company generally happens annually, subject to the standard due diligence procedures. 

There is a Third Party Administration authority (TPA) acting as the bridge between Insurance companies and the hospitals with respect to the claim settlement process. The representative of the TPA team is present at the hospital desk to streamline the claim settlement process. All these arrangements are made by the insurance company to ensure hassle-free medical procedure takes place without the worries of claim settlement.

How to avail Cashless benefits?

Any insurance claim process would begin with filing a claim with the insurance provider. In case of cashless policy, you will have to fill a pre-authorization form at the hospital’s insurance desk or with the help of the TPA’s agent. The TPA then approves the insurance claim based on the agreed contractual terms of the policy. Primarily, there are two conditions for Cashless health insurance claim;

  1. Planned Hospitalization: “Planned,” itself tells that you are well aware in advance that you might need hospitalization in the near future. It has to be also brought to the insurance company’s knowledge about your hospitalization. You need to fill the pre-authorization form at the insurance desk. It will be verified, then sent to the TPA for his acceptance or rejection. Also, take your policy card and Aadhar card along.
  1. Emergency Hospitalization: Emergency doesn’t come with prior notice; you might not have the time to complete the formalities for the cashless claim. You would have 24 hours to do the same. Also, your relative can fill the pre-authorization form on your behalf, and then your request will be processed within 6 hours by TPA. In case you don’t have the time to wait for the claim approval, you can pay the amount in cash and would be reimbursed later from the insurance company.

Types of Cashless health insurance policies

Cashless Health Insurance is broadly categorized into three types of policies:

  1. Cashless Individual Health Insurance – Under this insurance policy, the cashless claim is provided to the individual policyholder against the hospitalization expenses, as per the rules and regulations mentioned in the policy.
  1. Cashless Family Floater Health Insurance – In a cashless family health insurance plan, all the family members are beneficiaries and covered by the same health plan. Members can avail cashless hospitalization along with the other benefits.
  1. Cashless Senior Citizen Health Insurance- As per terms and conditions, this kind of health plan offers covers hospitalization costs, ambulance costs, etc, and is specifically designed for senior citizens.

Why is Cashless health insurance important?

What if you don’t have enough cash at your disposal? Or you don’t have access to the ATM at the time of medical emergency? You never know what can come before you the next moment. At such times of medical crisis, cashless health insurance is not less than a miracle for you. 

Benefits of cashless health plan might vary according to the insurers and health insurance plans. Here are a few essential benefits of a cashless health insurance policy:

  1. Peace of mind:  The most crucial benefit of cashless health insurance is the peace of mind and the relief from no actual cash outflow. Even if enough funds are not available at your disposal, you don’t have to compromise on the best medical treatment. You don’t have to worry about the finances in case of a medical emergency. 
  1. Comprehensive CoverageAn insurance policy with complete coverage also offers cashless facility. Cashless health insurance covers all the costs including but not limited to medical tests, diagnosis, ambulance expenses, doctor’s fees, i.e. all the pre-hospitalization as well as the post-hospitalization expenses. These costs are subject to the terms of the insurance contract and may vary on a case to case basis.
  1. Best Treatment AssuranceCashless Hospitalization obviates the complexities in case of a medical emergency, leaving you with just quality treatment. When it comes to medical treatment under the health insurance policy, you are assured of getting the best medical treatment from one of the best hospitals, and you are adequately covered. The insurer provides you with a complimentary one-time medical check-up and diagnostic test as an add-on facility. 
  1. Tax BenefitsThe amount of premium paid by the policyholder is allowed as an exemption from income for the insurance policyholder under section 80D of the Income-tax Act, 1961. The maximum amount of deduction allowable as per the provisions of the Act shall be determined based on the age bracket of the sponsor of the insurance and their parents.

All in all, the cashless insurance facility has proved to be a boon to people, especially in a crisis like situation. It reduces your financial burden at the time of medical emergency, at least to the extent of your health insurance coverage amount. Of course, even in cashless insurance, most hospitals demand a nominal deposit as a safety measure but that is still much better than paying the entire amount from your pocket. 

FAQs: Cashless Health Insurance Policy

Which are the best Mediclaim policies for an individual in India?

Technically, many policies are providing similar benefits and IRDA approves all of them. This keeps all benchmarks identical and comparable. The value-added features may vary in each of the policies and actually becomes the differentiating factor. It is essential to analyze our needs and requirements in depth. There is no single product, which can be classified as the best Mediclaim and health insurance. You must always focus on one product best suited to you.

What is the difference between health insurance and Mediclaim? And which one is better and why?

Often, these two terms are used interchangeably. However, it is important to draw the dividing line between the two.

Mediclaim pertains specifically to the hospitalization costs. The policy generally covers the medical expenses as a result of Hospitalization / Domiciliary Hospitalization of the insured. This is generally on an indemnity basis.

On the other hand, Health Insurance is much more comprehensive and provides a cover that extends beyond hospitalization. It provides additional items of coverage like outpatient cover, accompanying person, restoration benefit, critical illnesses coverage, hospital cash policies, super top-up policies, insurance for a specific illness etc.

The need of today is a policy covering all or at least most of the requirements under one single umbrella. Ideally, a person should look for a policy which has maximum options which suit their unique requirement matrix.

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