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Cashless health insurance

It takes just one medical emergency to make us realise how unpredictable life is, both financially as well as emotionally. A single hospitalisation can wipe out your entire lifelong savings. That is exactly where having a health insurance policy can help you out by bearing either all or at least most of such medical expenses.

However, even after buying health insurance, you may still have to first pay the medical expenses out of your own pocket and then reimburse that from the insurer. ...Read More

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Cashless health insurance

Cashless Health Insurance Policy in India

Cashless health insurance
October 09, 2024

Table of Content

 

What Is Cashless Health Insurance?

A cashless health insurance plan is one in which the insurer company pays for your medical expenses, such as hospitalisation charges, ambulance charges, etc., to the hospital directly. As its name suggests, it is a kind of claim procedure that you can choose instead of the reimbursement process, especially if you wish to preserve your financial liquidity by not paying the hospital bill yourself directly from your pocket. Through cashless claims, the insurer would pay and settle the bill directly with the hospital, without you needing to dig your pocket, provided you are eligible for the cashless claim benefits.

How Does Cashless Health Insurance Policy Work?

As its name suggests, cashless health insurance removes the stress of making payments to the hospital through your own pocket, as the policy's cashless feature ensures that you, as a policyholder, need not pay the big hospital bill yourself.

But how does that happen? Well, the insurance company directly negotiates with the network hospital to cover your treatment cost and pay for it directly to the hospital without the need for you to pay the bill. The insurers have tie-ups with such network hospitals, which is why they have contact with them and settle the bill payments with them either directly or through coordination by their TPA (third-party administrator).

And that's not all. Nowadays, many health insurers are also offering cashless OPD facilities, wherein patients who need not be hospitalised for more than 24 hours can avail of cashless hospitalisation facilities.

Why Cashless Health Insurance is Important

Having a cashless health insurance policy can turn out to be beneficial in many ways, especially during medical emergencies wherein huge hospitalisation bills can financially disturb you by pushing you to make last-minute attempts to fund the big bill.

But with a cashless health insurance policy in place, you need not worry about all this, as the insurer will directly settle the bill with the hospital.

Here are some key benefits of buying a cashless health insurance for yourself and your family:

  • Convenience

The biggest benefit of purchasing cashless medical insurance is the convenience that it offers to the policyholder. With the cashless facility, you do not have to worry about the big hospitalisation bill payments or reimbursements. The insurer settles the bill directly with the network hospital.

  • Preferred Hospitals

Another benefit of purchasing health insurance with cashless coverage is that you gain access to any of your preferred hospitals, which can either be a network or a non-network hospital too as per your health condition, you can choose to get treated in any of your preferred hospitals, after factoring in its proximity to your residence, available faculty of doctors, infrastructure, etc. This prevents you from being forced to get treated at a particular hospital that falls into the network list of the insurer.

  • Quality Health Care

Buying a cashless health insurance policy also opens the door for you to avail yourself of good quality healthcare without exhausting your precious savings. This ensures you do not compromise on your healthcare due to expensive medical treatment. The cashless feature of health insurance policies provides you with the facility to give your healthcare the highest priority without thinking about the cost.

  • No Complicated Medical Billing

Last but not least, having a cashless hospitalisation and bill payment process saves you from the hassle of settling the big and complicated medical bills with the hospital. The tedious tasks, such as documentation, discharge formalities, bill settlement, etc, are taken care of by the insurer, as it directly coordinates with the hospital. This leaves you with more time to be stress-free and focus on recovery.

Types of Cashless Health Insurance Plans

 

Before buying a cashless health insurance plan, it’s important to understand the different types of policies available, that offer cashless coverage.

1. Cashless Coverage with Individual Health Insurance

This type of health insurance policy provides cashless coverage to one individual, i.e., a single policyholder.

2. Family Cashless Health Insurance

This type of health insurance policy provides cashless coverage to a whole family, including the policyholder, parents, spouse, and kids.

3. Cashless Coverage for Critical Illness Insurance

This type of health insurance policy offers cashless coverage for the treatment of critical illnesses like cancer, heart attack, etc. Such policies usually offer a lump sum payment upon the diagnosis of a critical illness.

4. Health Insurance for Senior Citizens with Cashless Coverage

This type of health insurance policy provides cashless coverage for medical expenses of senior citizens, i.e., those who are aged 60 years and above.

5. Cashless Maternity Health Insurance

This type of health insurance policy offers cashless coverage for maternity and other pregnancy-related expenses for individuals who plan to have kids in the near future.

