What are the forms of Health Insurance available?

May 02, 2018 | 2 years ago | Read Time: 3 minutes | By

Health insurance is a necessity today. Think of the rate of medical inflation and exorbitant medical costs. If you have not yet bought health cover, you should do so soon. But before you buy health insurance, you need to address some questions. The biggest one is about what form of health insurance you should buy. There are two forms of health insurance—cashless and reimbursement. The answer seems simple enough. Most people assume that cashless is the way to go. But hold on. Before you decide, learn more about these two forms of health insurance. Know their pros and cons.

What is cashless health insurance?

As the name implies, you do not have to bear the expenses of hospitalisation. The insurance company foots the bill. 

What is reimbursement health insurance?

With reimbursement health plans, you pay the hospital upfront. You file your claim with the insurance company later. You get the money when the insurer processes your claim.

How does a cashless health plan work?

Your insurer will have a list of network hospitals around the country. You show your health card upon admission into a network hospital. You do not have to pay anything.

How does a reimbursement plan work?

The admission process is normal. You pay for everything from your pocket. You collect your final bill and the discharge certificate. Then, you send in your claim to your insurer along with the supporting documents.

Cashless versus Reimbursement plans

Let’s compare the two forms of health insurance

  • Need for cash in an emergency: Cashless plans are a great option for people who are low on cash. You do not need to worry about arranging emergency funds. With reimbursement plans, you have to pay the hospital bills up front. You claim for a reimbursement from the insurance company later.
  • Choice of hospital: There is one limitation of cashless plans. You have to be admitted to a network hospital. If not, you will not enjoy the cashless benefit. You end up paying up front and claiming the amount later. Reimbursement plans have no such limitations.
  • Risk of higher premiums: With cashless plans, policyholders often choose more expensive hospitals. That is a result of not having to pay out of their pocket. Hence, the premium is higher. Reimbursement policies have lower premiums. That is because policyholders tend to choose good but affordable hopsitals. You can avoid this problem, though. Use health insurance premium calculators to see the maximum premium you can afford.
  • Claim settlement procedure: For reimbursement plans, you must keep all paperwork at hand. This includes all receipts, prescriptions, and test reports. You have to file your claim within 30 days of discharge. There may be a waiting period between the time of claim and the time of reimbursement. With cashless plans, the policyholder gives advance notice to the insurer. They inform the latter about the need for admission to the network hospital. For planned hospitalisation, you need to give four days’ advance notice. The insurer gives you and the hospital the details of eligibility and policy cover.
  • Risk of fraud by the hospital: If the hospital commits fraud, a cashless policy protects you. The insurance company can take legal action against the hospital. You do not have to deal with the hassle of fighting a legal battle. Under reimbursement plans, the policyholder has to tackle all legal issues themselves.
  • Discharge process: For cashless plans, the insurer directly pays the hospital. The bills and relevant documents are validated before discharge. This process could make the discharge process long. For reimbursement plans, the policyholder pays the hospital. This may not take as much time as the cashless hospitalisation process.

Conclusion

When it comes to health insurance, it pays to know all your options. You don’t want to be saddled with a policy that doesn’t suit your needs. Educate yourself at every step before going for the seemingly simplest option. To know more about health insurance and check out Aegon Life health insurance plans.

Advt. no.: IA/Apr 2018/3899


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