In 2018, my mother underwent knee surgery after enduring severe pain for two years. Although we had medical insurance, we were unfamiliar with its terms and conditions. After the surgery, when the time came to settle the bill, we were surprised to discover that we had to cover the expenses initially. Later, the health insurance provider would reimburse the amount to our account after a predefined period. In essence, we were required to keep records of every bill and invoice, complete the insurance form, submit the pertinent documents, and await the insurer's confirmation with the hospital administration. This situation imposed a sudden financial and documentation burden.
Imagine finding yourself in the midst of a medical crisis, needing to secure immediate funds for hospitalisation, surgery, room charges, etc, despite having a health insurance plan in place. This unexpected financial strain forced us to dip into our savings, which was precisely what we intended to avoid while obtaining the policy.
At that point, we were advised that opting for the cashless claim option would have been a better choice.
Health insurance serves to shield you from the financial burden of unexpected medical expenses, but navigating the claims process can be quite complex. When you file a health insurance claim, one of the important decisions you must make is whether to select a cashless medical card or a reimbursement approach. While both options assist in covering medical costs, they exhibit substantial differences.
Understanding Reimbursement Claim Settlement In Health Insurance:
Reimbursement health insurance claims involve a system where you pay for the medical treatment initially and then seek reimbursement from your insurance company.
Health insurance policyholders have the choice of both cashless and reimbursement claims, but reimbursement may be the only option in specific scenarios, including:
· When the treatment is not covered under the health insurance plan (eg specific pre-existing conditions, genetic disorders, chronic ailments, and permanent exclusions), but the follow-up procedure is covered
· In cases involving non-network healthcare facilities
· When the claim is filed beyond the specified timeframes (24 hours for emergency treatments and 72 hours for scheduled treatments)
What are the benefits of Reimbursement Claim Settlement in Health Insurance?
The health insurer directly reimburses the claimed amount to the policyholder, with minimal involvement from the healthcare facility where the treatment was received. Consequently, whether you seek care at a network hospital or a non-network one, it does not impact your access to this advantage.
What are the drawbacks of Reimbursement Claim Settlement in Health Insurance?
· Prolonged processing time for claims: The Reimbursement Claim Settlement process is quite time-consuming, involving multiple document submissions, claim approval, and the verification of each document. Furthermore, as the payment has already been settled with the hospital, insurance providers are not under pressure to promptly reimburse the amount.
· Temporary but significant financial burden: Although it is true that with a reputable health insurance provider, the amount claimed and paid out of the policyholder's pocket is eventually reimbursed, there is still a financial inconvenience. Consider being in a dire medical situation, having to arrange immediate funds for hospitalisation, surgery, room charges, and more, despite having a health insurance plan in place.
Understanding Cashless Claim Settlement In Health Insurance:
A cashless claim is a method in health insurance that permits you to receive treatment at a network hospital without using your own funds. Instead, the hospital bills are sent directly to the insurer and are settled by them.
To initiate this process, simply visit one of your insurer's network hospitals, present your health e-card and identification proof. It is important to note that you must obtain approval for your claim from your health insurer. For planned hospitalisation, this should be done at least 72 hours in advance, or within 24 hours in the case of a medical emergency. That's all there is to it. The insurer will handle your claims.
The entire cost is promptly covered by the health insurance provider, with certain exceptions:
· If the policy includes a co-payment clause
· If the plan involves restrictions on room rent and type, and the policyholder exceeds these limits
· If the invoice surpasses the provided health insurance coverage
What are the advantages of Cashless Claim Settlement in Health Insurance?
· Effortless claim settlement process: Cashless claims are typically resolved within hours or a few days, with minimal involvement from the policyholder, making it a straightforward, time-saving, and hassle-free process.
· Financial convenience: As policyholders don't need to spend their own money, the cashless claim settlement process is an enticing option that aligns with their incentive for securing a health insurance policy.
What are the disadvantages of Cashless Claim Settlement in Health Insurance?
- Limited to network hospitals: Cashless claims are exclusively available at network hospitals, which can restrict access to this financial benefit, especially during unforeseen medical emergencies.
Key Differences between Cashless and Reimbursement Claims:
1. Payment Process:
• Cashless: The insurance company directly settles the medical bills with the network hospital.
• Reimbursement: You pay for the medical expenses initially and then get reimbursed by the insurance company.
2. Hospital Choice:
• Cashless: Limited to network hospitals.
• Reimbursement: You can choose any hospital.
3. Pre-Authorisation:
• Cashless: Requires pre-authorisation for planned treatments.
• Reimbursement: No pre-authorisation required.
4. Out-of-Pocket Expenses:
• Cashless: Generally, minimal out-of-pocket expenses.
Reimbursement: You initially pay all expenses and then seek reimbursement.
Now that you’ve understood the benefits and drawbacks of each of these claims in detail, you’ll be able to make a smart, informed policy choice after consultation with your family members and health insurance provider.
