Cashless or Reimbursement Health Policy

Choose whichever suits your needs, short on funds – a cashless option, enough funds in savings – take advantage of the reimbursement plan.

Buy a policy which suits your needs.

In a cashless health insurance policy it is exactly that – cashless. The policy holder makes no payment and the insurance company settles the bill. In a reimbursement plan the policy holder pays the bills and the insurer pays him when he files a claim.

People With Health Insurance Often Use More Medical Care
A new study conducted by MIT economist Amy Finkelstein reveals that ‘moral hazard’ plays an important role in how people choose insurance plans.

With a cashless health policy the choice of hospitals is limited, as you have to be admitted to a hospital which comes under the insurer’s network. When you choose a hospital within the network the bill will be settled directly. When a policy holder chooses a hospital outside the network he will first clear bills and claim later.

A reimbursement policy will allow you the choice of hospital and after you pay upfront the claims will be reimbursed.

A cashless policy is a real boon when a person is low on cash reserves, you can manage without emergency cash, as when you use a network hospital, the insurance company makes all the payments.

Watch Your Weight for Health Insurance
The biometric tests for health insurance will give people an added incentive to take care of their health, which is a win-win situation.

With a reimbursement plan you will need to pay first even if your funds are limited, and later file a claim and wait for the reimbursement.

In a cashless plan the policy holder will make use of the best hospital, with expensive rooms, since he need not pay. But the insurer can charge higher premiums from the policy holder. This is not the case with reimbursement plans as he will choose affordable care, since he will be making all payments, before he can claim from the insurer.

Health Insurance
This slideshow explains the concepts about healthcare insurance industry in India.

With a reimbursement plan, the policy holder has to retain all the bills, test reports and doctors bills. The claim will have to be first made and will be settled after a month. With a cashless card the insured can receive immediate treatment with it. The third party administrator (TPA) mediates to ensure a smooth claim settlement. Emergency cases are cleared within 6 hours and others within 4 days. The TPA can be informed earlier for pre-planned medical procedures.

References:

Cashless Hospitalization - A Boon To The Insured
Cashless hospitalization is a facility provided by the insurers wherein the insured can get admitted and undergo the required treatment without paying directly for the medical expenditure.

Hannah Punitha (IRDA Licence Number: 2710062)

Deepak Yohannan, March 2013

Source-Medindia