Things to Consider Before Buying Cashless Health Insurance

Before you purchase a cashless health insurance policy, here are some crucial points to keep in mind:

✓Cashless coverage and hospitalisation are generally available at network hospitals only.

✓It is the hospital’s responsibility to adequately and timely provide a justification for the treatment the patient is undergoing.

✓Keep in mind that a photocopy of all documents, including lab reports, medical bills, claim forms, discharge papers, etc, is required before leaving the hospital.

✓ Cashless insurance claims can be rejected by TPA if you fail to provide complete information that is required in the pre-authorisation form.

✓Do not miss out on carefully reading all the minute details of the cashless health insurance policy, such as terms and conditions. Failing to do so can make you ineligible to avail cashless hospitality and other coverages when needed.

✓If your claim amount exceeds the cashless sum insured, then you would likely have to pay the excess amount.

✓Note that not all medical expenses are necessarily covered under cashless health insurance, so make sure you know which ones are covered and which aren't.

Documents Required for Cashless Hospitalization

When you are planning to opt for cashless coverage from your health insurance policy in India, do not miss out on this important list of documents that you would need to have in place.

1. Health Insurance Card or Policy Details:

If you have a health insurance card, then keep it handy. If not, then make sure to have a copy of your policy document so that you have access to details such as the policy number, assured sum amount, contact information of the insurer, etc.

2. ID Proof:

Another vital document you must have, is a valid government-issued ID proof, such as an Aadhar card, voter ID, passport, or driving license. These documents help the hospital do verification about your identity.

3. Doctor's Prescription:

Make sure you also have the doctor's prescription, which clearly mentions and recommends that you need hospitalisation.

4. Hospital Pre-Authorisation Form:

This crucial form is provided by the insurance company, which you need to fill out with the necessary details, and then get this form signed by your treating doctor.

5. Medical Reports and History:

If you have any previous medical records, lab reports, test results, or other treatment history which is relevant to your current treatment, then keep that handy too. This would help the hospital as well as the insurance provider to accurately understand your medical condition.

6. Hospital Admission Form:

Make sure you provide all the necessary information and medical details when filling out the hospital's admission form.

7. Claim Form:

You would need to fill out a claim form for your cashless health insurance. This form is generally available at the hospital, but it may also be available for download on your insurer's online website.

8. Emergency Contact Details:

Another vital piece of information that hospitals are likely to require is the list of your emergency contact numbers and also the names of family members or friends.

9. Cashless Health Card (if provided):

Some insurers prefer to issue a cashless health card to the policyholder. So, if you have such a card, it is better to carry it for smooth claim processing.

10. Any Other Specific Forms:

Depending on your hospital and insurance provider, there might be some more forms or documents that might be required. It is wise to check with both of them in advance and accordingly keep the required documents/forms handy.

Reasons Your Cashless Health Insurance Might Be Denied

It's true that having a cashless health insurance policy eases the financial burden of big hospitalisation expenses. However, there can be certain reasons due to which your cashless coverage claim can get rejected.

  • Insufficient Documentation: One of the most common and major reasons for claim rejection is the failure to provide all the documents, including medical records, lab reports, tests, bills, and any other document requested by your insurance company.
  • Pre-existing Conditions: Claims pertaining to pre-existing medical conditions can get rejected if you have not timely and honestly declared the information during the policy's application.  
  • Waiting Period Violation: Most health insurance policies have a particular waiting period, such as 2 years or 3 years, for certain conditions. If you file a claim for that condition during the waiting period, it's most likely to get rejected.
  • Non-disclosure of Information: If you try to hide any relevant health-related information or fail to provide accurate details about your history as well as present health, your claim is likely to be rejected.
  • Policy Exclusions: Many health insurance policies have a list of certain exclusions, such as cosmetic surgeries. Claims filed for such exclusions would be rejected.
  • Incorrect Information: Any kind of misinformation or errors found in your claim form can end up in rejection of your claim. Make sure to double-check each and every detail before filing the claim.
  • Policy Lapses: In case your policy has lapsed due to failure to make premium payments, then any claims made during that period would get rejected. A lapsed policy would not accept any of your claims.
  • Inadequate Justification for Treatment: If you are unable to provide valid medical reasons and documents that indicate that the treatment or procedure for which you are filing a claim is necessary, then your claim can be rejected.

