What is Cashless Health Insurance?

Cashless health insurance is a facility under which an insurance company pays all the hospital expenses of a policyholder (as per certain terms and conditions) when they take treatment from a network hospital of the company.

The biggest benefit of this facility is that you don’t have to pay your medical bills out of your pocket, which may be a lot in certain cases. 

However, it is important to pay attention to some things for making a claim, which are mentioned below in this article.

(Read more: Why mediclaim policy is better than medical loan)

  1. Types of cashless health insurance
  2. Objective of cashless health insurance
  3. Procedure for making a claim in cashless health insurance
  4. Why is it important to have cashless health insurance
  5. Reasons for rejection of cashless claim
  6. Features of cashless health insurance
  7. Advantages of cashless health insurance
  8. Things to consider before taking a cashless health insurance policy

Broadly, there are three types of cashless health insurance:

Cashless Individual Health Insurance: Under this, only the person taking the insurance has the right to claim cashless facility as per the terms and conditions of his/her health policy.

Cashless Family Health Insurance: Under this, the insured can cover all the members of his/her family in a single-family health plan or family floater. As a result, any member of the family can take advantage of the cashless facility when needed.

(Read more: Family floater health insurance)

Cashless Health Insurance for Senior Citizens: This cashless health insurance plan offers covers that are specially designed for senior citizens. It covers various things like ambulance fees, hospitalization expenses and pre-existing diseases. Apart from this, senior citizens cashless health insurance also offers tax exemption under section 80D of the Income Tax Act. Under this exemption, the premium amount deposited every year is tax-free in every financial year.

(Read more: Difference between health insurance and life insurance)

Cashless health insurance helps avoid the trouble of cash payment in hospitals at the time of need. When you take treatment at one of the network hospitals of your insurance company, the latter collaborates with the hospital to settle your claims so the medical bills do not affect your pocket. However, you will only get an amount equal to your sum insured or as per the terms of your policy. 

Understand this with an example - Suppose you have taken sum-insured health insurance of 10 lakhs and that includes cashless service. In such a situation, when you are admitted to a network hospital due to any medical condition or emergency or medical expenses, then the insurance company will pay on your behalf up to an amount equal to the sum insured, but if the hospital bill exceeds 10 lakhs you may have to pay the extra amount out of your pocket.

After taking myUpchar Insurance Plus policy, you get the facility of cashless treatment in more than 7000 network hospitals. 

(Read more: Best cashless mediclaim policy in India)

Cashless health insurance can be easily availed in the following way:

  • When an insured (who has taken health insurance) comes across a medical emergency/condition, he/she needs to be admitted to a network hospital to avail the insurance benefits. 
  • At the hospital, the insured or any member of his/her family has to go to the insurance desk and give the health information of the patient to the third-party administrator (TPA). 
  • The TPA will also ask for the policy card (which is available immediately after taking the policy) and pre-authorization form, which he/she will scrutinize to determine its authenticity and eligibility. 
  • After this, the hospital will give the patient information to the insurance company through fax or any other means.
  • Next, the insurance company will verify the documents and will give approval for the cashless facility by informing the hospital.

In case of planned hospital admission, say when you are getting treatment for a disease and your doctor has suggested you get admitted for extra care, you may have to inform the TPA a day or two in advance. However, in cases of emergency, the TPA should be informed within 24 hours of your admission. Read your policy bond to get an accurate idea of ​​how much time you actually have to inform your TPA in various conditions.

(Read more: What does health insurance cover)

Planned claim for cashless health insurance

When you go for hospitalization with full planning, you have some time to make arrangements. Here's what you need to do before claiming for cashless health insurance for planned hospitalisation:

  • Read your cashless health insurance policy properly or call the customer care service of the insurance company to know the list of network hospitals.
  • You have to fill the preauthorization form from the network hospital from where you want treatment. This form can be downloaded from the insurance desk of the hospital as well as from the TPA website. Make sure that you provide accurate information in the form.
  • Once you submit the form, the hospital authorities will evaluate the authenticity of the information you filled in it and send it to your insurance company.
  • If your application is accepted, the TPA will send the preauthorization form back to your chosen hospital. 

(Read more: Why is critical illness insurance important)

Emergency claim for cashless health insurance

In case of emergency, show your policy card to the hospital official at one of the network hospitals and complete the claim process, including filling and submitting a pre-authorization form, at the earliest. 

However, you may not have enough time to make a cashless claim in emergency cases. In such a situation, a reimbursement can be obtained from the insurance company later. Make sure to keep all your hospital bills and documents ready for making a claim for reimbursement.

