Types of Health Insurance Claims You Must Know About

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When it comes to securing our health and well-being, health insurance plays a vital role. It provides financial coverage for medical expenses, giving us peace of mind during times of illness or injury. Understanding the different types of health insurance claims is essential for policyholders to make informed decisions and maximise their benefits. In this guide, let’s explore the various types of health insurance claims individuals should be aware of.

What are cashless health insurance claims?

Cashless claims are a type of health insurance claim that allows policyholders to receive medical treatment without making upfront payments at network hospitals. The insurer directly settles the bills with the healthcare provider, subject to policy terms and conditions.

How do cashless claims work?

Suppose Mr Kumar holds a health insurance policy with XYZ Health Insurance and falls ill, requiring hospitalisation. He opts for treatment at a network hospital having a tie-up with XYZ Health Insurance. Here is how the cashless health insurance claim process would work for Mr Kumar:

• Hospital selection: Mr Kumar selects a network hospital affiliated with XYZ Health Insurance for his treatment. If your policy is with ICICI Lombard, you can select any hospital for your cashless treatment with 24 hrs prior notice.
• Pre-authorisation request: Before undergoing any medical procedures, Mr Kumar or the hospital contacts XYZ Health Insurance to request pre-authorisation for the treatment. They share necessary details such as the nature of the illness, proposed treatment, and estimated costs.
• Claim assessment: XYZ Health Insurance reviews the pre-authorisation request and verifies Mr Kumar’s policy coverage. They assess the treatment’s necessity and appropriateness as per policy guidelines.
• Pre-authorisation approval: The insurer approves the cashless claim request and issues a pre-authorisation letter to the hospital upon successful verification. This letter confirms that the insurer will cover the eligible expenses.
• Cashless treatment: Mr Kumar receives the required medical treatment without paying any upfront expenses.
• Settlement of bills: After the hospital concludes the treatment, XYZ Health Insurance receives the medical bills and verifies them in accordance with the pre-authorisation norms and guidelines. XYZ Health Insurance then settles the approved expenses directly with the hospital, adhering to the terms and conditions of the policy.

Pros of Cashless Claims

• Convenience: Cashless claims offer a hassle-free experience as policyholders can avail of medical treatment without making upfront payments.
• Financial relief: It provides immediate financial relief, especially in emergencies, as policyholders do not need to arrange funds for medical expenses.
• Streamlined process: The cashless claim process is usually faster and more streamlined, as policyholders do not have to go through the reimbursement process and wait for the reimbursement amount.

Cons of Cashless Claims

• Limited network: Policyholders utilising cashless claims are limited to network hospitals or healthcare providers affiliated with the insurance company, thereby restricting their choices. This may result in treatments sought at non-network hospitals not being covered.
• Potential denial of claims: Policyholders opting for cashless claims may face the risk of claim denial if the policy does not cover the treatment or hospital or if there are discrepancies in the pre-authorisation process.
• Dependency on network hospitals: A policyholder may need to compromise on his/her preferred healthcare provider or hospital if the insurer does not have a tie-up with the healthcare establishment. Hence a policyholder cannot opt for a healthcare institution outside the network hospitals of the insurance company.

What are reimbursement claims?

Reimbursement claims refer to a type of health insurance claim where the policyholder pays for the medical expenses upfront and later seeks reimbursement from the insurance company.

How does a reimbursement claim work?

Suppose Mr Sharma, a policyholder of ABC Health Insurance, falls ill and requires emergency medical treatment (in less than 24 hours). He visits a hospital and gets admitted. Mr Sharma pays for his medical expenses out of pocket. Once his treatment gets completed, he gathers all the relevant medical bills, prescriptions, and reports. He submits these documents with a duly filled reimbursement claim form to ABC Health Insurance.

The insurance company reviews the documents to ensure they meet the policy’s terms and conditions. The insurer evaluates the medical expenses and determines the eligible amount for reimbursement based on the policy coverage.

Once the reimbursement claim is approved, ABC Health Insurance processes the claim and disburses the approved amount to Mr Sharma’s bank account.

Pros of Reimbursement Claims

• Flexibility of choice: Reimbursement claims allow policyholders to choose healthcare providers for emergencies, as they are not limited to network hospitals or other healthcare facilities provided by the insurer.
• Coverage for non-network hospitals: Reimbursement claims provide emergency coverage even for treatments sought at hospitals or from healthcare providers who do not have a tie-up with the insurance company.
• Control over expenses: With reimbursement claims, individuals have control over the expenses incurred as they pay upfront and then claim for reimbursement. This allows them to make choices based on their budget and healthcare preferences.

Cons of Reimbursement Claims

• Upfront payment: Policyholders have to bear the financial burden initially and wait for reimbursement from the insurance company. This can cause financial strain, especially in cases of high-cost treatments.
• Documentation and processing time: Reimbursement claims require thorough documentation, including medical bills, prescriptions, and reports. The claim processing time may also be longer as the insurance company verifies the submitted documents before reimbursing the amount.

Conclusion

In summary, reimbursement claims provide flexibility and control over expenses but require upfront payment and longer processing time. On the other hand, cashless health insurance claims offer convenience and immediate financial relief but limit choices to network hospitals and may face potential claim denials. Understanding these pros and cons can help individuals select the type of health insurance claim that aligns with their preferences and requirements.