How to Use Cashless Hospitalisation

There are two ways through which you can use a cashless hospitalisation facility:

✓Scheduled Hospitalisation

Knowing that you have to be hospitalised in the next few days ahead is known as planned hospitalisation. Here, you have to choose a network hospital with cashless capabilities. Should a planned hospitalisation be arranged, follow these rules to seek cashless hospitalisation:

  • Use the toll-free number of the insurance company to learn about the nearby network hospital.
  • Once you have chosen the one, take your policy card to the network hospital and ask for a pre-authorisation form.
  • Either choose one from the insurance desk in the hospital or download this form from the insurer's website.
  • Send your form to the insurance desk; their close inspection will ensure its authenticity.
  • The form will then be faxed to the TPA for handling and either approved or denied.
  • TPA will write an authorisation letter detailing the authorised treatment sanction level should your pre-authorisation request be approved.

✓Urgent Hospitalisation

Regarding emergency hospitalisation, you should start the cashless mediclaim facility 24 hours before hospitalisation since you require immediate medical attention. Here is how one can use cashless hospitalisation:

  • Show your health insurance card to the network hospital; it will include your policy number, insurance company name, and type of health policy you have.
  • Complete the pre-authorisation form, and the individual working at the insurance desk will expedite your claim process.
  • If you must wait for TPA approval, though, you can pay hospital bills and subsequently have them reimbursed by your insurance company.

Under emergency protocols, a TPA should handle an emergency hospitalisation claim ideally within a few hours.

What’s Covered by Cashless Health Insurance?

Keep in mind that all health insurance policies have a list of certain inclusions and exclusions. Claims filed for inclusions are likely to be accepted, whereas those filed for exclusions would be rejected.

Here's a list of what is generally covered under cashless health insurance:

✓ Hospitalisation:

In case you need hospitalisation for your treatment, cashless health insurance can help cover the costs of medical tests, rooms, medicines, etc.

✓Doctor’s Fees:

A cashless health insurance policy also covers the fees of doctors who are treating you during your hospitalisation. You need to only focus on your recovery and not stress about the medical costs.

✓Surgeries:

Irrespective of whether it's a small or big surgery, your cashless health insurance will cover its expenses, thus ensuring that you receive the best quality of treatment without dipping into your savings.

✓Medicines:

All the costs of medicines prescribed by your doctor during hospitalisation are also covered under cashless health insurance.

✓Diagnostic Tests:

Whatever important tests are ordered by your doctor to help diagnose your illness would be covered under the policy. This is irrespective of how costly they may be.

✓Pre and Post-Hospitalisation:

Some of the cashless health insurance plans offer coverage of expenses related to your health both before and after hospitalisation, such as tests, consultations, medicines, etc.

✓Day Care Procedures:

Cashless health insurance policies also cover daycare procedures, even if you don’t require a stay at the hospital overnight.

✓Ambulance Costs:

If you require an ambulance to quickly reach the hospital, such expenses are often covered by cashless health insurance policies.

What’s Not Covered by Cashless Health Insurance?

Here's the list of what generally gets excluded and is not covered under cashless health insurance:

1. Pre-existing Conditions:

In case you previously had a health issue before you purchased the insurance, treatment for those issues might not be covered under cashless insurance immediately but might get covered after a waiting period.

2. Waiting Period:

For most policies, there is a waiting period at the beginning of the insurance plan, such as 1 year or 2 years, during which certain medical conditions do not get covered.

3. Non-Medical Expenses:

Your cashless health insurance usually covers medical expenses such as doctor consultations, surgeries, hospitalisation, and medicines. But when it comes to non-medical expenses like beauty treatments, cosmetic surgeries, etc., they are usually not covered.

4. Alternative Therapies:

Some health insurance policies may not cover alternative therapies or treatments such as acupuncture and naturopathy.

5. Regular Health Checks and Vaccines:

Regular check-ups, preventive treatments, vaccinations, etc. are also included. These are some of the expenses not covered under cashless insurance because they are considered routine check-ups which are carried out for health maintenance.

6. Pregnancy and Fertility Treatments:

Some of the basic health insurance policies might not cover the costs of pregnancy and fertility-related expenses and treatments, for which you might need a specific policy.

7. Mental Health:

Even though the importance of mental health is gaining prominence gradually, some cashless health insurance policies may still not fully cover mental health treatments or may have limited coverage.

