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 hospitalization facility.PROS:
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 network hospitals.
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 discharge.CONS:
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.