(Read more: Top-up health insurance)

This facility proves to be very effective in situations where you do not have cash money or have less cash than required. In fact, the cashless health insurance service has been designed to avoid the hassle of cash payments. 

You just have to ensure that you get treatment at a hospital that comes under the network of your health insurance company. If you want to know about Network Hospital, read the policy bond or visit the website of the insurance company.

(Read more: Which is the best health insurance policy and company)

A cashless facility does not solve all your problems related to cash payment of medical bills unless you ensure that you make the claim properly and according to the terms and conditions of the insurance company. Your cashless claim may be rejected for many reasons:

Lack of correct or complete information: As mentioned above, you can claim for cashless facility before or soon after being admitted to a network hospital of your insurance company. However, to avail the facility, you have to fill a form - available at the hospital desk. Make sure that you fill the form correctly and don’t miss out on anything. 

If the form is not complete or the insurance company gets wrong or incomplete information, either or on your part or due to some miscommunication with the hospital, then your claim may get stuck for some time or may even be cancelled. That is why customers are advised to read the policy and apply along with relevant documents while taking the policy for making cashless health claims.

Late Claiming: It is really important that all your information (needed to get the claim) reaches your insurance company on time. Make sure to ask your insurance agent or company about the time limit for making a claim or check your policy. If you do not claim in time, your application may get rejected.

Concealment of pre-existing diseases: Generally, health insurance does not cover pre-existing diseases. Though, some may after a certain amount of time has passed. Make sure to inform your insurance company about any pre-existing diseases when you take the policy. A disease or medical condition pre-existing 48 months from the day you take the health insurance policy is treated as pre-existing.

Exclusion Condition: Specific conditions or diseases for which the health insurance company does not provide financial (money linked) coverage are called exclusions. So, if you are making a cashless claim for any disease or medical condition that is outside the coverage of your health insurance plan, then your claim will be cancelled.

Forget to renew your health insurance policy: ​Generally, a health insurance policy is valid for one year, you need to renew the policy as soon as the year is nearing completion. Now suppose you miss renewal due to some reason and claim for cashless facility during this time, then the insurance company will reject your claim. Therefore, it is very important to check the important dates associated with the health insurance policy and renew the policy in time.

Features of cashless health insurance policies may differ in various insurance companies. However, the following features can be seen in most the cashless health insurance plans:

  • There is no bill to be paid in any network hospital.
  • All pre and post hospitalization expenses are covered.
  • No Claim Bonus (NCB): A person who has taken health insurance but has not made any claim during the policy term, can be given a discount or any other kind of benefit on premiums received by the insurance company.
  • Covering expenses related to hospitalization for more than 24 hours
  • Receive hospital cash for the number of days admitted in the hospital (if rider is taken)
  • Covering ambulance charges, at-home treatments, organ transplants, etc.

(Read more: What is not covered in health insurance?)

Following are some of the advantages of cashless health insurance:

Help in Medical Emergency: The emergency services of a hospital may be too expensive to cover from your pocket. It is also likely that you may get short of money pretty quickly. Cashless claim can prove to be extremely beneficial in this situation, as it does not require the patient's family to make any arrangements for settlement of hospital expenses and also saves time so that they can focus on the patient.

Quick Remedy: Cashless health insurance policy assures that you will not get into financial troubles due to a health condition. You can get admitted to the hospital without any delay and start the necessary treatment.

Medical Expenses Cover: Cashless health insurance policies usually include comprehensive coverage of pre and post hospitalization expenses, ambulance expenses, inpatient care, treatment at home, etc. Some cashless health insurance plans may also offer regular health checkups and diagnostic tests.

(Read more: Which is the cheapest health insurance)

Apart from all its benefits, cashless health insurance policy also has certain limitations. The following are some things you need to consider before taking a cashless health policy:

  • You can only avail cashless facility at a network hospital of the insurance company.
  • Your cashless claim is liable to be rejected by the TPA, so ensure that the information provided in the pre-authorization form is correct.
  • Usually, in cashless health insurance, equipment expenses like ambulance charges, oxygen masks, and nebulizers are not covered. Apart from this, documentation charges and service charges are not included in the policy.
  • Ensure that you read and understand the policy completely before you buy it so that you can know how ready you are for its terms and conditions.
  • Keep a copy of all hospital documents and bills with you.
  • If the sum insured expires, you will have to pay any extra expense out of your own pocket.
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