8. Dental and Eye Treatments:

Many cashless health insurance policies do not cover expenses of routine dental check-ups, eyeglasses, braces, etc. unless you have included an add-on for such expenses in your plan.

9. Injuries from Hazardous Activities:

Policies may often not cover injuries resulting from hazardous activities or extreme sports.

10. Unproven or Experimental Treatments:

In case your treatment is considered either experimental or not widely acceptable, it might be excluded from your cashless insurance policy’s coverage.

Common Reasons for Claim Rejection in Cashless Mediclaim

Here are some of the common reasons due to which your cashless mediclaim may get rejected:

  • In case you did not inform your insurance provider about the hospitalisation within the decided timeframe, such as a few hours.
  • If you availed treatment in a hospital that does not meet your policy’s requirements and guidelines.
  • In case the treatment is not permissible under the cashless health insurance policy terms.
  • If you provided incorrect information about a pre-existing disease and/or personal information at the time of buying the policy.
  • In case the treatment is outside the cashless health insurance policy’s coverage, such as exclusions like cosmetic surgery.
  • If the limit of the sum insured is already exhausted.

Cashless Claim vs. Reimbursement Claim: What’s the Difference?

Here’s a table to help you understand the difference between a cashless claim and a reimbursement claim:

Aspect

Cashless Claim

Reimbursement Claim

Definition

The insurer directly pays the bill to the hospital. You, as a policyholder, either need to pay nothing or a very small portion.

You, as a policyholder, have to pay the full amount to the hospital and then later get reimbursement from your insurance company.

Payment Process

The insurer directly settles the bill with the hospital.

You have to pay the bill to the hospital first, and then get the paid money back as reimbursement.

Approval Process

Pre-approved treatments from hospitals make it a quick and streamlined process.

You need to submit bills to the insurer for approval after the treatment.

Cash Involvement

Minimal involvement of cash, that too only if you need to pay a small portion of the bill or are the co-payer.

You pay the entire bill initially and then get it reimbursed later.

Ease of Process

Quick, convenient, and hassle-free during medical emergencies.

Requires more paperwork and patience due to the reimbursement claim process.

Documentation

Only basic documentation is usually required for pre-approval.

Detailed documents and bills are required to claim reimbursement.

Timing

Fast process, as the insurance company directly deals with the hospital.

Slightly slower process, as you need to wait longer for the reimbursement amount to be given back to you.

 

Summary

Cashless health insurance makes you worry-free regarding the payment of big hospitalisation bills, as the insurer handles the claims directly with the hospital. You can remain stress-free and use medical services in any of your preferred hospitals.

Not only this, but cashless health insurance also helps reduce the stress associated with borrowing money from friends and relatives during a health issue. So why not go cashless everywhere without worrying about the cost and quality of your medical treatment, right?

FAQs on Cashless Health Insurance

Q. Which health insurance is best for cashless treatment?

You can buy cashless health insurance from one of India’s biggest insurers, HDFC Life.

Q. Do Cashless health insurance plans cover OPD treatment?

Yes, many cashless health insurance policies do cover OPD treatment. However, it is wise to check with different insurers before buying any policy.

Q. My cashless claim got rejected. What could be the possible reasons for the same?

Your cashless claim can get rejected due to many reasons, such as insufficient documentation, incomplete information, waiting period violation, policy lapse, etc.

Q. What is the difference between cashless & reimbursement health insurance?

In the case of a cashless claim, the insurer directly pays the bill to the hospital. You, as a policyholder, either need to pay nothing or a very small portion. On the other hand, in the case of reimbursement health insurance, you, as a policyholder, have to pay the full amount to the hospital and then later get reimbursement from your insurance company.

Q. What are the types of cashless health insurance policies in India?

Different types of cashless health insurance plans are available in India, including Cashless Coverage with Individual Health Insurance, Family Cashless Health Insurance, Cashless Coverage for Critical Illness Insurance, Health Insurance for Senior citizens with Cashless Coverage, etc.

 

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Francis Rodrigues Francis Rodrigues

Francis Rodrigues has a decade long experience in the insurance sector, and as SVP, E-Commerce and Digital Marketing, HDFC Life, manages the online sales channel, as well as digital and performance marketing. He has had hands-on experience in setting up sales channels and functional teams from scratch over a career spanning 2 decades.

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Vishal Subharwal heads the Strategy, Marketing, E-Commerce, Digital Business & Sustainability initiatives at HDFC Life. He is responsible for crafting and ensuring successful implementation of the overall organisation strategy.

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