Health insurance benefits can be availed in either of two ways i.e. Cashless hospitalization
facility or Reimbursement. In case of cashless facility, the policy holder can take treatment
at a network hospital and walk out of the hospital without paying anything whereas,
in reimbursement, the policy holder will have to pay the hospital bill from his pocket and get
it reimbursed later by the insurance company.
These days, insurance companies have TPAs (Third Party Administrator), which act as a common link
between the insurance company and policy holder. TPAs coordinate with the hospital authorities to
ensure smooth settlement of the treatment bill.
However, there are some pros and cons which should be kept in mind while opting for cashless
Emergency funds for medical needs
Expensive home loans, children’s school fees and rising cost of living might impact your savings
in a big way. Cashless hospitalization facility is a boon in such situations as it keeps you
mentally relaxed and you can handle a medical emergency without much of hassle. This facility
reduces the need to keep funds aside for medical emergency and enables to get good treatment at
Surgeries and illness covered in the policy
You should read the terms and conditions of the policy and be well informed about the illness
and surgeries covered by the policy. This ensures that in times of getting a treatment or surgery
done, if it is covered, you can plan accordingly, get required approvals before getting admitted
in the hospital.
Mandatory to opt for network hospital
All insurance companies have tie up with various hospitals in India. The list of such hospitals
is network hospitals. For the purpose of availing cashless hospitalization facility, you should
choose a hospital which is in the list of network hospital of the insurance company. The insurance
company provides you and the family members insured under the policy a health card. This health
card is to be carried with you at the time of admission.
If you choose a non-network hospital, you will have to pay the hospital bill upfront and then get
it reimbursed by the insurance company. Generally, the bill can be reimbursed within 30 days of
Increase in Premiums
Many a times, the policy holder, holding a cashless policy, prefers treatment at a good hospital
which can be expensive as he doesn’t have to shell out money from his pockets. The insurer assesses
the treatments charges and if it seems to be at a higher side, they tend to increase the premium.
Process of claim settlement
The policy holder carries the health card with himself at the time of admission. Once the
hospital receives the health card of the patient, it gets the pre-authorization form filled
in and faxes it to the TPA (i.e. the third party administrator). The hospital informs about
the treatment required for the patient and the estimated cost of the treatment. In return,
the TPA provides approval of the estimated cost to the hospital.
In case of planned hospitalization, you can select the network hospital in which you want to
avail treatment, fill in the pre-authorization form and send it to the TPA at least 4 days
before the planned surgery or treatment. The TPA will then approve it or reject it if the policy
does not cover the illness. In case of emergency, the TPA approves the pre-authorization form
in a maximum of 6 hours.
Time consuming discharge process
Discharge process in case of cashless facility takes more time as compared to reimbursement
policy. This is because the TPA approves the bill amount after thorough checking of all bills
related to hospitalization submitted to them.