How Health Insurance Works?
The importance of health insurance can never be overemphasised. The pandemic has underlined this fact. Thankfully, the awareness about medical insurance is increasing.
Even as the awareness is spreading fast, many are not sure how health insurance works, even after buying a medical insurance policy,
The terminology surrounding health insurance products often intimidates most of us. For the same reason, many are unable to fully claim the benefits of the medical insurance policy. Here, we simplify the terminology and the process for you to understand how does health insurance work .
Know your policy
First and foremost, you should know the two basic details about your policy – sum insured and coverage. You can get this information from your policy document.
Sum insured is the maximum amount you are entitled to receive in a particular year for the medical expenses you incurred. If you want a bigger sum insured, you need to pay a higher premium.
Coverage, on the other hand, refers to the specific expenses that would be covered by your health insurance policy. This includes different types of diseases and illnesses and the kind of expenses that would be taken care of, such as, hospital accommodation, preand posthospitalisation expenses, consultation fees, medication, etc.
Always take note of the exclusions in your medical insurance policy, i.e., the expenses that won’t be covered under the plan. Remember, you have to pay from your own pocket for such expenses.
Also, check whether you have an individual policy or a family floater plan. Individual health plans cover the policyholder only, while family floater plans cover all immediate family members named in the policy. This means that the sum insured can be utilised by any one member or all the members, in part or in full.
How to make claims?
Raising a claim means informing the insurance company about the medical expenses you incurred and asking for reimbursement.
There are mainly two types of claims – cashless claims and reimbursements.
Cashless claims: As the name suggests, cashless claims mean there is no cash compensation. Here, the insurance company pays the hospital directly without your involvement, whatsoever. All you need to do is submit a health insurance policy claim form at the hospital. You would not need to pay a single penny if all your expenses are adequately covered by your policy. All the bills and paperwork would be handled by the hospital and the TPA (third party administrator).
One rider here is that you are eligible for cashless hospitalisation only if the hospital you have chosen is a part of the insurer’s network of hospitals. Insurance companies have arrangements with a wide network of hospitals to provide the cashless hospitalisation facility.
Reimbursements: In case your hospital is not a part of the insurer’s network of hospitals, you would have to first pay all the hospital bills and expenses from your pocket. You can later claim reimbursement from your insurance company.
You can submit a claims form along with all the medical bills and hospital certificates. Your insurance company will then examine your documents and bills and check the clauses of your policy to calculate the reimbursement. On approval of your claim, the reimbursement amount will be released through a cheque or via direct bank account transfer.
Co-pay and deductibles
Before raising the claim, check whether your policy has any co-pay or deductibles clause.
Co-pay in health insurance refers to the percentage of the claim amount that the insured person will pay from his own pocket, while the insurer will pay the rest of the amount. For example, if you have a 10% co-payment clause in your policy and your claim amount is Rs. 1 lakh, you would need to pay Rs. 10,000, while Rs. 90,000 will come from the insurance company.
Deductibles, meanwhile, refer to the amount you pay for healthcare services before your health insurer begins to pay. Suppose your policy contains a clause stating that the deductible amount is Rs. 20,000, then, of the Rs. 1 lakh of your medical bill, you will first have to pay Rs. 20,000 from your pocket to get the remaining Rs. 80,000 from your insurer.
If you know all these basic details and clauses about your mediclaim policy, raising a health insurance claim with your insurer would be a smooth and hassle-free process. And you would never have to think twice before claiming your due benefits.
Disclaimer: The above information is indicative in nature. For more details on the risk factor, terms and conditions, please refer to the Sales Brochure and Policy Wordings carefully before concluding a sale.